## I n the U nited S tates Cour t of Feder al Claim s

No . 1 1 -1 3 0 C (Fi l ed J u l y

1 8 , 2 0 1 4 )

RETURN M AIL, INC.,

Pl ai n t iff,

v

.

THE UNITED STATES,

Defen d an t

. ) ) ) ) ) )

ORDER

On Feb ru ary 2 8

, 2 0 1 1

, p l ai n t i ff fi l ed i ts Co m pl a i n t i n t h i s s u it s eek i n g

reas on ab l e an d en t i re co m p en s at i o n u n d er 28 U.S.C. § 1 4 9 8 (a) fo r t h e al l eg ed

u n au th o ri zed u s e an d m an u fact u re b y o r fo r t h e Un i t ed St at es Po s t al Serv i ce (USPS)

o f cert ai n m et h o d s an d s y s t e m s fo r p ro v i d i n g ad d res s ch an g e s erv i ces wh i ch are

as s ert ed t o i n fri n g e cl ai m s 3 9 t hro u gh 44 of p l ai n ti ff’ s U. S. Pat en t N u m b er 6 ,8 2 6 ,5 4 8 (t he ’ 5 4 8 Pat en t ).

Pro ceed in g s i n t h i s li t ig at i o n h av e p ro g res sed t h ro u g h a cl ai m co ns t ru ct i o n

o p i n i o n i ss u ed Oct ob er 4

, 2 01 3

, an d a s ch ed u l e fo r fu rt h er p ro ceed i n g s l ead i n g t o a

t ri al co m m en ci n g o n J un e 8 , 2 01 5 . Do cs . 5 4, 5 8

.

On Ap ri l 1 5, 2 0 14

, t he USPS fi led a p et i t i o n wi th t he Pat en t Tri al an d Ap p eal

B o a r d ( P T A B) fo r p o s t -g ran t rev i ew o f t h e ’ 5 4 8 Pat en t u nd er Sect i o n 18 o f t h e Am eri ca In v en t s Act (AIA), Pu b

. L. No

. 11 2 -2 9

, 1 2 5 St at

. 2 8 4

, 32 9 -3 1 (2 0 11 ). Do c. 6 0 , Ex . A. 1 /

1 / The initial parag raph of the USPS Petition reads as follows:

Under 35 U.S.C. § 321, § 18 of the L eahy -Smith America I n vents Act (AI A),

and 37 C.F .R. § 4.300, the U nited States Postal Service (Petitioner or USPS) requests
covered business method patent post-g rant review of c laims 39-44 of U.S. Patent No. 6,826,548 (the ’548 patent, attached a s Ex hibit 1001), issued to Ralph Mitchell Hung erpiller and Ronald C. Cag le on November 30, 2 004, as amended by Ex parte

Reex amination Certificate No. 7964 (attached as Ex hibit 1002) on J a nuary 4

, 2011, (continued...)Th e pat en t o wn er has t h e ri g h t t o fi l e a p rel i m i n ary res po n se t o t he p et i t i o n an d

t h e PTAB m

u s t “ d et erm i n e wh et h er t o in s t i t u t e a t ri al ” wi t h i n a m ax im um o f s ix

m o nt h s o f t h e fi li n g o f t h e p et i t i o n

. Offi ce Pat en t Tri al Pract i ce Gu i d e, 7 7 Fed

. Reg

. 4 8 ,7 5 6 -5 7 (Au g

. 1 4 , 2 01 2 ), 3 5 U.S.C. § 3 23

.

AIA § 1 8(b )(1 )-(2 ) p ro v i d es :

(b) Reques t fo r s ta y .—

(1 ) I n g enera l

. — If a p art y s e e k s a s t a y of a ci v i l act i o n al leg i n g i n fri ng em en t o f a p a t e n t u n d er s ect i o n 2 81 o f t i t l e 3 5

, Un i t ed St at es Co d e, rel at i n g t o a t ran si t i o n al p ro ceed i n g fo r t h at p at en t

, t h e co u rt sh al l

d eci de wh et h er t o en t er a s t ay b as ed o n

—

(A) wh et h er a s t ay , o r t h e d en i al t h ereo f, w i l l si m p l i fy t he i s s u es i n q u es t i o n an d s t ream l i ne t h e t ri al ;

(B) wh et h er d i s co v ery i s co m p let e an d wh et her a tri al d a t e h a s b een s et ;

( C ) wh et her a s t ay , o r t h e den i al t h ereo f, wo u l d u n d ul y p reju di ce

t h e n o n m o v i n g part y o r p res en t a cl ear tact ical ad van t ag e fo r t h e m o v i n g

p art y ; an d

( D ) wh et h er a st ay , o r t h e d en i al t h ereo f, w i l l red u ce t h e b u rd e n

o f l i t i gat i o n o n t h e p art i es an d o n t h e co u rt

.

