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Return Mail, Inc. v. United States Postal Service

United States Supreme Court

June 10, 2019


          Argued February 19, 2019


         The Leahy-Smith America Invents Act (AIA) of 2011 created the Patent

Trial and Appeal Board, 35 U.S.C. §6(c), and established three types of administrative review proceedings before the Board that enable a "person" other than the patent owner to challenge the validity of a patent post-issuance: (1) "inter partes review," §311; (2) "post-grant review," §321; and (3) "covered-business-method review" (CBM review), note following §321. After an adjudicatory proceeding, the Board either confirms the patent claims or cancels some or all of them, §§318(b), 328(b). Any "dissatisfied" party may then seek judicial review in the Federal Circuit, §§319, 329. In addition to AIA review proceedings, a patent can be reexamined either in federal court during a defense to an infringement suit, §282(b), or in an ex parte reexamination by the Patent Office, §§301(a), 302(a).
Return Mail, Inc., owns a patent that claims a method for processing undeliverable mail. The Postal Service subsequently introduced an enhanced address-change service to process undeliverable mail, which Return Mail asserted infringed its patent. The Postal Service petitioned for ex parte reexamination of the patent, but the Patent Office confirmed the patent's validity. Return Mail then sued the Postal Service in the Court of Federal Claims, seeking compensation for the unauthorized use of its invention. While that suit was pending, the Postal Service petitioned for CBM review. The Patent Board concluded that the subject matter of Return Mail's claims was ineligible to be patented and thus canceled the claims underlying its patent. The Federal Circuit affirmed, concluding, as relevant here, that the Government is a "person" eligible to petition for CBM review.

         Held: The Government is not a "person" capable of instituting the three AIA review proceedings. Pp. 6-18.

(a) In the absence of an express definition of the term "person" in the patent statutes, the Court applies a "longstanding interpretive presumption that 'person' does not include the sovereign," and thus excludes a federal agency like the Postal Service. Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 780-781. This presumption reflects "common usage," United States v. Mine Workers, 330 U.S. 258, 275, as well as an express directive from Congress in the Dictionary Act, 1 U.S.C. §1. The Dictionary Act does not include the Federal Government among the persons listed in the definition of "person" that courts use "[i]n determining the meaning of any Act of Congress, unless the context indicates otherwise," §1. Contrary to the Postal Service's contention otherwise, this Court has, in several instances, applied the presumption against treating the Government as a statutory person even when, as here, doing so would exclude the Government or one of its agencies from accessing a benefit or favorable procedural device. See, e.g., United States v. Cooper Corp., 312 U.S. 600, 604-605, 614. Thus, the Court here proceeds from the presumption that the Government is not a "person" authorized to initiate these proceedings absent an affirmative showing to the contrary. Pp. 7-9.
(b) The Postal Service must point to some indication in the AIAs text or context affirmatively showing that Congress intended to include the Government as a "person," but its arguments are unpersuasive. Pp. 9-17.
(1) The Postal Service first argues that the AIAs reference to a "person" in the context of post-issuance review proceedings must include the Government because other references to persons in the patent statutes appear to do so. The consistent-usage principle-i.e., when Congress uses a word to mean one thing in one part of the statute, it will mean the same thing elsewhere in the statute- however, "'readily yields to context, '" especially when a statutory term is used throughout a statute and takes on "distinct characters" in distinct statutory provisions. Utility Air Regulatory Group v. EPA, 573 U.S. 302, 320. Here, where there are at least 18 references to "person[s]" in the Patent Act and the AIA, no clear trend is shown: Sometimes "person" plainly includes or excludes the Government, but sometimes, as here, it might be read either way. The mere existence of some Government-inclusive references cannot make the "affirmative showing," Stevens, 529 U.S., at 781, required to overcome the presumption that the Government is not a "person" eligible to petition for AIA review proceedings. Pp. 9-12.
(2) The Postal Service next points to the Federal Government's longstanding history with the patent system, arguing that because federal officers have been able to apply for patents in the name of the United States since 1883, Congress must have intended to allow the Government access to AIA review proceedings. But the Government's ability to obtain a patent does not speak to whether Congress meant for the Government to participate as a third-party challenger in AIA proceedings established only eight years ago. Moreover, even assuming that the Government may petition for ex parte reexamination of an issued patent, as a 1981 Patent Office Manual of Patent Examining Procedure (MPEP) indicates, an ex parte reexamination process is fundamentally different from an AIA review proceeding. The former process is internal, and the party challenging the patent may not participate. By contrast, adversarial, adjudicatory AIA review proceedings are between the "person" who petitioned for review and the patent owner; they include briefing, a hearing, discovery, and the presentation of evidence; and the losing party has appeal rights. Congress may have had good reason to authorize the Government to initiate a hands-off ex parte reexamination but not to become a party to the AIAs full-blown adversarial proceeding. Nothing suggests that Congress had the 1981 MPEP statement about ex parte reexamination in mind when it created the AIA review proceedings. And because there is no "settled" meaning of the term "person" with respect to the newly established AIA review proceedings, see Bragdon v. Abbott, 524 U.S. 624, 645, the MPEP does not justify putting aside the presumptive meaning of "person." Pp. 13-15.
(3) Finally, the Postal Service argues that it must be a "person" who may petition for AIA review proceedings because, like other potential infringers, it is subject to civil liability and can assert a defense of patent invalidity. It would thus be anomalous, the Postal Service posits, to deny it a benefit afforded to other infringers- namely, the ability to challenge a patent de novo before the Patent Office, rather than only with clear and convincing evidence in defense to an infringement suit. Federal agencies, however, face lower and more calculable risks than nongovernmental actors, so it is reasonable for Congress to have treated them differently. Excluding federal agencies from AIA review proceedings also avoids the awkward situation of having a civilian patent owner defend the patentability of her invention in an adversarial, adjudicatory proceeding initiated by one federal agency and overseen by a different federal agency. Pp. 15-17.

