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01 July 2019
On 10 June 2019 the Supreme Court in Return Mail Inc v United States Postal Service (17-1594) ruled six-to-three that a federal agency cannot petition for the review of an issued patent under the America Invents Act (AIA). This decision prevents the US government from challenging the validity of issued patents through inter partes, post-grant and covered business method reviews.
In 2011 Congress enacted the AIA, which permits a 'person' to challenge issued patents through three types of then-newly created administrative proceeding:
These reviews are conducted before the Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office.
Return Mail owns US Patent 6,826,548, which claims a method for processing undeliverable mail. Return Mail sued the US Postal Service for infringement of its '548 patent in the Court of Federal Claims. The Postal Service subsequently petitioned the PTAB for covered business method review of the '548 patent. In the covered business method proceeding, the PTAB determined that the subject matter claimed in the '548 patent was ineligible to be patented. On appeal, the Court of Appeals for the Federal Circuit affirmed, holding that the Postal Service (ie, the government) was a 'person' eligible to petition for covered business method reviews.
The Supreme Court granted certiorari on the question of whether a federal agency is a 'person' that can petition for inter partes, post-grant and covered business method reviews under the AIA.
Justice Sotomayor wrote the majority opinion, joined by Justices Roberts, Thomas, Alito, Gorsuch and Kavanaugh.
The majority began by noting that the AIA does not expressly define the term 'person', and that, in the absence of an express definition, the Supreme Court generally applies the longstanding presumption that 'person' does not include the government or an agency thereof. The majority rejected the Postal Service's argument that this presumption should apply only where a statute would subject the government to liability, explaining that although the presumption is "particularly applicable" in situations where Congress has subjected the government to liability to which it has not been subject before, "it is hardy confined to such cases".
The majority then reasoned that nothing in the AIA justified displacing the presumption that the government was not a person. The majority first observed that the Patent Act and AIA referred to 'person(s)' in at least 18 different places, and that while the use of the term in some instances "plainly includes the Government", "sometimes—as here—it might be read either way". The majority concluded that the "mere existence of some Government-inclusive references" in the statute could not overcome the presumption that Congress did not intend for the term 'person' in the AIA's post-issuance review provisions to include the government. In that regard, the majority rejected the Postal Service's reliance on 35 USC § 207(a)(1), which authorises each federal agency to obtain patents of its own. According to the majority, Section 207(a)(1) does not bear on the interpretation of the AIA's post-issuance review provisions because it "implies nothing about what a federal agency may or may not do following the issuance of someone else's patent".
The majority next discounted the Postal Service's observation that since 1981, the Patent Office has treated federal agencies as persons that may request ex parte re-examination of an issued patent. According to the majority, ex parte re-examination and AIA post-issuance review are fundamentally different proceedings, as ex parte re-examination is an internal Patent Office process, whereas AIA post-issuance reviews are:
adversarial, adjudicatory proceedings between the 'person' who petitioned for review and the patent owner… Thus, there are good reasons Congress might have authorized the Government to initiate a hands-off ex parte re-examination but not to become a party to a full-blown adversarial proceeding before the Patent Office.
Finally, the majority rejected the Postal Service's argument that, because the government is subject to civil liability for patent infringement like other potential infringers, it – like other potential infringers – should be afforded the benefit of challenging a patent de novo through AIA post-issuance reviews. The majority asserted that:
We see no oddity… in Congress affording non-governmental actors an expedient route that the Government does not also enjoy for heading off potential infringement suits.
The majority also observed that Congress had afforded the government certain benefits not shared by other infringers:
Most notably, [28 USC] § 1498 restricts a patent owner who sues the Government to her 'reasonable and entire compensation' for the Government's infringing use; she cannot seek an injunction, demand a jury trial, or ask for punitive damages, all of which are available in infringement suits against nongovernmental actors under [35 USC] § 271(e)(4).
Justice Breyer, joined by Justices Ginsburg and Kagan, dissented. According to the dissent, the use of the term 'person' in other provisions of the Patent Act clearly included the government, and these uses were sufficient to overcome the presumption that the government was not a 'person' for purposes of the AIA post-issuance review provisions. The dissent further questioned:
the majority's efforts to find an explanation for why Congress would have wanted to deny Government agencies the ability to invoke the speedier administrative procedures established by the [AIA]. (Emphasis in original.)
For further information on this topic please contact Christopher Loh at Venable LLP by telephone (+1 410 244 7400) or email (firstname.lastname@example.org). The Venable LLP website can be accessed at www.venable.com.
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