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IP Alert: Supreme Court Blocks Government Use of AIA Review Proceedings

July 9, 2019

On June 10, the U.S. Supreme Court decided the case of Return Mail, Inc. v. United States Postal Service et al., holding that a federal agency is not a “person” who can challenge the validity of a patent under the statutory administrative proceedings established under the America Invents Act (AIA)—inter partes review (IPR), post-grant review (PGR), and covered business method (CBM) review.

The case came to the Supreme Court on writ of certiorari from the Federal Circuit, which held that federal agencies are able to seek review under these administrative proceedings. The Supreme Court reversed the Federal Circuit and remanded.

Return Mail owns U.S. Patent No. 6,826,548, which claims a method for processing mail that is undeliverable. In 2006, the Postal Service introduced an enhanced address-change service to process undeliverable mail. Return Mail’s representatives asserted that the new service infringed the ’548 patent. In response, the Postal Service petitioned for ex parte reexamination of the patent. The USPTO canceled the original claims but issued several new ones, confirming the validity of the ’548 patent.

Return Mail then sued the Postal Service in the Court of Federal Claims. The Postal Service again petitioned for review of the ’548 patent, this time seeking CBM review. The Patent Trial and Appeal Board agreed with the Postal Service that the subject matter of Return Mail’s patent claims was ineligible to be patented and canceled the claims. The Federal Circuit affirmed, and in doing so, concluded that the Postal Service is a “person” eligible to petition for review. Return Mail subsequently appealed to the Supreme Court.

The AIA provides that “a person” other than the patent owner may file with the USPTO a petition to institute a PGR or IPR. The AIA likewise provides that a CBM review can be sought by a “person” who has been sued for infringement. But, the patent statute does not define “person.”

The Supreme Court concluded that if Congress intended for the government to be able to institute CBM proceedings, it would have said so explicitly. In reaching its conclusion, the Court applied its “longstanding interpretive presumption that ‘person’ does not include the sovereign.”

The Postal Service offered three arguments in support of its position that Congress had intended to displace this presumption: (1) the statutory text and context offer sufficient evidence that the federal government is a “person” with the power to petition for AIA review proceedings, (2) federal agencies’ long history of participation in the patent system suggests that Congress intended for the government to participate in AIA review proceedings as well, and (3) the statute must permit it to petition for AIA review because § 1498 subjects the government to liability for infringement. The Court found none of these arguments persuasive.

On this basis, the Court held in a 6–3 decision that a federal agency is not a “person” who may petition for post-issuance review under the AIA.

In dissent, Justice Breyer, joined by Justices Ginsburg and Kagan, referenced the lower burden of proof required in these new administrative procedures. He also noted that the Patent Act states that federal agencies are authorized to apply for patents and that it refers to “persons” in several places when further defining rights and procedures of patent applicants. In addition, he discussed statutory provisions that help “persons” (including federal agencies) accused of infringing patents.

Justice Breyer further stated that, in his view, allowing federal agencies to petition for the new administrative procedures would serve the intentions of the AIA to improve the quality of patents and the efficiency of the patent system and to maintain “a robust patent system.” He concluded that Congress meant for the word “person” to include government agencies, giving them the power to invoke the AIA administrative procedures.

This ruling has far-reaching effects on the ability of government agencies to challenge patents. For more infomation on this case, please contact Fitch Even partner Thomas F. Lebens, author of this alert.

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