868 F.3d 1350, reversed and remanded.

          SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS, C. J., and Thomas, Alito, Gorsuch, and Kavanaugh, JJ., joined. BREYER, J., filed a dissenting opinion, in which GINSBURG and KAGAN, JJ., joined.



         In the Leahy-Smith America Invents Act of 2011, 35 U.S.C. §100 et seq., Congress created the Patent Trial and Appeal Board and established three new types of administrative proceedings before the Board that allow a "person" other than the patent owner to challenge the validity of a patent post-issuance. The question presented in this case is whether a federal agency is a "person" able to seek such review under the statute. We conclude that it is not.



         The Constitution empowers Congress "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective . . . Discoveries." Art. I, §8, cl. 8. Pursuant to that authority, Congress established the United States Patent and Trademark Office (Patent Office) and tasked it with "the granting and issuing of patents." 35 U.S.C. §§1, 2(a)(1).

         To obtain a patent, an inventor submits an application describing the proposed patent claims to the Patent Office. See §§111(a)(1), 112. A patent examiner then reviews the application and prior art (the information available to the public at the time of the application) to determine whether the claims satisfy the statutory requirements for patentability, including that the claimed invention is useful, novel, nonobvious, and contains eligible subject matter. See §§101, 102, 103. If the Patent Office accepts the claim and issues a patent, the patent owner generally obtains exclusive rights to the patented invention throughout the United States for 20 years. §§ 154(a)(1), (2).

         After a patent issues, there are several avenues by which its validity can be revisited. The first is through a defense in an infringement action. Generally, one who intrudes upon a patent without authorization "infringes the patent" and becomes subject to civil suit in the federal district courts, where the patent owner may demand a jury trial and seek monetary damages and injunctive relief. §§271(a), 281-284. If, however, the Federal Government is the alleged patent infringer, the patent owner must sue the Government in the United States Court of Federal Claims and may recover only "reasonable and entire compensation" for the unauthorized use. 28 U.S.C. § 1498(a).

