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Supreme Court: Federal Government Is Not Permitted to Challenge Patents Under the AIA

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Former Counsel
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By C. Matthew Rozier

In a recent 6-3 decision, the Supreme Court held that the U.S. Postal Service and other federal agencies are prohibited from challenging the validity of patents post-issuance under the proceedings created by the Leahy-Smith America Invents Act (“AIA”).  The Court’s decision in Return Mail Inc. v. U.S. Postal Service reversed a Federal Circuit decision holding that the federal government is a “person” for the purposes of 35 U.S.C. §§ 311 and 321.  In reversing, the Court cited a longstanding presumption that a “person” does not include the federal government.  Importantly, the decision leaves the door open for federal agencies to challenge patents post-issuance using the vehicle of ex parte reexamination under 35 U.S.C. § 301.

Return Mail owns a patent that covers a method for processing undeliverable mail.  After the Return Mail patent issued, the Postal Service introduced an address-change service, and Return Mail alleged that the new service infringed its patent.  Anticipating a lawsuit, the Postal Service filed a request for ex parte reexamination that resulted in the Patent Office affirming the validity of Return Mail’s patent.  Return Mail then sued the Postal Service claiming patent infringement, and the Postal Service petitioned for a covered business method (“CBM”) review of the patent under the AIA.  The Patent Board held that the patent was directed to ineligible subject matter and cancelled all claims.  Return Mail appealed that ruling, but the Federal Circuit affirmed, holding that the federal government is a person as used in the relevant AIA provisions.

In holding that the federal government is not a person for AIA purposes, the Court first noted the “longstanding interpretive presumption that ‘person’ does not include the sovereign, and thus excludes a federal agency like the Postal Service,” citing Vermont Agency of Natural Resources v. United States ex rel. Stevens (2000).  That presumption put the burden on the Postal Service to identify an indication in the AIA’s text or context showing that Congress intended to include the federal government as a “person.”

The Postal Service presented three arguments to overcome the presumption.  First, other sections of the patent statutes appear to include the government as a person, and thus the consistent-usage principle should overrule the presumption.  The Court disagreed, finding that the patent statues were inconsistent in their inclusion or exclusion of the government as a person.  Second, the Postal Service argued that the government had long participated in various aspects of the patent system, e.g., federal employees can be named inventors on patents and the government may participate in ex parte reexaminations.  Again disagreeing, the Court noted that the requester in an ex parte reexamination, unlike that in AIA proceedings, does not actively participate in the process after filing the initial request.  Finally, the Postal Service argued that it must be considered a person because it is subject to civil liability for patent infringement, and that it would be denied a benefit available to other parties if it had no access to AIA proceedings.  The Court again disagreed, holding that the presumption stands and that the Postal Service, and by extension the federal government, is not eligible to participate in AIA post-issuance challenges.

The dissent, authored by Justice Breyer, would have reached the opposite conclusion, and questions why the government should be able to apply for and obtain patents and sue others for patent infringement, but should be excluded from AIA challenges.