Court Opinion

ID: 4580084
Source: CourtListenerOpinion
Date Created: 2020-10-23 15:00:32.946426+00
Date Added: 2024-06-11T13:41:00.550809
License: Public Domain

Case: 18-1763   Document: 139     Page: 1   Filed: 10/23/2020

    United States Court of Appeals
        for the Federal Circuit
                  ______________________

    AMERICAN AXLE & MANUFACTURING, INC.,
               Plaintiff-Appellant

                             v.

  NEAPCO HOLDINGS LLC, NEAPCO DRIVELINES
                     LLC,
             Defendants-Appellees
            ______________________

                        2018-1763
                  ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:15-cv-01168-LPS, Chief Judge
 Leonard P. Stark.
                   ______________________

                      ON MOTION
                  ______________________

     JAMES RICHARD NUTTALL, Steptoe & Johnson LLP,
 Chicago, IL, for plaintiff-appellant. Also represented by
 JOHN LLOYD ABRAMIC, KATHERINE H. JOHNSON, ROBERT
 KAPPERS; CHRISTOPHER ALAN SUAREZ, Washington, DC.

     J. MICHAEL HUGET, Honigman LLP, Ann Arbor, MI, for
 defendants-appellees. Also represented by SARAH E.
 WAIDELICH; DENNIS J. ABDELNOUR, Chicago, IL.
                 ______________________

     Before DYK, MOORE, and TARANTO, Circuit Judges.
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 2     AMERICAN AXLE & MANUFACTURING v. NEAPCO HOLDINGS
                                                    LLC

