SCOTUS Watch: Government Is Not a Person for Purposes of AIA

AIA CBM IPR patent PGR scotus watch

On June 10, 2019, the U.S. Supreme Court overturned the Court of Appeals for the Federal Circuit in Return Mail, Inc. v. United States Postal Service,[1] in which the Court held that the Government was not a “person” for definitions of the America Invents Act (AIA).

returnmail-fig1
Source: U.S. Patent No. 6,826,548 B2, Nov. 30, 2004, to Ralph Mitchel Hungerpiller & Ronald C. Cagle (inventors); Return Mail, Inc. (assignee)

The case originates from Return Mail’s patent, U.S. Patent No. 6,826,548 (‘548) directed to a method for processing undeliverable mail.  The ‘548 patent was the subject of licensing negotiations with the U.S. Postal Service (USPS), although no agreement was ever reached.  In 2006, the U.S. Postal Service introduced its own undeliverable mail processing system, and Return Mail asserted that it infringed the ‘548 patent.  The USPS then sought ex parte reexamination review (MPEP 2209) of the ‘548 patent.  The USPTO cancelled the originally issued claims but issued new claims, upholding validity of the ‘548 patent.  Return Mail then sued in the U.S. Court of Federal Claims, seeking redress for unauthorized use of the ‘548 patent.  While the case was pending, the USPS petitioned for a Covered Business Method (CBM) review in the USPTO, which the USPTO instituted and found the ‘548 patent claims invalid.  The Court of Appeals for the Federal Circuit affirmed.  Return Mail petitioned for writ of certiorari with the Court, and certiorari was granted.  The issue was whether the Government qualified as a “person” for purposes of challenging a patent in the AIA’s post-grant proceedings.

The majority held that the Government was not a person.  The majority opinion was written by Justice Sotomayor, and joined by Chief Justice Roberts, and Justices Thomas, Alito, Gorsuch, and Kavanaugh.

There are three post-grant proceedings under the AIA: inter partes review (IPR), post-grant review (PGR), and CBM.

IPRs (35 U.S.C. §311)  require a “person” to file the petition:

(a)        . . . a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent.

PGRs (35 U.S.C. §321) also require a “person” to file the petition:

(a)        . . . a person who is not the owner of the patent may file with the Office a petition to institute a post-grant review of the patent.

Further, CBM reviews (AIA §18(1)(D)) require a “person”:

(B) A person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent.

Justice Sotomayor noted that the AIA does not define “person.”  In its absence, Court precedence and the regular dictionary meaning (as defined by the Dictionary Act) provided guidance.  She observed that the Court applied a “longstanding interpretive presumption” that ‘person’ does not include the sovereign,” and therefore would exclude federal agencies, including the USPS.[2]  Further, the Dictionary Act has defined “person”:

The Act provides that the word ‘person’ . . . includes corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.  Notably absent from the list of ‘persons’ is the Federal Government.

Justice Sotomayor also responded to the USPS’s argument that it is a “person” for purposes of petitioning for a post-grant proceeding because the Government is subject to civil liability for infringement of a patent, just like any other nongovernmental infringer.  In this sense, the USPS argued that the Government should be afforded the same benefit – that is, the right to petition in a post-grant proceeding – as other would-be patent owners.  However, Justice Sotomayor rejected this argument:

We see no oddity [] in Congress’ affording nongovernmental actors an expedient route that the Government does not also enjoy for heading off potential infringement suits.  Those other actors face greater and more uncertain risks if they misjudge their right to use technology that is subject to potentially invalid patents.  Most notably, §1498 restricts a patent owner who sues the Government to her “reasonable and entire compensation” for the Government’s infringing use; she cannot seek an injunction, demand a jury trial, or ask for punitive damages, all of which are available in infringement suits against nongovernmental actors under §271(e)(4).  Thus, although federal agencies remain subject to damages for impermissible uses, they do not face the threat of preliminary injunctive relief that could suddenly halt their use of a patented invention, and they enjoy a degree of certainty about the extent of their potential liability that ordinary accused infringers do not.  Because federal agencies face lower risks, it is reasonable for Congress to have treated them differently.

In dissent, Justice Breyer, joined by Justices Ginsburg and Kagan, disagreed with the majority, noting that since the Federal Government may file a patent application and procure a patent, it should also bee deemed a “person” for purposes of post-grant proceedings.  He took issue with the diametrically opposite positions in which Congressional interpretative language defined the Government, or not, as a “person”:

The fact that the word “person” does not apply to the Government where that application is close to logically impossible proves nothing at all about the word’s application here.  On the one hand, Congress has used the word “person” to refer to Government agencies when the statute concerns the criteria for obtaining patents, or when the statute concerns the availability of certain infringement defenses.  On the other, Congress has not used the word “person” to refer to Government agencies when doing so would be close to logically impossible, or where the context otherwise makes plain the Government is not a “person” . . . It therefore makes little sense to presume that the word “person” excludes the Government, for the surrounding provisions point to the opposite direction.

He concludes with “Why?”:

Government agencies can apply for and obtain patents; they can maintain patents; they can sue other parties for infringing their patents; they can be sued for infringing patents held by private parties; they can invoke certain defenses to an infringement lawsuit on the same terms as private parties; they can invoke one of the pre-existing administrative procedures for challenging the validity of a private party’s patents; and they can be forced to defend their own patents when a private party invokes one of the three procedures established by the AIA.  Why, then, would Congress have declined to give federal agencies the power to invoke these same administrative procedures?

This case is unremarkable because the scope of its holding is limited.  By its own admission, and noted by the Court’s opinion, is that the Government only filed 14 post-grant proceeding petitions since the AIA’s inception in 2012.  However, Return Mail’s big picture would seem to preclude all avenues for the Government to challenge a potentially invalid patent only as a defense under 28 U.S.C. §1498(a), in the Court of Federal Claims.  Because the ex parte reexamination statute, 35 U.S.C. §302, also requires a “person” to file a request for reexamination, it appears the Government as a challenging party is precluded this avenue, as well.


[1] 587 U.S.___ (2019) (slip op.), rev’g and remanding 868 F.3d 1350 (Fed. Cir. 2018).

[2] See Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 780-81 (2000).