Clark Hill 2022 Automotive & Manufacturing Industry Outlook: Intellectual Property

U.S. Supreme Court will re-review Patent-Eligible subject matter   

In American Axle & Manufacturing, Inc. v. Neapco Holdings, LLC, Dkt. No. 20-891, the U.S. Supreme Court is considering granting (and is widely expected to grant) certiorari to decide the issue “What is the appropriate standard for determining whether a patent claim is ‘directed to’ a patent-ineligible concept under step 1 of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. § 101?”. More plainly stated, the Court will revisit the issue of what constitutes patent-eligible subject matter. American Axle invented and claimed in a U.S. patent a new and useful industrial process for manufacturing an improved driveshaft for an automobile. American Axle, according to its briefs, discovered a new and useful process to manufacture an improved driveshaft that vibrates less and is not noisy. American Axle’s patented process involves the positioning and insertion of “tuned liners” into driveshafts. The District Court held that such invention was not “patent-eligible” because it was “directed to applications of Hooke’s law,” which, as a natural phenomena, is not patentable.  The Federal Circuit Court of Appeals ultimately (and mostly) agreed, in a divided panel opinion. 

In May 2021, the Supreme Court asked the U.S. Solicitor General to file a brief in the case on behalf of the U.S. Government.  That brief has not yet been filed. 

The ultimate issue the Supreme Court will likely address head-on, if it takes this case, is the first step of the 2-step process it has sanctioned since the Mayo and Alice cases of (1) deciding what the patent claim in question is “directed to” and then (2) assessing whether that “directed-to subject matter” is “patent eligible.”  Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 132 S. Ct. 1289 (2012), and Alice Corp. Pty. Ltd. v. CLS Bank International, 573 U.S. 208, 134 S. Ct. 2347 (2014). 

The outcome of this case, should the Supreme Court weigh in, will have a profound impact on innovation in the U.S.  The outcome of this case could affect how America is incentivized by our patent system to invent and to innovate. 

Stay “tuned.” 

Standards for Standard-Essential Patents  

Anyone dealing with Standard-Essential Patents (“SEPs”) in the last 10 years or so has experienced the tug-of-war that is the “licensing negotiation” that is supposed to occur between SEP owners and implementers. An SEP is any patent that must be utilized to practice an industry standard. The grass-roots issue is mainly about whether an SEP owner can obtain, or at least meaningfully threaten, an injunction for infringement of its SEP.  The DOJ has recently issued a new Draft Policy on the subject and has asked for comments on the new draft policy.  See Public Comments Welcome on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments https://www.justice.gov/opa/pr/public-comments-welcome-draft-policy-statement-licensing-negotiations-and-remedies-standards.  This follows prior policy statements, since 2013, that have taken different paths, depending largely on the administration in charge at the time.  In 2013 (under the Obama administration), the DOJ issued a policy that stated that an injunction “may be inconsistent with the public interest” for SEPs.  See 2013 DOJ FRAND Policy Statement.  Then, in 2019 (under the Trump administration), the DOJ stated that the fact that a patent may be an SEP “should not bar any particular remedy.”  See 2019 DOJ FRAND Policy Statement.  

Courts can be as perplexed as SEP participants regarding how to react to this.  Clark Hill can help to alleviate that anxiety. 

Copyright Small Claims Court  

The Copyright Office recently unveiled its new “small claims” copyright court. They call it the “Copyright Claims Board,” or CCB.  It should be up and running, and receiving claims complaints, this Spring 2022.  https://copyright.gov/about/small-claims/  Basically, it is a three-member tribunal within the U.S. Copyright Office that is intended to “provide an efficient and user-friendly option to resolve certain copyright disputes that involve less than $30,000 (called “small claims”).” Discovery is intended to be very limited, and no “formal motions” are allowed unless leave is given. If a claim is filed with the CCB, it cannot also be brought later in Federal Court.  Review of the decision to the Copyright Office and/or Court is available, but “the types of issues the Office or a federal court could consider when you challenge a CCB decision will be more limited than if you bring or defend against a case in federal court.”   

IP counsel at Clark Hill continue to monitor the status of this new tribunal. 

Trademark Expungement of Goods and Services  

The United States Trademark Office has recently unveiled its new “Trademark Review” procedures, which can be utilized to remove – or “expunge” — from the Trademark Register any goods and services for any trademark, if a requester shows that those goods and services are not actually being used in commerce with the registered mark.  Expungement of goods and/or services corresponding to a registered trademark can significantly narrow the scope of the trademark. 

Any request for expungement is filed ex parte.  According to the Trademark Office:   

Expungement proceeding 

Any party may request cancellation of some or all of the goods or services in a registration because the registrant never used the trademark in commerce with those goods or services.  

Time limit. This proceeding must be requested between three and ten years after the registration date. Until December 27, 2023, however, a proceeding may be requested for any registration at least three years old, regardless of the ten-year limit. 

Reexamination proceeding 

Any party may request cancellation of some or all of the goods or services in a use-based registration on the basis that the trademark was not in use in commerce with those goods or services on or before a particular relevant date. 

• When the underlying application was initially filed based on use of the trademark in commerce, the relevant date will be the filing date of the application. 
• When the underlying application was filed with an intent-to-use basis, the relevant date is the later of the date that an amendment to allege use was filed or the date that the deadline to file a statement of use expired. 

Time limit. This new procedure must be requested within the first five years after registration. 

Any goods or services that are cancelled as a result of these proceedings will no longer be covered by the trademark registration. 

https://www.uspto.gov/trademarks/apply/expungement-or-reexamination-forms.  

Any request must include:  

• A verified statement that establishes a reasonable investigation was conducted regarding whether the trademark had been used in commerce with specified goods or services and includes a concise factual statement explaining the basis for the petition 
• Evidence supporting a prima facie case of nonuse in commerce (“a reasonable predicate”) 
• The $400 fee per class of goods or services 

The experienced IP attorneys at Clark Hill can help navigate these new procedures.