Source: http://stlr.org/2019/03/19/return-mail-v-usps-can-the-government-petition-for-post-issuance-reviews/
Timestamp: 2019-04-19 20:29:27+00:00

Document:
A few weeks ago, on February 19th, 2019, the Supreme Court heard oral arguments in Return Mail, Inc. v. United States Postal Service. 868 F.3d 1350 (Fed. Cir. 2017), cert. granted in part sub nom., 139 S. Ct. 397 (Oct. 26, 2018) (No. 17-1594). The question before the Court: whether the government qualifies as a “person” capable of petitioning for the institution of post-issuance patent reviews under the AIA. See 35 U.S.C. §§ 311-19 (IPR); id. §§ 321-29 (PGR); AIA § 18, Pub. L. No. 112-29, 125 Stat. 284, 329–31 (2011) (CBM review). The answer the Court provides to this question could have important implications for the future of government involvement in actively addressing the effects of dubious or misused patents.
Return Mail is a company directed toward “patented automated solutions for end-user companies and print mail service providers that send large quantities of mail and are plagued by the costly and manual problem of return mail.” One of these patented solutions gave rise to the dispute now before the Supreme Court. U.S. Patent No. 6,826,548 (“’548 patent”), a covered business method (“CMB”) patent, see AIA § 18(d), claims an automated method of processing and updating mail rendered undeliverable due to inaccurate or outdated addressing information. The implementation of this method is straightforward. First, initial address information for the intended recipient is encoded on each piece of mail using a bar code. ’548 patent col. 2 ll. 4-5. Any undeliverable items are then sent to a processing center where the bar code is used to catalogue and update address information, which is then relayed back to the sender for further action. Id. at col. 2 l. 14 – col. 4 l. 33.
In February 2011, Return Mail brought suit against the United States Postal Service in the Court of Federal Claims, see 35 U.S.C. § 1498(a), alleging that the Postal Service had unlawfully practiced the method covered by the ’548 patent. Though not addressed by the Supreme Court, the question of whether unauthorized government use constitutes infringement within the meaning of AIA § 18 was disputed before the Patent Trial and Appeals Board (PTAB) and Federal Circuit. In response, in April 2014, the Postal Service petitioned the United States Patent and Trademark Office (“USPTO”) for institution of CBM review proceedings, challenging the validity of the ’548 patent on multiple grounds.
While Return Mail challenged the Postal Service’s ability to petition on several grounds, the issue of whether the government qualified as a “person” under the AIA was only raised by Judge Newman in her dissent against the Federal Circuit majority, which upheld the PTAB’s decision invalidating the challenged claims. See Return Mail, Inc. v. United States Postal Serv., 868 F.3d 1350, 1372 (Fed. Cir. 2017) (Newman, J., dissenting), cert. granted in part sub nom. Return Mail, Inc. v. U.S. Postal Serv., 139 S. Ct. 397 (2018). Return Mail subsequently petitioned for a writ of certiorari, which the Court granted on the general question of whether government agencies qualified as “persons” capable of petitioning for review.
Return Mail’s argument that the government is barred from petitioning relied on two basic points: (1) the general presumption that the term “person” does not include the government unless otherwise indicated and (2) the undisputed fact that the government, which can only be sued for infringement in the Court of Federal Claims, is not subject to the estoppel provisions which preclude parties from raising “any ground that the petitioner raised or reasonably could have raised during [the review]” before district courts. See 35 U.S.C. §§ 315(e)(2), 325(e)(2). The second point provides most of the force to Return Mail’s argument—interpreting “person” to include the government places the government in the unique position in which it effectively receives “two bites” at the invalidity apple. At oral argument, several justices, particularly Justices Sotomayor and Gorsuch, also seemed concerned by the potential unfairness of a proceeding in which executive agencies act as both the adjudicating body (PTAB) and prosecutor (petitioning agency). Moreover, questions of executive consistency arise when a petitioning agency disputes the determination of the PTAB, essentially forcing the government to speak out of both sides of its mouth.
The Justices’ questions gave little indication of where the Court will ultimately arrive on this issue. The answer they do provide, however, could have important implications for the function and effectiveness of post-issuance review proceedings, particularly IPRs.
At the close of oral argument, the Deputy Solicitor General noted in response to a question from the bench that the government had only petitioned for institution of post-issuance reviews on about 20 occasions since the passage of the AIA in 2011. Thus, were the Supreme Court to reverse the Federal Circuit, there would appear to be little real-world impact. However, this view may be shortsighted. Rather, closing off government access to post-issuance reviews could dramatically restrict the government’s (currently under-utilized) ability to police patent quality and use. For example, IPRs offer a significantly cheaper and more streamlined avenue through which the government, perhaps the Federal Trade Commission or Department of Justice, might seek to address problems of unjustifiably litigious patent assertion entities or potentially unlawful agreements, such as reverse settlement payments. Recognizing that a major driver behind enactment of the AIA was Congressional concern with the perception of patent quality and abuse, foreclosing the government from utilizing these critical review procedures could significantly undercut the underlying purpose of the act. Thus, while reversal of the Federal Circuit may have only minimal impact on the government’s current practices, affirmation would preserve an important mechanism which the government may one day seek to utilize to better maintain and enforce the patent system at large.
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