         Once sued, an accused infringer can attempt to prove by clear and convincing evidence "that the patent never should have issued in the first place." Microsoft Corp. v. i4i L. P., 564 U.S. 91, 96-97 (2011); see 35 U.S.C. §282(b). If a defendant succeeds in showing that the claimed invention falls short of one or more patentability requirements, the court may deem the patent invalid and absolve the defendant of liability.

         The Patent Office may also reconsider the validity of issued patents. Since 1980, the Patent Act has empowered the Patent Office "to reexamine-and perhaps cancel-a patent claim that it had previously allowed." Cuozzo Speed Technologies, LLC v. Lee, 579 U.S.__, __(2016) (slip op., at 3). This procedure is known as ex parte reexamination. "Any person at any time" may cite to the Patent Office certain prior art that may "bea[r] on the patentability of any claim of a particular patent"; and the person may additionally request that the Patent Office reexamine the claim on that basis. 35 U.S.C. §§301(a), 302(a). If the Patent Office concludes that the prior art raises "a substantial new question of patentability," the agency may reexamine the patent and, if warranted, cancel the patent or some of its claims. §§303(a), 304-307. The Director of the Patent Office may also, on her "own initiative," initiate such a proceeding. §303(a).

         In 1999 and 2002, Congress added an "inter partes reexamination" procedure, which similarly invited "[a]ny person at any time" to seek reexamination of a patent on the basis of prior art and allowed the challenger to participate in the administrative proceedings and any subsequent appeal. See §311(a) (2000 ed.); §§314(a), (b) (2006 ed.); Cuozzo Speed Technologies, 579 U.S., at__(slip op., at 3).


         In 2011, Congress overhauled the patent system by enacting the America Invents Act (AIA), which created the Patent Trial and Appeal Board and phased out inter partes reexamination. See 35 U.S.C. §6; H. R. Rep. No. 112-98, pt. 1, pp. 46-47. In its stead, the AIA tasked the Board with overseeing three new types of post-issuance review proceedings.

         First, the "inter partes review" provision permits "a person" other than the patent owner to petition for the review and cancellation of a patent on the grounds that the invention lacks novelty or nonobviousness in light of "patents or printed publications" existing at the time of the patent application. §311.

         Second, the "post-grant review" provision permits "a person who is not the owner of a patent" to petition for review and cancellation of a patent on any ground of patentability. §321; see §§282(b)(2), (b)(3). Such proceedings must be brought within nine months of the patent's issuance. §321.

         Third, the "covered-business-method review" (CBM review) provision provides for changes to a patent that claims a method for performing data processing or other operations used in the practice or management of a financial product or service. AIA §§ 18(a)(1), (d)(1), 125 Stat. 329, note following 35 U.S.C. §321, p. 1442. CBM review tracks the "standards and procedures of post-grant review with two notable exceptions: CBM review is not limited to the nine months following issuance of a patent, and "[a] person" may file for CBM review only as a defense against a charge or suit for infringement. § 18(a)(1)(B), 125 Stat. 330.[1]

         The AIA's three post-issuance review proceedings are adjudicatory in nature. Review is conducted by a three-member panel of the Patent Trial and Appeal Board, 35 U.S.C. §6(c), and the patent owner and challenger may seek discovery, file affidavits and other written memoranda, and request an oral hearing, see §§316, 326; AIA § 18(a)(1), 125 Stat. 329; Oil States Energy Services, LLC v. Greene's Energy Group, LLC, 584 U.S.__, __-__ (2018)(slip op., at 3-4). The petitioner has the burden of proving unpatentability by a preponderance of the evidence. §§282, 316(e), 326(e). The Board then either confirms the patent claims or cancels some or all of the claims. §§318(b), 328(b). Any party "dissatisfied" with the Board's final decision may seek judicial review in the Court of Appeals for the Federal Circuit, §§319, 329; see § 141(c), and the Director of the Patent Office may intervene, §143.

         In sum, in the post-AIA world, a patent can be reexamined either in federal court during a defense to an infringement action, in an ex parte reexamination by the Patent Office, or in the suite of three post-issuance review proceedings before the Patent Trial and Appeal Board. The central question in this case is whether the Federal ...

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