IP Law Daily Board correctly invalidated undeliverable mail processing patent claims in CBM review filed by U.S. Postal Service
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Monday, August 28, 2017

Board correctly invalidated undeliverable mail processing patent claims in CBM review filed by U.S. Postal Service

By Linda O’Brien, J.D., LL.M.

The Patent Trial and Appeal Board correctly concluded that challenged claims in a patent directed to the processing of mail that was undeliverable due to an inaccurate or obsolete address was unpatentable as directed to ineligible subject matter, the U.S. Court of Appeals for the Federal Circuit has ruled. Circuit Judge Pauline Newman filed a dissenting opinion to express her view that the U.S. Postal Service lacked standing under the America Invents Act to file a petition for covered business method (CBM) review and that standing was a jurisdictional issue not subject to waiver (Return Mail, Inc. v. United States Postal Service, August 28, 2017, Prost, S.).

Return Mail, Inc. is the assignee of U.S. Patent No. 6,826,548 ("the ’548 patent") that is directed to the processing of mail that is undeliverable due to an inaccurate or obsolete address for the intended recipient. According to its specification, the processing of mail that was returned to sender was substantially a manual one and the claimed invention overcomes historical issues with prior art manual handling. It teaches encoding useful information, such as the name and address of the intended recipient, on mail items in the form of a two-dimensional barcode.

After unsuccessfully trying to license the ’548 patent to the U.S. Postal Service, Return Mail filed a patent infringement suit under 28 U.S.C. §1498(a), alleging that the Postal Service had engaged in the unlawful, unlicensed infringement of the claimed invention. In April 2014, the Postal Service filed a petition with the USPTO, seeking a covered business method (CBM) review of the certain claims of the ’548 patent and raising several grounds for unpatentability. The Board held that the Postal Service was not statutorily barred from filing the underlying petition for review. On the merits, the Board determined that all of the challenged claims were directed to ineligible subject matter. Return Mail timely appealed.

Standing. The court determined that the Postal Service had standing to petition for CBM review because it had been "sued for infringement" of the ’548 patent within the meaning of §18 of the Leahy-Smith America Invents Act (AIA), which governs CBM review. Return Mail’s argument that its suit against the government under §1498(a) was not a suit for infringement was rejected. The court noted that, applying the fundamental canons of statutory construction, being sued under §1498(a) is broad enough to encompass being sued for "infringement" as the term is used in §18. When the AIA was enacted in 2011, the law did not preclude §1498(a) suits from being suits for infringement. Furthermore, the text of §18 does not indicate an intent to restrict "infringement" to suits that fall under the Patent Act.

While there are differences between §1498(a) suits against the government and suits for infringement against private parties, those differences were insufficient to compel a conclusion that Congress intended to exclude a government-related party sued under §1498(a from being able to petition for CBM review, the court stated.

Patent-eligible subject matter. The Board did not err in holding that the challenged claims of the ’548 patent were directed to patent-ineligible subject matter. Section 101 of the Patent Act defines patent-eligible subject matter to include "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, the court explained. Return Mail asserts that the claims at issue receipt encoding a particular type of information "indicating whether the sender wants a corrected address to be provided to the addressee. Here, the Board determined that the claims were directed to the abstract idea of "relaying mailing address data." The claims recite receiving from a sender a plurality of mail items, identifying undeliverable mail, decoding and encoding data, creating output data, and determining if the senders want a corrected address. The steps are analogous to the steps of collecting data, recognizing certain data within the collected data set, and storing the recognized data which were found to be abstract in Content Extraction & Transmission LLC v. Wells Fargo Bank Nat’l Ass’n, 776 F. 3d 1343 (2014).

In addition, Return Mail’s contention that the claims were directed to a specific improvement in the area of returned mail was rejected. Limiting the abstract idea to a particular environment, such as a mail processing system with a generic computing technology, did not make the claims any less abstract, the court stated. Also rejected was Return Mail’s argument that the claims were patent-eligible for reciting an inventive concept that transforms the abstract idea into "something more." The court noting that that claims only recite routine, conventional activities, such as identifying undeliverable mail items, decoding data on those mail items, and creating output data. None of the recited steps, along or together, sufficed to transform the abstract idea into patent-eligible subject matter, the court concluded.

Dissent. In a dissent, Circuit Judge Pauline Newman stated that the threshold issue was whether the Postal Service was within the definition of a "person" under §18 and therefore entitled to proceed under the AIA. The majority determined that Return Mail waived the issue by not raising it in its brief. However, statutory jurisdiction was not subject to waiver. The general statutory definition of "person" does not include the United States unless expressly provided and it is reasonable to assume the Congress was aware that "person" as defined in the AIA did not include the United States, Judge Newman noted.

The case is No. 2016-1502.

Attorneys: Richard L. Rainey (Covington & Burling LLP) for Return Mail, Inc. David Allen Foley, Jr., U.S. Department of Justice, for the United States Postal Service.

Companies: Return Mail, Inc.

MainStory: TopStory Patent FedCirNews

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