Supreme Court: Government Agencies Cannot Petition for AIA Reviews
On June 10,
the U.S. Supreme Court, in a 6-3 decision in Return Mail Inc. v. U.S. Postal Service, No. 17-1594, held that a
federal agency is not a “person” able to seek inter partes review, post grant
review, or covered business method review of an issued patent.
The
Leahy-Smith America Invents Act of 2011, 35 U. S. C. §100 et seq. (AIA) provides that a “person” who is not the owner of a
patent may file a petition to institute inter partes review, post-grant review,
or CBM review of an issued patent. 35 U.
S. C. §§ 311(a), 321(a); AIA § 18(a)(1)(B), 125 Stat. 330.
Return Mail,
Inc., sued the United States Postal Service for infringement in the U.S. Court
of Federal Claims. The Postal Service
petitioned for CBM review of the asserted patent, and the Patent Trial and
Appeal Board (Board) held that the claims were directed to ineligible subject
matter. The Federal Circuit affirmed the
Board’s decision, over a dissent, additionally holding that the government is a
“person” eligible to petition for CBM review.
The Supreme Court granted certiorari to determine whether a federal
agency is a “person” capable of petitioning for post-issuance review under the
AIA.
Writing for
the majority, Justice Sotomayor first noted that the patent statutes do not
define the term “person.” Instead, there
is a “longstanding interpretive presumption that ‘person’ does not include the
sovereign.” The Court highlighted the “express
directive” from Congress in the Dictionary Act (1 U. S. C. § 1) that has defined
“person” to include “corporations, companies, associations, firms,
partnerships, societies, and joint stock companies, as well as individuals”
since 1947. As the Court stated, “[n]otably
absent from the list of ‘person[s]’ is the Federal Government.”
The Court then
rejected, as contrary to precedent, the Postal Service’s argument that the
presumption only applies when the government is subject to liability. And, according to the majority, the statutory
text and legislative context did not override the presumption that the
government is not a person because “[t]he Patent Act and the AIA refer to
‘person[s]’ in at least 18 different places,” with “no clear trend” as to
whether “person” includes or excludes the government.
The Court
also did not agree that the ability of federal agencies to obtain patents and utilize
ex parte reexamination proceedings compelled a different result. First, the
ability to obtain patents, according to the Court, “does not speak to whether
Congress meant for the Government to participate as a third-party challenger in
AIA review proceedings” and there is no such longstanding practice for AIA
reviews because the AIA was only recently enacted.
Second, ex parte reexamination was “fundamentally different” than AIA
reviews because reexamination did not allow participation by the petitioner in
the proceeding. According to the Court,
“there are good reasons Congress might have authorized the Government to
initiate a hands-off ex parte reexamination but not to become a party to a
full-blown adversarial proceeding before the Patent Office and any subsequent
appeal.”
The Court
then highlighted the “unique position” of the government among alleged infringers. Specifically, the Court reasoned that federal
agencies already face “lower risks” regarding patent infringement under 28
U.S.C. § 1498, and thus “it is reasonable for Congress to have treated them
differently” from private parties. The
Court highlighted that the government, unlike private parties, benefits from
limited damages (“reasonable and entire compensation”), no injunctions, no jury
trials, and no punitive damages.
The Court also
noted that to recognize a federal agency as a person would lead to the “awkward
situation” of a patent owner defending “the patentability of her invention in
an adversarial, adjudicatory proceeding initiated by one federal agency (such
as the Postal Service) and overseen by a different federal agency (the Patent
Office).”
Justice Breyer (joined by Justices Ginsburg and Kagan) dissented, focusing on reconciling the varying uses of “person” in the Patent Act as including or excluding the government based on precedent or logical context. The dissent discussed the legislative history of the AIA as consistent with allowing a government agency to participate in AIA reviews and disputed whether the “awkward situation” identified by the majority was, in fact, awkward at all.
*Blair A. Silver represented the American Intellectual Property Law Association in filing an amicus brief in the proceedings.