In the United States Court of Federal Claims

No. 11-130 C

(Filed July 18, 2014)

RETURN MAIL, INC., 

 Plaintiff,

v.

THE UNITED STATES,

 Defendant.

)

)

)

)

)

)

ORDER

On February 28, 2011, plaintiff filed its Complaint in this suit seeking

reasonable and entire compensation under 28 U.S.C. § 1498(a) for the alleged

unauthorized use and manufacture by or for the United States Postal Service (USPS)

of certain methods and systems for providing address change services which are

asserted to infringe claims 39 through 44 of plaintiff’s U. S. Patent Number 6,826,548

(the ’548 Patent).

Proceedings in this litigation have progressed through a claim construction

opinion issued October 4, 2013, and a schedule for further proceedings leading to a

trial commencing on June 8, 2015. Docs. 54, 58.

On April 15, 2014, the USPS filed a petition with the Patent Trial and Appeal

Board (PTAB) for post-grant review of the ’548 Patent under Section 18 of the

America Invents Act (AIA), Pub. L. No. 112-29, 125 Stat. 284, 329-31 (2011). Doc.

60, Ex. A.1/

1/

 The initial paragraph of the USPS Petition reads as follows:

Under 35 U.S.C. § 321, § 18 of the Leahy-Smith America Invents Act (AIA),

and 37 C.F.R. § 4.300, the United States Postal Service (Petitioner or USPS) requests

covered business method patent post-grant review of claims 39-44 of U.S. Patent No.

6,826,548 (the ’548 patent, attached as Exhibit 1001), issued to Ralph Mitchell

Hungerpiller and Ronald C. Cagle on November 30, 2004, as amended by Ex parte

Reexamination Certificate No. 7964 (attached as Exhibit 1002) on January 4, 2011,

(continued...)
The patent owner hasthe right to file a preliminary response to the petition and

the PTAB must “determine whether to institute a trial” within a maximum of six

months of the filing of the petition. Office Patent Trial Practice Guide, 77 Fed. Reg.

48,756-57 (Aug. 14, 2012), 35 U.S.C. § 323.

AIA § 18(b)(1)-(2) provides:

(b) Request for stay.—

(1) In general.—If a party seeks a stay of a civil action alleging

infringement of a patent under section 281 of title 35, United States

Code, relating to a transitional proceeding for that patent, the courtshall

decide whether to enter a stay based on—

(A) whether a stay, or the denial thereof, will simplify the issues

in question and streamline the trial;

(B) whether discovery is complete and whether a trial date has

been set;

(C) whether a stay, or the denial thereof, would unduly prejudice

the nonmoving party or present a clear tactical advantage for the moving

party; and

(D) whether a stay, or the denial thereof, will reduce the burden

of litigation on the parties and on the court.

(2) Review.—A party may take an immediate interlocutory appeal

from a district court’s decision under paragraph (1). The United States

Court of Appeals for the Federal Circuit shall review the district court’s

decision to ensure consistent application of established precedent, and

such review may be de novo.

1/

 (...continued)

assigned on its face to Return Mail, Inc. (Patent Owner).

- 2 -
Also on April 15, 2014, the USPS, relying on the above-quoted AIA § 18(b)(1)

as a standard, filed a motion to stay proceedings in this litigation pending post-grant

review of the patent-in-suit before the PTAB. Doc. 60. Defendant, citing Landis v.

N. Am. Co., 299 U.S. 248, 254 (1936), bases its stay motion on “the inherent power

of this Court to control its docket” noting that AIA § 18(b)(1) is expressly addressed

to suits brought under 35 U.S.C. § 281, whereas the pending suit was brought under

28 U.S.C. § 1498. Doc. 60 at 4-5. Defendant asserts that, in exercising its inherent

power, AIA § 18(b)(1) in effect “provides the standard by which a party may seek a

stay of an action for patent infringement while a CBM [covered business method]

proceeding is pending.” Doc. 60 at 5.

In support of a stay, defendant addresses the four factors listed in AIA §

18(b)(1). Defendant argues that a stay will simplify the issues in question and

streamline the trial assuming that the PTAB grants its petition and subsequent

proceedings result in cancellation of some or all of the asserted Patent Claims 39-44. 

Defendant also relies on the estoppel impact of AIA § 18(a)(1)(D) to note that if the

PTAB proceeding results in a written decision that a claim is valid over USPS’s

asserted invalidity grounds, the invalidity ground could not then be asserted by USPS

in thislitigation. Defendant agreesto the application of this provision. Tr. at 19 (Jul.