(2 ) Rev i ew .— A p art y m ay t ak e an im m e d i a t e i nt erl o cu t o ry ap peal

fro m a d i s t ri ct co u rt ’ s d eci s i o n u n d er p arag rap h (1 ). Th e Un i t ed St at es Co u rt o f Ap p eal s fo r th e Fed eral Ci rcu i t s hal l rev i ew t h e d i s t ri ct co u rt ’ s d eci si o n t o en s u re co n s i s t en t ap pl i cat io n o f es t ab l i s hed p reced en t, an d

s u ch rev i ew m ay

b e d e n o v o

.

1 / (...continued) assig ned on its face to Return Mail, I nc. (Patent Owner).

- 2 -Al s o o n Ap ri l 1 5

, 20 1 4

, t h e USPS, rel y i ng o n t h e ab ov e-q u o t ed AIA § 1 8 (b )(1 )

as a s t an d ard

, fi l ed a m o ti o n t o s t ay p ro ceed in g s in t hi s l i ti g at i o n p en d i n g p o s t -g ran t

rev i ew o f t h e p at en t -i n -s u i t b efo re t h e PTAB. Do c. 60

. D efen d an t

, ci t i n g La n d i s v. N. Am. Co

. , 2 9 9 U.S. 2 4 8 , 2 5 4 (1 9 3 6 ), b as es i t s s t ay m o ti o n o n “ t h e in h eren t p o wer

o f t h i s Co u rt t o co n t ro l i t s d ock et ” n o t i ng t h at AIA § 1 8 (b )(1 ) is ex pres s l y ad d res s ed

t o s u it s b ro u gh t u n d er 3 5 U.S.C. § 2 8 1

, wh ereas t h e p en d i n g s ui t was b ro u gh t u n d er 2 8 U.S.C. § 1 4 9 8

. D o c. 6 0 at 4-5

. Defen d an t as s ert s t h at

, i n ex erci s i n g i t s i n h eren t

p o wer, AIA § 1 8 (b )(1 ) i n effect “ p ro v i d es t h e s tan d ard b y wh i ch a p art y m ay s eek a

s t ay of an act i on fo r p at en t i n fri n g e m en t wh i l e a CBM [co v ered bu s in es s m et ho d ]

p ro ceed in g i s p en d in g .” Do c. 6 0 at 5

.

In s u p p o r t o f a s t ay , defen d an t ad d res ses t h e fo u r fact o rs l i st ed in AIA §

1 8 (b )(1 ). Defen d an t arg u es t h at a s t ay wi l l s i m pl i fy t he i s s u es i n qu es t i o n a n d

s t ream l i n e t h e tri al as s um i n g t h at t he PTAB g ran t s it s pet i t i o n an d s u b s eq u en t

p ro ceed in g s res u l t in can cel l at i o n o f s o m e o r al l o f t h e as s ert ed Pat en t Cl ai m s 3 9 -4 4.

Defen d an t al so rel i es on t h e es to p p el i m p act o f AIA § 1 8 (a)(1 )(D) t o n o t e th at i f t h e PTAB pro ceed i n g res u l t s i n a w r i t t en d eci s i o n t h at a cl ai m is v al id ov er USPS’ s

as s ert ed i n v al i d it y g ro un d s , t h e i n v al i di t y g ro un d co u l d n o t t h en b e as s ert ed b y USPS

i n th i s l it i g at i o n

. Defen d an t ag rees t o t h e ap p l i cat i o n o f t h is p ro v i s io n. Tr. at 1 9 (J u l

. 2 , 2 01 4 ).

