CAFC says the U.S. may file a CBM proceeding


The United States Court of Appeals for the Federal Circuit recently issued a decision in Return Mail, Inc. v. United States Postal Service, which upheld the invalidity of all challenged claims in a covered business method (CBM) challenge decided by the Patent Trial and Appeal Board (PTAB). In the CBM proceeding, the PTAB panel found the claims to be directed to patent ineligible subject matter under 35 U.S.C. § 101.

That patent claims were found to be directed to patent ineligible subject matter in a CBM proceeding is hardly newsworthy. No patent that has entered CBM has done anything other than fall to date. What is newsworthy, however, is that the Federal Circuit also upheld a controversial ruling of the PTAB, which determined that the United States has standing to bring a CBM challenge. Legally speaking, the United States, or in this case the United States Postal Service, is considered a person within the meaning of AIA § 18(a)(1)(B).

To put this into perspective, despite the fact that the America Invents Act (AIA) does not specifically identify the United States as qualifying to be considered a person under AIA § 18(a)(1)(B), and despite the fact that the United States Supreme Court has unequivocally ruled that a sovereign such as the United States government is not a person absent an explicit statement of intent by Congress, the Federal Circuit (over a convincing and persuasive dissent from Judge Newman) decided that the United States federal government can challenge patents issued by the United States federal government in a post grant CBM proceeding. See Federal Circuit says U.S. government is a ‘person’.

With respect to the key issue, whether the United States qualifies as a person under the meaning of AIA § 18(a)(1)(B), the majority noted that neither party argued that the word was relevant, although Judge Newman in dissent found the word to be extremely relevant. Still, Chief Judge Prost and Judge Wallach were unconvinced. The majority attempted to criticize Judge Newman’s rationale, but seemed largely unpersuasive. According to the majority, when defining the term “person,” there are no hard and fast rules, and context matters. Apparently, the majority sees somewhere in the AIA an intent of Congress to allow the United States to either quality as a person or the intent that the United States would be allowed to be a party capable of bringing challenges to issued patents. Indeed, although the majority says the AIA does not exclude the government from being a person, all the majority provides for support is citation to other sections that authorize any person not the owner to challenge a patent in an inter partes review (IPR).

“We believe the better reading of ‘person’ in § 18(a)(1)(B) does not exclude the government,” Prost concluded.

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