IP Law Daily Supreme Court takes case asking whether government can institute AIA patent reviews
Monday, October 29, 2018

Supreme Court takes case asking whether government can institute AIA patent reviews

By Thomas Long, J.D.

The U.S. Supreme Court has agreed to take a case raising the question of whether the federal government is a "person" that may institute patent review proceedings under the Leahy-Smith America Invents Act (AIA). Return Mail, Inc.—the assignee of U.S. Patent No. 6,826,548 ("the ’548 patent"), which is directed to the processing of mail that is undeliverable due to an inaccurate or obsolete address for the intended recipient—asked the Court to review a decision of the U.S. Court of Appeals for the Federal Circuit, affirming the Patent Trial and Appeal Board’s conclusion in a covered business method (CBM) patent review proceeding that challenged claims of the ’548 patent were invalid as directed to ineligible subject matter under Section 101 of the Patent Act.

According to the specification of the ’548 patent, the processing of mail that was returned to sender was substantially a manual one, and the claimed invention overcame historical issues with prior art manual handling. The patent taught 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 (USPS), Return Mail filed suit under 28 U.S.C. §1498(a), alleging that the USPS had engaged in the unlawful, unlicensed use of the claimed invention. In April 2014, the USPS filed a petition with the USPTO, seeking a CBM review of 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 appealed to the Federal Circuit. A panel majority determined that the USPS had standing to petition for CBM review because it had been "sued for infringement" of the ’548 patent within the meaning of Section 18 of the AIA, which governs CBM review. The court rejected Return Mail’s argument that its suit against the government under Section 1498(a) was not a suit for infringement, explaining that being sued under Section 1498(a) was broad enough to encompass being sued for "infringement" as the term was used in Section 18. When the AIA was enacted in 2011, the law did not preclude Section 1498(a) suits from being suits for infringement, the Federal Circuit said. Furthermore, the text of Section 18 did not indicate an intent to restrict "infringement" to suits that fell under the Patent Act. According to the Federal Circuit, although there were differences between Section 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 Section 1498(a) from being able to petition for CBM review.

Circuit Judge Pauline Newman dissented, opining that the threshold issue was whether the USPS was within the definition of a "person" under Section 18 and therefore entitled to proceed under the AIA. The majority had determined that Return Mail waived the issue by not raising it in its brief. However, statutory jurisdiction was not subject to waiver, Judge Newman said. In Judge Newman’s view, the general statutory definition of "person" did not include the United States unless expressly provided, and it was reasonable to assume that Congress was aware that "person" as defined in the AIA did not include the United States.

Return mail’s petition for certiorari presented two questions:

  1. Whether the government is a "person" who may petition to institute review proceedings under the AIA.
  2. Whether a § 1498(a) action for the eminent domain taking of a patent license by the government is a suit for patent "infringement" under the AIA.

The Supreme Court granted review only with respect to the first question, regarding the status of the government as a "person" under Section 18 of the AIA.

The petition in Return Mail, Inc. v. United States Postal Service, Dkt. No. 17-1594, was granted October 26, 2018.

Attorneys: Richard L. Rainey (Covington and Burling LLP) for Return Mail, Inc. Noel J. Francisco, U.S. Department of Justice, for United States Postal Service and the United States.

Companies: Return Mail, Inc.; United States Postal Service

MainStory: TopStory Patent

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