On June 10, 2019, the Supreme Court held that a federal agency is not a “person” who can file a petition for review of a patent under one of the three new proceedings created by the America Invents Act (“AIA”).  Return Mail, Inc. v. United States Postal Service, 587 U.S. ____, 2019 WL 2412904, at *3 (U.S. June 10, 2019) (“Return Mail“).  Specifically, the Court held that federal agencies cannot file a petition for inter partes, post-grant, or covered business method review with the Patent Trial and Appeal Board (“PTAB”) (collectively, “PTAB proceedings”).  Id.

Return Mail arose out of failed patent negotiations between the United States Postal Service (“USPS”) and Return Mail, Inc. (“Return Mail”), which owns U.S. Patent No. 6,826,548 (“the ’548 patent”) directed to methods of processing undeliverable mail.  Id. at *5.  After the failed negotiations, USPS introduced an enhanced system for processing undeliverable mail, prompting Return Mail to claim the system infringed the ’548 patent.  Id.  USPS subsequently petitioned for ex parte reexamination, which resulted in the issuance of new patent claims.  Id.  After the ex parte reexamination, Return Mail sued USPS in the Court of Federal Claims for infringement of the reexamined patent.  Id.  Concurrently, USPS petitioned for covered business method review, leading the United States Patent and Trademark Office (“PTO”) to cancel the reexamined claims for claiming patent ineligible subject matter, a decision affirmed by the Federal Circuit.  Id.  Return Mail petitioned for certiorari, and the Supreme Court granted Return Mail’s petition on the first question, “[w]hether the government is a ‘person’ who may petition to institute review proceedings under the AIA.”  Petition for a Writ of Certiorari, Return Mail, Inc. v. United States Postal Service, No. 17–1594, 2018 WL 2412130, at *i (U.S. May 14, 2018); Return Mail, Inc. v. United States Postal Service, 139 S. Ct. 397 (2018).  The Supreme Court has now reversed the Federal Circuit’s decision and remanded the case.

Justice Sotomayor wrote the opinion for the majority, joined by Justices Thomas, Roberts, Alito, Gorsuch, and Kavanaugh.  Return Mail, 2019 WL 2412904, at *3.  The text of the AIA allows “a person” other than the patent owner to file petitions to institute PTAB proceedings.  The majority reasoned that because the patent statutes do not expressly define this term, the “longstanding interpretive presumption that ‘person’ does not include the sovereign” should apply.  Id. at *5–6 (citations omitted).  To overcome this presumption, the USPS had to show that the context of the AIA affirmatively indicated that Congress intended for the government to utilize PTAB proceedings.  Id. at *6.

The majority rejected USPS’s arguments on this issue.  The majority first disagreed that other definitions of “person” in the patent statutes, which included the government, dictated the result here, because the various definitions of “person” were inconsistent.  Id. at *7–8.  The majority also did not find the federal government’s longstanding history of participation in the patent system relevant, because the government’s ability to apply for a patent does not shed light on whether the government can challenge another’s patent.  Id. at *8.  The majority similarly distinguished the government’s participation in ex parte reexamination proceedings because, unlike reexamination, PTAB proceedings are adversarial and involve active participation of the third-party “person.”  Id. at *9.  Finally, the majority rejected USPS’s argument that it should be able to take advantage of PTAB proceedings like other accused infringers, because federal agencies face less risk defending patent infringement suits, due to the patentee’s inability to seek injunctive relief and punitive damages against the government.  Id. at *10.

Justice Breyer, joined by Justices Ginsburg and Kagan, dissented, arguing that certain parts of the patent statutes overcame the presumption that “person” excludes the government; Justice Breyer found it important that the government can obtain patents and take advantage of certain infringement defenses.  Id. at *11–12.  The dissent also cited as support the AIA’s legislative history, which reflected Congress’s desire to improve patent quality.  Id. at *12.  Specifically, the dissent pointed out that the efficiency objectives of the AIA were implicated whether the government or a private party is challenging the patent, and this rationale should therefore allow the government to petition for review in PTAB proceedings.  Id.