By Jody Coultas, J.D.
The Government is not a "person" capable of instituting AIA review proceedings, High Court rules.
A federal agency is not a "person" who may petition for post-issuance patent review under the Leahy-Smith America Invents Act (AIA), according to a Supreme Court decision overturning a judgment to the contrary issued by the U.S. Court of Appeals for the Federal Circuit in a patent dispute between Return Mail, Inc. and the U.S. Postal Service. Justice Sotomayor delivered the opinion for the Court in a 6-3 decision, while Justice Breyer, joined by Justices Ginsburg and Kagan, filed a dissenting opinion (Return Mail, Inc. v. United States Postal Service, June 10, 2019, Sotomayor, S.).
Return Mail is 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. After unsuccessfully trying to license the ’548 patent to the U.S. Postal Service (USPS), Return Mail filed suit 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 covered business method (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.
On appeal, the Federal Circuit 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. 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.
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 and (2) whether a Section 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 AIA states that only "a person" other than the patent owner may file a petition to institute a post-grant review or inter partes review of an issued patent. The statute likewise provides that a "person" eligible to seek CBM review may not do so "unless the person or the person’s real party in interest or privy has been sued for infringement." Because the AIA does not define the term "person," the Supreme Court applied a "longstanding interpretive presumption that ‘person’ does not include the sovereign." The presumption reflects common usage and is an express directive from Congress. While not an actual rule, the presumption may be disregarded only upon some affirmative showing of statutory intent to the contrary. The Court has, in several instances, applied the presumption against treating the Government as a statutory person even when doing so would exclude the Government or one of its agencies from accessing a benefit or favorable procedural device.
The USPS was not able to show that the AIA’s use of the term "person" included the Government, according to the court. USPS argued that the statutory text and context offer sufficient evidence that the Government is a "person" with the power to petition for AIA review proceedings. While the AIA and the Patent Act use the term "person[s]" at least 18 different places, there is no clear trend as to whether the Government is included in the definition. Some places "person" plainly includes the Government, sometimes it plainly excludes the Government, and sometimes it could be read either way. The USPS points to a section that states that government agencies can obtain patents, as well as the "intervening rights" provisions that offer certain protections for "any person" who is lawfully making or using an invention when the Patent Office modifies an existing patent claim in a way that deems the person’s (previously lawful) use to be infringement. However, the Court declined to draw a connection between those uses of "person" to the use of the term in Section 1498(a), noting that the mere existence of some Government-inclusive references cannot make the "affirmative showing" that the presumption that the Government is not a "person."
USPS pointed to the long history of participation by federal agencies in the patent system, arguing that Congress intended for the Government to participate in AIA review proceedings as well. Since 1981, the Patent Office has treated federal agencies as "persons" who may cite prior art to the agency or request an ex parte reexamination of an issued patent. The Patent Office’s Manual of Patent Examining Procedure (MPEP) stated that §301’s reference to "any person" included "governmental entit[ies]." The Court concluded, however, that the MPEP has no direct relevance. There was nothing to suggest that Congress had the MPEP statement in mind when it enacted the AIA. "Even assuming that the Government may petition for ex parte reexamination, ex parte reexamination is a fundamentally different process than an AIA post-issuance review proceeding."
Finally, the Court rejected USPS’s argument that the statute must permit it to petition for AIA review because Section 1498 subjects the Government to liability for infringement. Federal agencies can argue that a patent is invalid, and face the same burden of proof as a defendant in any other infringement suit. However, USPS cannot petition for the initiation of an administrative proceeding before the Patent Office under the AIA, a process separate from defending an infringement suit. "[Excluding federal agencies from the AIA review proceedings avoids the awkward situation that might result from forcing a civilian patent owner (such as Return Mail) to defend the patentability of her invention in an adversarial, adjudicatory proceeding initiated by one federal agency (such as the Postal Service) and overseen by a different federal agency (the Patent Office)," the Court said.
Dissent. Justice Breyer, joined by Justices Ginsburg and Kagan, dissented, arguing that the purpose, subject matter, context, legislative history, and executive interpretation indicated an intent by Congress to include the Government in the definition of the term "person" in Section 1498(a).
The case is No. 17–1594.
Attorneys: Richard L. Rainey (Covington and Burling LLP) for Return Mail, Inc. Noel J. Francisco, solicitor General, U.S. Department of Justice, for United States Postal Service.
Companies: Return Mail, Inc.; United States Postal Service
MainStory: TopStory Patent
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