On February 19, the U.S. Supreme Courtroom heard oral arguments in Return Mail Inc. v. United States Postal Service—considered one of two IP instances the Courtroom heard that week. The courtroom for the Return Mail listening to was notably filled with press as a result of it was Justice Ruth Bader Ginsburg’s first listening to following a current hiatus to have nodules on her lungs eliminated.
Return Mail asks whether or not the federal authorities constitutes a “individual” for the needs of instituting publish grant assessment proceedings on the Patent Trial and Attraction Board (PTAB) underneath the Leahy-Smith America Invents Act (AIA). As reported earlier this week, the justices seemed to be dissatisfied with arguments from counsel on each side—and skeptical that Congress had any view on the difficulty to start with—however they arguably pushed again extra towards the federal government’s place.
As all the time, IPWatchdog reached out to the patent bar for his or her tackle the arguments. Just like the questioning, the predictions have been combined and reveal no clear path, however a slender holding in favor of Return Mail might be possible.
Holding Could possibly be Restricted to CBMs
Karen Sebaski, Holwell Shuster & Goldberg LLP
With respect to America Invents Act (AIA) evaluation proceedings, the Federal Circuit’s choice provides the federal government an enormous benefit over personal petitioners who, underneath the AIA, are statutorily barred from asserting in district courtroom or earlier than the Worldwide Commerce Fee challenges that have been raised or fairly might have been raised earlier than the [Patent Trial and Appeal Board] PTAB. A broad affirmance of the Federal Circuit’s choice, subsequently, might give the federal government a inexperienced mild to file many extra petitions for inter partes evaluation. Previous to the AIA, the USPS had efficiently requested ex parte reexamination of Return Mail’s patent, which resulted within the issuance of the very claims that have been earlier than the PTAB. Historic apply, subsequently, arguably favors a special outcome. Notably, in Return Mail, the USPS initiated a coated enterprise technique [CBM] assessment continuing, a short lived program beneath the AIA that may sundown subsequent yr. If the Supreme Courtroom have been to restrict its holding to CBM proceedings and never construe “individual” within the context of everlasting inter partes evaluate and submit grant evaluation proceedings underneath the AIA, or extra broadly, then the impression of Return Mail will probably be far more restricted.
The Fiction that Congress Cared
Robert Mallin, Brinks Gilson & Lione
Justice Alito offered maybe probably the most memorable (and probably most brutally candid) assertion of the day. Particularly, after quite a few questions and solutions relating to what Congress meant when it used the phrase “individual” in reference to submitting a CBMR petition pursuant to Part 18(a)(1)(B) of the AIA, Justice Alito said:
“If we indulge the attainable fiction that Congress truly gave a second of thought to the difficulty that’s earlier than us . . .. [Why would] Congress have needed to deal with the federal government in a different way from a personal get together as to those AIA proceedings? However on the opposite aspect . . . [why would] Congress have needed totally different estoppel guidelines to use to the federal government?”
Whereas Justice Alito’s remark elicited laughter, for my part, he was spot on. Neither the lawyer for Return Mail nor the federal government lawyer for the USPS might present a passable purpose why Congress would have needed to deal with the Authorities in another way from personal events with respect to AIA proceedings or AIA estoppel guidelines. Considerably, the absence of any legislative document referring to using the time period “individual” or causes for treating the federal government totally different from a personal celebration supported Justice Alito’s assertion.
On the finish of the day, the Justices didn’t appear to tip their hand and will render an opinion that adequately helps both aspect’s place as as to if Congress’s use of the phrase “individual” consists of the federal government; and may additionally contemplate the sensible results of their choice, as evidenced by Justice Kavanuagh’s ultimate query to the federal government’s lawyer: “If you weren’t to prevail right here, what can be the actual world issues for the federal government?”
A Ruling for USPS Would Be “Shocking”
Stephen Kunin, Maier & Maier
The SCOTUS justices didn’t seem to favor oral arguments in Return Mail v. USPS that wouldn’t have clear bases within the statutes. Particularly, the USPS has the heavy burden to determine that the federal authorities is an individual to be able to deliver forth an AIA trial petition. It seems that the load of the statutory regulation cuts towards the USPS. Will probably be shocking if the Courtroom finds in favor of the USPS. The justices appear very skeptical that the federal authorities can carry its burden.