Defen d an t arg u es t h at d i s co v ery i n t hi s l i t i g at i o n i s n o t co m p l et e an d t ri al i s n ot

s ch ed u l ed t o co m

m en ce fo r s o m e el ev en m o n t h s

.

As t o p reju d i ci al an d t act i cal ad v an t ag e, d efen d an t arg u es t h at PTAB

p ro ceed in g s are t i m e-l im i t ed an d a s t ay w o u l d no t res u l t i n p r e ju d i ce t o p l ai n t i ff o r ad v an t ag e t o d efen d an t.

W i t h res p ect t o red uci n g t h e b u rd en o f l i t i g at i o n o n t he p art i es an d t h e co u rt

, d efen d an t arg u es t h at t ran s ferri n g act i vi t y to t h e PTAB wi l l al lev i at e ex i s t i n g d em an d s o n t h e co urt an d i f th e PTAB w e r e t o g ran t th e USPS’ s p et it i o n an d

, in

en s u in g p ro ce e d i n g s , i n v al i d at e al l o f t h e as s ert ed cl ai m s o f t h e p at en t -i n -s u i t t h e l i ti g at i o n wo u l d t e r m i n at e. If PTAB p ro ceed i n g s i n s t ead co nfi rm th e v al i d i t y o f

cl ai m s 3 9 t h ro u g h 4 4 o f t h e p at en t -i n-s u i t

, t hen U SPS ag rees t h at p ro ceed i n g s wi l l n ot
i n cl u d e an y

i s su e o f i n v al id i t y

as sert ed b y

USPS d u ri n g t h e CBM p ro ceed i n g

.

- 3 -Pl ai n t i ff o p p o ses defen d an t ’ s m o ti o n fo r a s tay p en d i n g CBM rev iew. Pl ai n t i ff

ar g u e s t h at “ [g ] i v en t h e AIA’ s fo cu s o n pri v at e l i t i g at io n, t h ere i s n o ev i den ce t h at
CBM Rev iew was ev er i n t e n d ed t o i n cl u d e g o v ern m en t en t i t i es .” Do c. 6 2 at 4 -5

. Th e fact t h at d efen d an t m us t rel y o n t h e co u rt ’ s i n h eren t p o w er t o co n t ro l i t s d o ck et

as t h e b as i s fo r g ran t i n g a st ay i n t hi s l i t ig at i o n i s arg u ed t o s u p po rt t he po s it i o n t h at
d efen d an t l ack s s t an d i ng t o s eek a CBM rev i ew. 2 /

Pl ai n t i ff arg u es t h at a s t ay wi l l n o t s i m p l i fy t h e i ss u es i n th i s l i t i g at i on an d t h at

t h e d efen d an t ’ s arg u m en t s i n i t s PTA B p et i t i o n are l arg el y d u pl i cat i v e o f t h o s e

co v ered i n t h e pri or Ex Pa r t e Reex am i n at i o n p ro c e e d i n g s

. Pl ai n ti ff n o t es t h at

p ro ceed in g s i n t hi s li t i g at io n h av e p ro g res s ed to t h e p o in t wh ere d i s co v e r y h as

co m m en ced

, a cl ai m co n s t ru ct io n o rd er h as b een i s s u ed an d a t ri al d at e set

. Pl ai n t i ff

arg u es t h at

, i s s u i n g a s t ay w ou l d d is ru p t t h e s u bs t an t i al pro g res s an d s u b j ect p l ai n t i ff

t o ad d it i o n al d el ay

. Pl ai n ti ff c o n s i d ers d efen d an t ’ s m o t i o n fo r a s t ay t o co m p ri s e a

t act ical m ov e t o ad v an t ag e d efen d an t a n d p reju di ce p l ai n t i ff by d el ay i n g t h e

res o l ut i o n of t h e l i t ig at i o n

. M o reo v er, p l ai n ti ff as s ert s t h a t i t i s u nl i k el y t hat CBM

rev i ew, i f i n st it u t ed

, wo u l d re s o l v e al l i ss u es i n t hi s l i t i g at i o n s o t h at t he l i t i g at i o n b u rd en t o t h e p art ies wo u l d n o t b e s i g n i fi can t l y red u ced

.

