July 5, 2022

Section 101 Roundup: American Axle, USPTO Patent Eligibility Report and What's Next

Holland & Knight Section 101 Blog
Anthony J. Fuga
Section 101 Blog

We have a couple of big news items on the Section 101 landscape, so here we go.

Let's Talk About the Supreme Court

The big news is that the U.S. Supreme Court denied cert in American Axle v. Neapco. Eight months ago, even after the Court invited the views of the Solicitor General, I took the firm position that I had no idea what the Court would do with American Axle:

I wrote that American Axle could be the appropriate vehicle for the court to address, as American Axle put it, the Federal Circuit's "cries for help." But the Supreme Court is certainly not reaching to address Section 101. So will the court grant this petition? ¯\_(ツ)_/¯

The Solicitor General filed an amicus brief in May, and Neapco filed its supplemental brief in early June. After reviewing those briefs, I became more convinced that the Supreme Court would pass on American Axle. The Solicitor General delved into the specific claim language of the patent claim at issue, and it felt like American Axle might be a case-specific issue. Neapco reiterated the strong point that the U.S. Court of Appeals for the Federal Circuit explicitly addressed only the natural-law exception, remanded the abstract-idea question to the district court and, therefore, this case would not address all of the outstanding Section 101 concerns.

So where does that leave us at the Supreme Court? Probably without a case addressing patent eligibility, at least for the time being. With the American Axle denial and the Court recently denying the petitions in Ameranth v. Olo and Spireon, Inc. v. Procon Analytics, there are only two remaining patent eligibility petitions remaining: Worlds Inc. v. Activision Blizzard and Interactive Wearables v. Polar Electro Oy.

Both of the surviving petitions argue, in part, that the Court should hold each petition pending the Court's considerations of American Axle. Well, the Court considered American Axle, and I expect the Supreme Court to deny both pending petitions.

(Disclosure: Holland & Knight represents Polar Electro in the above-mentioned case pending before the Supreme Court. Our opposition brief, filed June 27, 2022, can be read here.

Now Let's Talk About the USPTO

About one year ago, the USPTO undertook a "study on the current state of patent eligibility jurisprudence in the United States, and how the current jurisprudence has impacted investment and innovation." This blog called it the airing of patent eligibility grievances.

Although some did air their grievances, others supported the current state of the law. The USPTO summarized the commenters' key points as follows:

  • There was general agreement that the law on patent eligibility should be clear, predictable and consistent.
  • Those in support of the current state of the law on eligibility argued many points, including that it allows businesses to avoid abusive and costly litigation involving overly broad patents, promotes greater innovation and knowledge sharing, and enhances access to scientific information and innovative medicines.
  • Representatives from emerging fields, such as artificial intelligence and quantum computing, noted that their investments have trended upward since the Supreme Court decisions.
  • Those critical of the current state of the law contended that the law makes patents less available and enforcement of those rights less predictable, inhibiting investment in new technologies and companies, particularly by startups and small- and medium-sized enterprises. Many commenters also pointed out that, in their view, the current state of the law undermines innovation by decreasing the availability of private risk capital, thus concentrating markets in the hands of a few large, well-resourced incumbents.
  • Some businesses, especially in the fields of diagnostics and precision medicine, indicated that they are no longer seeking patent protection and are instead turning to other forms of IP protection, such as trade secrets, at the cost of decreased disclosure of new technological information.

The USPTO is encouraging all stakeholders to submit additional feedback and suggestions to 101@uspto.gov and noted that it will be hosting several listening sessions with Director Kathi Vidal to discuss patent eligibility jurisprudence and its impacts. Information regarding the listening sessions can be found on the USPTO website, with upcoming events in San Jose and Detroit (Go Lions). The full USPTO report can be read here.

What's Next?

As discussed above, it is unlikely that the Supreme Court grants any of the surviving Section 101 petitions. That is not to say that the Court won't address patent eligibility again – but it likely won't be soon.

With the Supreme Court's sidestepping patent eligibility again, expect to see a renewed effort from Congress to address what many see as ambiguity in the Patent Act. It's been three years since Sens. Chris Coons (D-Del.) and Thom Tillis (R-N.C.), along with Reps. Doug Collins (R-Ga.), Hank Johnson (D-Ga.) and Steve Stivers (R-Ohio) released a bipartisan, bicameral draft bill that "would reform Section 101 of the Patent Act." The draft bill had mixed reviews :

Gene Quinn of IPWatchdog wrote that the draft bill is "good news" and would "largely fix the 101 problem" while the Electronic Frontier Foundation said that "a terrible patent bill is on the way."

This led to multiple congressional hearings to discuss the state of patent eligibility under Section 101, with a comment from Sen. Tillis that he hoped to revise the draft language and introduce a final bill after the 2019 July recess. Since then, we've seen significant patent reform bills introduced, but they have not addressed Section 101.

Now that Congress cannot point to American Axle and the Supreme Court, I suspect we'll see renewed interest from Congress.

Related Insights