A Shut Case That Might Sign Future SCOTUS Developments
Sharon A. Israel, Shook, Hardy & Bacon LLP
It’s troublesome to foretell how the Supreme Courtroom will determine the Return Mail case. The justices had robust questions for each side and the disposition of the case isn’t clear minimize. The presumption underneath the Dictionary Act that the federal government shouldn’t be an individual might prevail. The concept the federal government can be the one “individual” as an AIA petitioner who wouldn’t be topic to the estoppel provisions in federal courtroom appears anomalous, whereby personal litigants might be topic to equivalent patent challenges earlier than each the USPTO and the Courtroom of Federal Claims. Nevertheless, using the time period “individual” within the Patent Act isn’t a mannequin of readability. Finally, the influence of this case could also be small. In response to a query by Justice Kavanaugh, the Deputy Solicitor Common acknowledged that federal businesses have submitted solely 20 requests for post-issuance evaluation underneath the AIA.
It’s fascinating to notice that within the brief time since appeals from AIA trial proceedings started, the Supreme Courtroom has granted certiorari in 4 instances that contain selections from the USPTO’s Patent Trial and Attraction Board—Cuozzo Velocity Applied sciences, LLC v. Lee, SAS Institute Inc. v. Iancu, Oil States Power Providers, LLC v. Greene’s Power Group, LLC, and now the Return Mail case. The problems concerned usually relate to procedural points across the implementation of AIA trial proceedings and appeals from these proceedings. Given the continued reputation of those proceedings and the continued improvement of the legal guidelines, guidelines and laws referring to them, we should always anticipate continued evaluate from the Supreme Courtroom on this necessary subject.
Erik Oliver, Richardson Oliver
Two moments from the oral argument stood out to me. First, the lawyer for the USPS/Authorities said that “[i]n the years because the AIA was enacted, federal businesses have submitted 20 requests for all types of AIA post-issuance evaluate mixed” Transcript p 61, strains 1-5 (emphasis added). To place this in perspective, the USPTO PTAB website maintains a statistics web page and, taking a look at the newest knowledge file (via Jan 31, 2019), there have been a complete of 9,766 petitions for IPR, CBM and [post grant review] PGR mixed. Governmental requests characterize lower than 1% of all requests. Which does increase the query of why the Supreme Courtroom would have chosen to take this case? Maybe for a number of the stricter constructionist judges, certiorari was a car for tackling perceived judicial overreaches in rewriting legal guidelines? In any other case, this looks like an odd case for certiorari and argument.
A key second second for me was earlier within the argument. Return Mail’s lawyer acknowledged that: “[w]e know that ‘individual’ isn’t used persistently within the America Invents Act or within the Patent Act.” Transcript p 11, strains 10-12. Provided that Return Mail’s whole argument hinges on the right authorized which means of the time period “individual” within the statute, this appears an odd admission. Clearly, Return Mail feels the anomaly ought to resolve of their favor for the explanations of their temporary and argumentation. I’m not satisfied that Return Mail has the votes for his or her most popular end result from my scorekeeping, however I’m considering this might be an in depth case, like SAS.
A associated query is, regardless of the result on the Supreme Courtroom, what’s the long-term win line for Return Mail? The Supreme Courtroom consequence won’t put the Part 101 “genie” that invalidated Return Mail’s patent absolutely again within the bottle. The USPS now has a roadmap from each the CBM and the 2-1 Federal Circuit affirmance. If the USPS is sued, these will information the USPS’ invalidation of the patent on Part 101 grounds within the Courtroom of Federal Claims.
Given the low variety of impacted PTAB instances, I’m principally targeted on how this case may cut up the Supreme Courtroom judges on patent regulation points going ahead? My speculation post-SAS is that we’d see a larger variety of shut (e.g. 5-Four) patent-law selections. This might probably sign a continuation of that development.