       Order for the court filed by Circuit Judge DYK.
     Concurring opinion filed by Circuit Judge MOORE.
 DYK, Circuit Judge.
                          ORDER
     Plaintiff-appellant American Axle & Manufacturing,
 Inc. (“AAM”) filed a motion to stay issuance of the mandate
 pending the filing of a petition for writ of certiorari in the
 Supreme Court. Defendants-appellees opposed the motion.
                               I
     Federal Rule of Appellate Procedure 41 provides that a
 motion for stay of the mandate “must show that the peti-
 tion would present a substantial question and that there is
 good cause for a stay.” Fed. R. App. P. 41(d)(1). The Advi-
 sory Committee Notes state that “[t]he Supreme Court has
 established conditions that must be met before it will stay
 a mandate.” Fed. R. App. P. 41, advisory committee’s note
 to 1994 amendment (citing Robert L. Stern et al., Supreme
 Court Practice § 17.19 (6th ed. 1986)). In this respect, the
 Advisory Committee Notes refer to the standard estab-
 lished by the in-chambers opinions of the individual jus-
 tices. See Stern et al., supra, § 17.19. The Supreme Court
 itself has approved this standard in Hollingsworth v. Perry,
 558 U.S. 183, 190 (2010).
     This standard requires that the applicant show “(1) a
 reasonable probability that four Justices will consider the
 issue sufficiently meritorious to grant certiorari; (2) a fair
 prospect that a majority of the Court will vote to reverse
 the judgment below; and (3) a likelihood that irreparable
 harm will result from the denial of a stay. In close cases
 the Circuit Justice or the Court will balance the equities
 and weigh the relative harms to the applicant and to the
 respondent.” Id.
     Chief Justice Roberts, acting as the Circuit Justice for
 this court, specifically applied that standard in a patent
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 case, denying a stay solely for lack of irreparable injury.
 Teva Pharms. USA, Inc. v. Sandoz, Inc., 572 U.S. 1301,
 1301–02 (2014) (Roberts, C.J., in chambers). After we held
 certain of Teva’s patent claims invalid, Teva sought a stay
 in order to prevent market entry by the generic pharma-
 ceutical company respondents. The Chief Justice noted
 that the first two requirements for a stay were met, be-
 cause the Supreme Court had already granted certiorari
 and Teva had “shown a fair prospect of success on the mer-
 its.” Id. at 1301. But he denied a stay because a likelihood
 of irreparable injury was not shown, explaining that
 “[r]espondents acknowledge[d] that, should Teva prevail
 . . . and its patent be held valid, Teva [would] be able to
 recover damages from respondents for past patent infringe-
 ment” and therefore “the extraordinary relief that Teva
 [sought was] unwarranted.” Id. at 1301–02.
     As a matter of Federal Circuit law, we interpret the
 Rule as requiring application of the standard articulated
 by the Supreme Court in Hollingsworth and the Justices’
 in-chambers opinions. See Biodex Corp. v. Loredan Bio-
 medical, Inc., 946 F.2d 850, 858 (Fed. Cir. 1991) (Federal
 Circuit law, not regional circuit law, governs such matters).
                              II
     In this case, AAM has not made the required showing
 of a likelihood of irreparable injury absent a stay. With
 respect to claim 22 and related claims, the decision of this
 court requires no further action by the district court since
 the claims have been held to be unpatentable. AAM argues
 that “[i]f the Supreme Court grants review and decides that
 the asserted claims of [AAM’s patent] are patent eligible
 under § 101, this Court will have to recall its mandate to
 conform its disposition with such a decision.” Mot. 14, ECF
 No. 136. This action, common to every case in which the
 Supreme Court does not affirm, is not irreparable harm.
     With respect to claim 1 and related claims, the decision
 of this court remands to the district court for further
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 proceedings. AAM argues that there is “good cause for a
 stay” because it “intends to petition for certiorari with re-
 gard to the entirety” of our judgment and argues that “[s]ig-
 nificant burdens and expenses would accrue” should the
 mandate issue because “the parties and district court
 would continue to litigate issues related to claim 1.” Id. at
 12–13. Continued litigation with respect to claim 1 cannot
 be irreparable injury. “Mere litigation expense, even sub-
 stantial and unrecoupable cost, does not constitute irrepa-
 rable injury.” Renegotiation Bd. v. Bannercraft Clothing
 Co., 415 U.S. 1, 24 (1974); see also Commonwealth Oil Re-
 fin. Co. v. Lummus Co., 82 S. Ct. 348, 349 (1961) (Harlan,
 J., in chambers) (denying motion for stay of the mandate
 where the only possible harm from denial of the stay was
 that it could “set in motion the machinery for arbitration
 and . . . other matters affecting the possible future conduct
 of the arbitration”); Nara v. Frank, 494 F.3d 1132, 1133 (3d
 Cir. 2007) (need to “prepar[e] to commence trial within 120
 days while simultaneously filing a petition for certiorari”
 was not irreparable injury under Rule 41); United States v.
 Microsoft Corp., No. 00-5212, 2001 WL 931170, at *1 (D.C.
 Cir. Aug. 17, 2001) (denying motion to stay mandate under
 Rule 41 because movant “failed to demonstrate any sub-
 stantial harm that would result from the reactivation of
 proceedings in the district court during the limited pen-
 dency of the certiorari petition.”).
      AAM has cited no authority suggesting that the pro-
 spect of further district court proceedings while the case is
 on review could constitute irreparable injury. AAM points
 to the Practice Note to this court’s Rule 41, which reminds
 litigants that their right to seek certiorari is unaffected by
 the issuance of the mandate and, “[c]onsequently, a motion
 to stay the mandate should advance reasons for the stay
 beyond the mere intention to apply for certiorari, e.g., to
 forestall action in the trial court or agency that would ne-
 cessitate a remedial order of the Supreme Court if the writ
 of certiorari were granted.” Fed. Cir. R. 41 practice note.
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 But that Practice Note would not displace the governing
 stay standard if they conflicted. Even by its own terms,
 moreover, the Practice Note’s language does not support a
 conclusion that the trial court proceedings that might occur
 regarding claim 1 and related claims would support a stay.
 Under the standard applied by the Supreme Court, this is
 not a situation in which the Court would issue a “remedial
 order” staying our mandate if certiorari were granted since
 the only claimed irreparable injury is litigation cost.
     We conclude that the irreparable injury requirement is
 not satisfied here. On this ground alone a stay is not war-
 ranted, quite apart from the merit or lack of merit of the
 petition for certiorari.
     Accordingly,
     IT IS ORDERED THAT:
     The motion to stay the mandate pending the filing of a
 petition for writ of certiorari in the Supreme Court is de-
 nied.
                                 FOR THE COURT

   October 23, 2020               /s/ Peter R. Marksteiner
         Date                     Peter R. Marksteiner
                                   Clerk of Court
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    United States Court of Appeals
        for the Federal Circuit
                   ______________________

    AMERICAN AXLE & MANUFACTURING, INC.,
               Plaintiff-Appellant

                              v.