2, 2014).

Defendant arguesthat discovery in thislitigation is not complete and trial is not

scheduled to commence for some eleven months.

As to prejudicial and tactical advantage, defendant argues that PTAB

proceedings are time-limited and a stay would not result in prejudice to plaintiff or

advantage to defendant.

With respect to reducing the burden of litigation on the parties and the court,

defendant argues that transferring activity to the PTAB will alleviate existing

demands on the court and if the PTAB were to grant the USPS’s petition and, in

ensuing proceedings, invalidate all of the asserted claims of the patent-in-suit the

litigation would terminate. If PTAB proceedings instead confirm the validity of

claims 39 through 44 of the patent-in-suit, then USPS agreesthat proceedings will not

include any issue of invalidity asserted by USPS during the CBM proceeding.

- 3 -
Plaintiff opposes defendant’s motion for a stay pending CBM review. Plaintiff

argues that “[g]iven the AIA’s focus on private litigation, there is no evidence that

CBM Review was ever intended to include government entities.” Doc. 62 at 4-5. 

The fact that defendant must rely on the court’s inherent power to control its docket

as the basis for granting a stay in this litigation is argued to support the position that

defendant lacks standing to seek a CBM review.2/

Plaintiff arguesthat a stay will not simplify the issuesin this litigation and that

the defendant’s arguments in its PTAB petition are largely duplicative of those

covered in the prior Ex Parte Reexamination proceedings. Plaintiff notes that

proceedings in this litigation have progressed to the point where discovery has

commenced, a claim construction order has been issued and a trial date set. Plaintiff

argues that, issuing a stay would disrupt the substantial progress and subject plaintiff

to additional delay. Plaintiff considers defendant’s motion for a stay to comprise a

tactical move to advantage defendant and prejudice plaintiff by delaying the

resolution of the litigation. Moreover, plaintiff asserts that it is unlikely that CBM

review, if instituted, would resolve all issues in this litigation so that the litigation

burden to the parties would not be significantly reduced.

Upon consideration of the comprehensive briefs filed by the parties and the

helpful oral argument on July 2, 2014, it is concluded that a ruling on the motion to

stay, pending CBM review by the PTAB, shall be deferred pending a decision by the

PTAB whether to grant the USPS’s pending petition. This conclusion is reached by

considering the relatively advanced status of proceedings in this litigation and the

ruling inVirtualAgility, Inc. v. Salesforce.com, Inc., ___ F.3d ___, 2014 WL 3360806

(Fed. Cir. 2014), recognizing that it is not error for a trial court to wait until the PTAB

makes its decision on instituting CBM review before ruling on a motion to stay

proceedings pending CBM review. See 2014 WL 3360806 at *9. 

2/

In reply, defendant notes that “CBM reviews simply require a related case in which the

petitioner has been sued for infringement of the subject patent. See AIA § 18(a)(1)(B); 37 C.F.R.

§ 42.302(a).” Doc. 63 at 6. To illustrate that the AIA related suit requirement does not exclude

infringement actions in the Court of Federal Claims pursuant to 28 U.S.C. § 1498, the institution of

an Inter Partes review trial based on a related Court of Federal Claims case is cited as follows: “See

BAE Sys. v. Cheetah Omni, LLC, IPR2013-00175, Paper 15 (P.T.A.B. July 3, 2013) (attached as Ex.

C [Doc. 63]) (related to Cheetah Omni, LLC v. United States, No. 11-255 C (Fed. Cl. filed April 22,

2011).”

- 4 -
Where, as here, an issue is raised as to standing to seek CBM review, a

decision by the PTAB on the USPS’s petition will be helpful and relevant with

respect to resolution of the pending stay motion. Of course, if USPS’s petition were

not granted, the stay issue becomes moot. If the petition were to be granted, the case

for a stay becomes stronger. Id.

In these circumstances it is ORDERED:

(1) Proceedings on Defendant’s Motion to Stay Proceedings Pending CBM

Review by the PTAB, Doc. 60, shall be suspended until the PTAB issues a decision

on whether to institute the requested review; and

(2) Within 20 days following PTAB’s decision, were it to initiate a CBM

review with respect to asserted claims 39 through 44 of the ’548 Patent, absent

agreement by the parties as to the disposition of the pending motion for a stay, the

parties shall file supplemental briefs, not to exceed 10 pages, relative to the impact,

if any, of the PTAB’s decision on the issue of a stay.

s/ James F. Merow 

James F. Merow

Senior Judge

- 5 -