Up o n co n si d er a t i o n o f th e co m p reh en s i v e b ri efs fi l ed b y t h e p art i es an d t h e h el p fu l o ral arg u m en t on J u l y 2

, 2 0 1 4

, i t i s co n cl u d ed t h at a ru l i n g o n t h e m o t i o n to

s t ay , p en d i ng CBM rev i ew b y th e PTAB, s h al l b e d eferred p en di n g a d eci s i o n b y t h e PTAB wh et h er t o g ran t th e USPS’ s p en di n g p et i ti o n

. Th i s co n cl u si o n i s reach ed by

co n si d eri n g t h e rel at iv el y ad v an ced s tat u s o f p ro ceed i n g s i n t h is li t i g at io n an d t h e

ru l i n g i n Vi r tu a l

Ag i l i t y, In c. v. S a l es f o r ce.co m, In c. ,

_

_ _ F.3 d

_ _ _ , 2 0 1 4 W L 3 3 6 0 8 0 6 (Fed

. Ci r. 2 0 1 4), reco g n izi n g t h at i t i s n ot erro r fo r a t ri al co urt t o wai t u n t i l th e PTAB

m ak es i ts d eci si o n o n i n s t i t u t i n g CB M r e v i e w b efo re ru l i n g o n a m o t i on t o s t ay

p ro ceed in g s p en d i n g CBM rev i ew. S ee 2 0 1 4 W L 3 3 6 0 8 0 6 at * 9

.

2 / I n reply

, de fe n d a n t n o t e s that “CB M reviews simply require a related case in which the petitioner has been sued for infring e ment of the subject p atent. See AI A § 18(a)(1)(B ); 37 C.F .R. § 4 2.302(a).” Doc. 63 a t 6. To illustrate that the AI A related suit requirement doe s n o t e x clude infring ement actions in the Court o f F ederal Claims p u rsuant to 28 U.S.C. § 1 498, the institution of

an I n ter Partes review trial based on a related Court of F ederal Claims case is c ited as follows: “ See

BAE Sys. v. Cheetah Omni, LLC

, I PR2013-00175, Paper 1 5 (P.T.A.B

. J uly 3, 2013) (attached as Ex

. C [ D oc. 63] ) (related to Cheetah Omni, LLC v. United S tates

, No. 11-255 C ( F ed. Cl. f iled April 22, 2011).”

- 4 -W h ere, as h ere, an i s su e i s rai s ed as t o s t an d i n g t o s eek CBM rev i ew, a

d eci s i o n b y t h e PTAB o n t h e USPS’ s p et i t i o n w i ll b e h el p fu l a n d r el ev an t wi th

res p ect t o res o lu t i o n o f t he pen d i n g s t ay m o ti o n

. O f co urs e, i f USPS’ s p et i t i o n were

n o t g ran t ed

, t h e s t ay i s s u e b eco m es m o ot

. If t he p et i ti o n were t o b e g ran t ed

, t h e cas e fo r a s t ay b eco m es s t ro n g er. Id

.

In t h es e ci rcu m s t an ces i t i s ORDERED :

(1 ) Pro ceed i ng s o n Defen d an t ’ s M o t i o n t o St ay Pro ceed i n g s Pen d i n g C B M

Rev iew b y t he PTAB, D o c. 6 0

, s h al l b e s u s p en d ed u n t i l t h e PTAB i s s u es a d eci s i o n

o n wh et h er t o i n s t i t u te t h e req u es t ed rev i ew; an d

(2 ) W i t h i n 2 0 d ay s fo ll o wi n g PTAB’ s d eci s i o n , w ere it to i n i t i at e a CBM

rev i ew wi t h r e s p e c t t o as s ert ed cl ai m s 3 9 t h ro u g h 44 o f t he ’ 5 4 8 Pat en t, ab s en t

ag reem en t b y t h e p art i es as t o t h e d i s p o si ti o n o f t h e p en d i n g m o t i on fo r a s t ay , t h e

p art i es s h al l fi le s u pp l em en t al b ri efs

, no t t o ex ceed 1 0 pag es , rel at i v e t o th e i m p act

, i f an y , o f t h e PTAB’ s d eci s i o n o n t h e i s s ue o f a s t ay

.

s/ J ames F . Merow
J am es F. M ero w Sen i o r J u d g e

- 5 -