  NEAPCO HOLDINGS LLC, NEAPCO DRIVELINES
                    LLC,
             Defendants-Appellees
            ______________________

                         2018-1763
                   ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:15-cv-01168-LPS, Chief Judge
 Leonard P. Stark.
                   ______________________

 MOORE, Circuit Judge, concurring.
     Today, we adopt the three-prong test for staying a
 mandate adopted by our sister circuits and several
 individual Justices. I write separately to elaborate on how
 those prongs apply here. While American Axle has
 established a reasonable probability that certiorari will be
 granted and a fair prospect that the majority of the Court
 will reverse, it fails to establish irreparable harm and thus
 a stay is not warranted.
                               I
     The Supreme Court often grants certiorari to resolve
 circuit splits that render the state of the law inconsistent
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 and chaotic. See, e.g., Braxton v. United States, 500 U.S.
 344, 347 (1991) (“A principal purpose for which we use our
 certiorari jurisdiction . . . is to resolve conflicts among the
 United States courts of appeals and state courts concerning
 the meaning of provisions of federal law.”); see also Rogers
 v. Grewal, 140 S. Ct. 1865, 1875 (2020) (Thomas, J.,
 dissenting from the denial of certiorari) (“This case gives
 us an opportunity to provide lower courts with much-
 needed guidance, ensure adherence to our precedents, and
 resolve a Circuit split.          Each of these reasons is
 independently sufficient to grant certiorari.”). What we
 have here is worse than a circuit split—it is a court bitterly
 divided.
     As the nation’s lone patent court, we are at a loss as to
 how to uniformly apply § 101. All twelve active judges of
 this court urged the Supreme Court to grant certiorari in
 Athena to provide us with guidance regarding whether
 diagnostic claims are eligible for patent protection. There
 is very little about which all twelve of us are unanimous,
 especially when it comes to § 101. We were unanimous in
 our unprecedented plea for guidance.           But, as we
 acknowledged in our decisions in Athena, that holding was
 at heart a reticent application of Mayo to similar claims.
      The current case is the progeny of neither Alice nor
 Mayo. It is our own dramatic expansion of a judicial
 exception to § 101. Section 101 is clear: “[w]hoever invents
 or discovers any new and useful process,” like the claims
 here, “may obtain a patent.” Yet, we have struggled to
 consistently apply the judicially created exceptions to this
 broad statutory grant of eligibility, slowly creating a panel-
 dependent body of law and destroying the ability of
 American businesses to invest with predictability. See
 Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873
 F.3d 1364, 1377 (Fed. Cir. 2017) (Linn, J., dissenting-in-
 part and concurring-in-part) (characterizing § 101 doctrine
 as “indeterminate and often lead[ing] to arbitrary results”).
 Our confusion has driven commentators, amici, and every
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 judge on this court to request Supreme Court clarification.
 See Athena Diagnostics, Inc. v. Mayo Collaborative Servs.,
 LLC, 927 F.3d 1333 (Fed. Cir. 2019). If a circuit split
 warrants certiorari, such an irreconcilable split in the
 nation’s only patent court does likewise.
      This case is a model of our divide. To be sure, natural
 laws are “basic tools of scientific and technological work,”
 “free to all men and reserved exclusively to none.” Mayo
 Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66,
 70–71 (2012). Before this case, we applied this exception
 narrowly, because “all inventions at some level embody,
 use, reflect, rest upon, or apply laws of nature, natural
 phenomena, or abstract ideas,” so “too broad an
 interpretation of this exclusionary principle could
 eviscerate patent law.” Id. at 71. In a divided panel here,
 we struggled to marry these concepts into an administrable
 distinction between eligible and ineligible claims. The
 majority concluded as a matter of law that claims to a
 manufacturing process are not eligible for patent
 protection because they are directed to a law of nature even
 though no law of nature appears in the claims, the patent,
 or the prosecution history. Under the majority’s new
 “Nothing More” test, claims are ineligible when they
 merely make use of a natural law. We have strayed too far
 from the text of the statute. I dissented, proposing that we
 follow the narrow test announced in Alice and that we
 refrain from usurping the district court’s factfinding role.
 Equally divided in a 6-6 vote, the full court denied
 rehearing en banc and, in doing so, detailed its further
 divided views. Am. Axle & Mfg., Inc. v. Neapco Holdings
 LLC, 966 F.3d 1347, 1348 (Fed. Cir. 2020) (prompting two
 opinions concurring in the denial and three opinions
 dissenting from the denial). I believe American Axle has
 established that there is a reasonable probability certiorari
 will be granted.
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                               II
      The claims here are not directed to a business method,
 internet or financial method, the likes of which the Court
 dealt with in Alice or Bilski. Nor does this case map onto
 the Court’s holding in Mayo regarding the patent eligibility
 of diagnostic inventions, as did our decisions in Ariosa and
 Athena. Instead, our decision in American Axle is a patent
 killing judicial exception of our own creation. The claims
