U.S. Postal Service truck. Photo: Diego M. Radzinschi/ALM

The government is not a “person” that has standing to challenge a patent under the America Invents Act, the U.S. Supreme Court ruled Monday.

The justices ruled 6-3 that while the AIA does not define a “person” in the statute, the court applied a long-standing interpretation that it does not include federal agencies such as the U.S. Postal Service. The justices said a person has been defined to include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals, but it does not include the government.

“This presumption reflects 'common usage,'” Justice Sonia Sotomayor wrote. “It is also an express directive from Congress: The Dictionary Act has since 1947 provided the definition of 'person' that courts use '[i]n determining the meaning of any Act of Congress, unless the context indicates otherwise.'”

Sotomayor was joined by Chief Justice John Roberts Jr., and Justices Clarence Thomas, Neil Gorsuch, Samuel Alito and Brett Kavanaugh. Justice Stephen Breyer filed a dissenting opinion, which was joined by Justices Ruth Bader Ginsburg and Elena Kagan.

Breyer said the presumption is not “a hard and fast rule” and the statute must be examined in context. It “makes little sense to presume that the word 'person' excludes the Government,” he wrote, given that surrounding provisions “point to the opposite conclusion.”

---

➤➤ You can find all of the latest IP news in Scott Graham's newsletter, Skilled in the Art. Sign up here.

---

Covington & Burling partner Beth Brinkmann had the winning argument for patent owner Return Mail Inc. Deputy Solicitor General Malcolm Stewart argued for the government.

Brinkmann, who is co-chairwoman of Covington's appellate and Supreme Court litigation group, had argued that the government has plenty of opportunities to challenge patent validity, whether through ex parte reexaminations or in court. “The court's decision confirms that federal agencies do not get an extra chance to challenge privately held patents under the AIA,” said Brinkmann, who had help on the case from Covington partners Richard Rainey, Kevin King and others.

She also had help from Federal Circuit Judge Pauline Newman, who raised the issue sua sponte in a dissent at the appellate court.

Return Mail owns U.S. Patent 6,826,548, which claims a method for processing mail that is undeliverable, according to Sotomayor's opinion. Beginning in 2003, USPS allegedly began exploring the possibility of licensing Return Mail's invention, but the parties never reached an agreement. Then in 2006 USPS introduced an enhanced address-change service that Return Mail said infringed the patent.

Return Mail sued in the Court of Federal Claims, and the government sought AIA review. The suit has been on hold for several years while the AIA proceedings and appeals played out.

Under the AIA, almost anyone can ask the Patent Trial and Appeal Board to review the validity of a patent. Specifically, the AIA states that “a person who is not the owner of patent” may petition for inter partes review of a patent, and any person who's been sued for infringement may petition for covered business method review. Both are administrative procedures for determining patent validity at the PTAB.

Corporations are generally understood to be “persons” under the law, and Return Mail apparently thought the government would qualify, too. It didn't challenge the government's authority to petition when it was before the PTAB or at the U.S. Court of Appeals for the Federal Circuit.

Monday's decision vindicates Newman, who concluded in Return Mail v. USPS that the PTAB didn't have statutory jurisdiction to take up the case and invalidate Return Mail's patent. “The general statutory definition is that a 'person' does not include the United States and its agencies unless expressly provided,” Newman wrote.

Sotomayor agreed with that presumption Monday, and found nothing in the text of the AIA to rebut it. “The Patent Act and the AIA refer to 'person[s]' in at least 18 different places, and there is no clear trend: Sometimes 'person' plainly includes the Government, sometimes it plainly excludes the Government, and sometimes—as here—it might be read either way,” she wrote.

She also noted that when the government is accused of patent infringement, it doesn't face the risk of injunctions or damages beyond reasonable compensation. “Because federal agencies face lower risks, it is reasonable for Congress to have treated them differently,” she wrote.

In dissent, Breyer argued that the AIA's goal of providing an easier way to challenge weak patents should apply equally whether it's the government or a private party that's accused of infringing.

“Why,” Breyer asked, “would Congress have declined to give federal agencies the power to invoke these same administrative procedures? I see no good answer to that question.”

Baker Botts partner Eliot Williams said he does not expect the decision to have much impact beyond the parties. “Practically speaking, there are just not that many cases where the federal government is a petitioner,” he said.

According to Return Mail, before passage of the AIA, there were 2,000 requests for inter partes reexamination and only one was instigated by the government. Under the AIA, the government has filed only “a handful” of petitions, according to Return Mail.

This is only the fourth decision from the Supreme Court interpreting AIA procedures at the PTAB, so practitioners who appear there are always looking for clues to other hot-button issues.

Williams said that parties seeking to expand constitutional standing for PTAB appeals to the Federal Circuit might seize on a statement in Sotomayor's opinion: “Any party 'dissatisfied' with the Board's final decision may seek judicial review in the Court of Appeals for the Federal Circuit.”

But Williams said Sotomayor was more likely referring to the statutory requirements, rather than making “a bold statement” about constitutional standing.

Ropes & Gray partner Matthew Rizzolo noted that Sotomayor wrote that AIA proceedings are “adversarial, adjudicatory proceedings between the 'person' who petitioned for review and the patent owner.” States will likely point to that language as supporting their contention that sovereign immunity should shield their patents from AIA review, Rizzolo said. Petitioners argue that AIA proceedings are merely the PTO taking a “second look” at the issuance of a patent, with the director acting as gatekeeper of the proceedings.

“If I'm someone who wants to see state sovereign immunity weighed in on by the Supreme Court, this opinion certainly encourages that,” Rizzolo said.

 

Read the decision