On June 10, 2019, the U.S. Supreme Court issued a decision in Return Mail, Inc. v. United States Postal Service (U.S. Supreme Court docket no. 17-1594). In its decision, the Court held that the government (and its agencies, in this case the U.S. Postal Service) is not a “person” that may file a petition for an AIA trial (inter partes review, post-grant review, covered-business-method review) before the PTAB of the U.S. Patent and Trademark Office. The Supreme Court decision reversed the Federal Circuit, which had held that the Postal Service was a “person” that could challenge the validity of a patent in an AIA trial.
Return Mail is the owner of U.S. Patent No. 6,826,548 (“the ‘548 patent”), which is directed to a method, system, and program for processing returned mail. Around January 2006, Return Mail and the United States Postal Service discussed licensing of the ‘548 patent and a proposed pilot program for the Postal Service to test the use of the invention covered by the ‘548 patent. Subsequently, however, the Postal Service implemented its own system for processing returned and undeliverable mail. Return Mail notified the Postal Service that this system was covered by the claims of the ‘548 patent. Instead of taking a license for the ‘548 patent, the Postal Service filed a petition for ex parte reexamination with the USPTO to challenge the validity of the ‘548 patent. The USPTO upheld the validity of the ‘548 patent in the reexamination, and thereafter Return Mail filed a Section 1498(a) action against the Postal Service in the United States Court of Federal Claims seeking compensation for the Postal Service’s use of Return Mail’s invention. During the pendency of the 1498(a) action (and after passage of the America Invents Act which implemented AIA trials before the PTAB), the Postal Service filed a petition for covered business method (CBM) review of certain method claims of the ‘548 patent. The PTAB ultimately issued a final written decision invalidating the challenged claims of the ‘548 patent. Return Mail appealed the PTAB’s decision to the United States Court of Appeals for the Federal Circuit (Federal Circuit Docket No. 2016-1502), in part contesting the PTAB’s determination that the Postal Service had statutory standing to file the petition for CBM review. The Federal Circuit issued a decision on August 28, 2017 affirming the Postal Service’s standing before the PTAB and also affirming the invalidity of the challenged claims of the ‘548 patent. Return Mail, Inc. v. United States Postal Service, 868 F.3d 1350 (Fed Cir. 2017). Return Mail then petitioned the Supreme Court for review.
The AIA established that a “person” other than the patent owner may petition for inter partes review or post-grant review of a patent, and a “person” may petition for covered-business-method review of a patent as a defense against a charge or suit for infringement. 35 U.S.C. Section 311, 321; AIA Section 18(a)(1). Since the Patent Act does not expressly define “person,” the Court applied a presumption of statutory interpretation that “person” does not include a sovereign, including federal agencies such as the Postal Service. The Court also noted that the Dictionary Act of Congress does not include the government in the definition of “person,” and the Court further reasoned that the presumption could only be rebutted by an affirmative showing in the text or context of the AIA that Congress intended to include the government as a “person.”
The majority found that the presumption against the government being a “person” was not overcome in the case of the provisions of the America Invents Act (AIA) governing patent review proceedings before the PTAB. While the Patent Act does at times include the government as a “person,” the usage is inconsistent and the Court found that no clear trend exists in the usage such that one could infer that the same meaning was intended throughout. Also, the fact that the government is able to participate in other aspects of the patent system (such as filing patent applications, petitioning for ex parte reexamination, etc.) was not found to be a clear indication that Congress intended for the government to participate in full-blown adversarial proceedings of AIA trials. Further, the Court rejected the Postal Service’s argument that it must be considered a “person” so that it could challenge a patent in an AIA trial as a defense against a claim of infringement. In this regard, the Court found that the government faces lower risks in patent litigation, so it would have been reasonable for Congress to exclude the government. Also, excluding the government from AIA trials avoids the “awkward situation” of the government being both a party and the judge in an adversarial proceeding against a patent owner.
A copy of the Return Mail decision may be accessed at https://www.supremecourt.gov/opinions/18pdf/17-1594_1an2.pdf.
U.S. Supreme Court Issues Decision in Return Mail v. U.S. Postal Service
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