 here are directed to a process for manufacturing car
 parts—the type of process which has been eligible since the
 invention of the car itself. They do not preempt the use of
 a natural law, a building block of science, which should be
 freely available to all. To nonetheless hold these claims
 ineligible, the majority broadens the judicial exceptions in
 a way that threatens to swallow the whole of the statute.
 See Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 967
 F.3d 1285 (Fed. Cir. 2020), reh’g denied, 966 F.3d 1347,
 1365 (Stoll, J., dissenting) (“I grow more concerned with
 each passing decision that we are, piece by piece, allowing
 the judicial exception to patent eligibility to ‘swallow all of
 patent law.’”) (quoting Alice Corp. Pty. v. CLS Bank Int’l,
 573 U.S. 208, 217 (2014) and citing Mayo, 566 U.S. at 70–
 73). Such a rejection of the plain language of the patent
 statute in favor of a vast and amorphous judicial exception
 in which we Federal Circuit judges get to decide de novo
 not just the legal principles, but the application of the
 science itself, cannot stand. American Axle has established
 a fair probability that the Supreme Court will reverse.
     The Supreme Court has often corrected this court when
 we have defied precedent or strayed from our mandate by
 claiming de novo dominion over factual issues. See, e.g.,
 Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1931–
 34 (2016); Teva Pharm. USA, Inc. v. Sandoz, Inc., 574 U.S.
 318, 324–27 (2015); KSR Int’l Co. v. Teleflex Inc., 550 U.S.
 398, 407 (2007). We repeat this mistake again. We hold as
 a matter of law that the claimed result (a reduction in two
 types of vibration in a drive shaft) was achieved by nothing
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  more than a natural law that appeared nowhere in the
  claims, patent or prosecution history. We approach as a
  question of law whether the vibrations in the drive shaft
  were reduced by application of Hooke’s Law and nothing
  more. And in doing so, we reject the undisputed testimony
  of both experts. This is simply not our role as appellate
  judges. American Axle has established a fair prospect that
  the Supreme Court will reverse our usurpation of the
  district court’s fact-finding role and our decision to expand
  the natural law exception to cover an automotive
  manufacturing process in direct contravention of the plain
  statutory language.
                               III
      Our remand to the district court of claim 1 and its
  dependent claims will surely cause redundant, expensive
  process. We unanimously held that claim 1 and its
  dependent claims are not directed to a natural law. But as
  the majority explained: “On appeal, Neapco relied on both
  the natural law and abstract idea categories of ineligibility
  in defending the district court’s decision. But the abstract
  idea basis was not adequately presented and litigated in
  the district court.” Am. Axle, 967 F.3d at 1300–01. Still,
  the majority ordered the district court to consider the
  abstract idea arguments on remand. Whether a claim is
  directed to Hooke’s Law is a different question than
  whether a claim is directed to an abstract idea. I dissented
  from our remand which requires the district court to
  consider a defense which we concluded was not adequately
  presented and litigated. Whether to allow such a new
  defense ought to be within the sound discretion of the
  district court, but the majority’s remand dictates
  otherwise. The court and parties will now be forced to
  undertake significant, expensive and burdensome process
  addressing this new defense.
      Due process demands that American Axle be given the
  “opportunity to be heard at a meaningful time and in a
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  meaningful manner” regarding Neapco’s new arguments.
  Mathews v. Eldridge, 424 U.S. 319, 333 (1976) (internal
  quotation marks omitted). Therefore, discovery must be
  reopened, new expert reports permitted, and new summary
  judgment briefing allowed. And since the defendant gets
  to challenge these patent claims on an entirely different
  ground (abstract idea versus natural law), American Axle
  as the patentee is free to make whatever arguments it
  chooses in defense—such as arguments regarding the
  factual underpinnings of the second part of the Alice-Mayo
  test and the level of detailed structure present in the
  dependent claims. The majority’s forced do-over works
  both ways. And depending on the actions of the Supreme
  Court, there could be significant wasteful, duplicative or
  parallel process, including on American Axle’s dependent
  claims, which we refused to separately address. Or
  American Axle may choose to seek certiorari on the
  propriety of our remand as to claim 1, and the Supreme
  Court may determine that our remand instructions were
  improper.
      Although American Axle faces significant expense and
  potentially duplicative process, this is not irreparable
  harm. Thus, I join the majority’s adoption of the three-
  prong test and its decision that we cannot stay the mandate
  in this case under these circumstances. It bears noting,
  however, that although we have not stayed our mandate,
  the district court retains “the power to stay proceedings” as
  to claim 1 and the dependent claims, which “is incidental
  to the power inherent in every court to control the
  disposition of the causes on its docket with economy of time
  and effort for itself, for counsel, and for litigants.” Landis
  v. N. Am. Co., 299 U.S. 248, 254 (1936) (reviewing decision
  to stay for an abuse of discretion).