Kean DeCarlo, Womble Bond Dickinson
The justices’ questions seem to point a divided courtroom. Some justices prompt that Congress couldn’t have meant to exclude the federal government from the cost-efficient advantages of post-grant evaluation, whereas different justices seemed to be troubled by the potential unfair leverage towards a personal citizen by the mixture of USPTO, appearing as a decide and jury, and one other federal company, appearing as a prosecutor. Return Mail’s suggestion that an affected federal company potential recourse if the company is just not thought-about a “individual” underneath the AIA of contacting the USPTO ex parte instantly in order that the USPTO director can provoke the executive patent evaluation was met with skepticism by a number of justices. The justices might have tipped their hand within the latter levels of the arguments, once they appeared to concentrate on the shortage of any obvious indication of congressional intent with respect to the query of whether or not or not the federal government is a “individual” underneath the AIA.
In view of the admission that federal businesses had mixed to submit solely 20 requests for post-grant assessment because the enactment of the AIA, it isn’t unreasonable for the justices of the Courtroom to depend on a presumption that the federal government just isn’t a “individual” beneath the post-grant provisions of the AIA in reaching their choice. This motion would drive Congress to amend the AIA if congressional intent was for governmental businesses to be thought-about a “individual” for these statutory post-grant provisions. Additional, such a presumption towards company “personhood” would be sure that federal businesses couldn’t get pleasure from collaborating in post-grant proceedings with out the concomitant burden of estoppel that acts as an necessary quid professional quo for the correct to take part within the proceedings by non-governmental “individuals.”
The Broader Implications
Jeffrey Ginsberg, Patterson Belknap Webb & Tyler LLP
Petitioner Return Mail argues that the federal government just isn’t a ‘individual’ and subsequently the federal government isn’t permitted to file petitions for post-issuance assessment. In response, the federal government argues that the textual content and construction of the Patent Act, the historical past of federal businesses’ participation within the patent system and Congressional intent in enacting the AIA all affirm that at federal company is a ‘individual’ who might file a petition for submit issuance evaluation. Whereas there doesn’t look like a constant definition of ‘individual’ within the Patent Act or AIA, the Supreme Courtroom’s choice on this case might have implications past the federal government’s capability to provoke post-issuance assessment proceedings together with whether or not the federal government is entitled to acquire patents, declare intervening rights, and/or cite prior artwork to the Patent Workplace.
Justin Krieger, Kilpatrick Townsend & Stockton LLP
Whether or not the Authorities is a “individual” approved to deliver an AIA continuing earlier than the Patent Trial and Attraction Board has broad-reaching implications for future company actions. The first drawback for Return Mail on this case is its lack of ability to articulate a cogent argument for why Congress would have needed to exclude the Authorities from PTAB proceedings. However, the inequity of construing the statute as allowing the Authorities to take part in such proceedings with out the potential for estoppel if the PTAB doesn’t discover in its favor helps Return Mail’s place on rules of basic equity. Conversely for the USPS, no affordable arguments could be made supporting why the Authorities must be permitted to launch a number of assaults on a challenged patent with out impunity, irritating a main objective of the AIA of offering a decrease value various to district courtroom litigation. It’s clear from this pressure that Congress merely forgot to deal with governmental businesses as attainable petitioners when it enacted the AIA.
Perception may be gleaned from the Courtroom’s dealing with of one other current choice. In Helsinn v. Teva, the Courtroom held that which means of the time period “on sale” was well-established and that the phrase “or in any other case obtainable to the general public” added by the AIA to 35 USC § 102(a)(1) was inadequate to vary that which means. Consequently, the Courtroom held that the AIA didn’t alter the which means of the on sale bar. Equally, on this case, the Dictionary Act together with many years of jurisprudence present a longtime which means for the time period “individual”—one which presumptively excludes the Authorities. This presumption, coupled with the perceived unfairness of allowing the Authorities to deliver AIA challenges with out the danger of estoppel, weighs in Return Mail’s favor. If the Courtroom so holds, search for Congress to enact a fast repair for this legislative loophole.
Bradley J. Olson, Barnes & Thornburg LLP
The Appellant’s temporary, in addition to amicus briefs filed in help, are replete with doctrinal help the place the Courtroom had no problem in holding that, until expressly offered for by way of statute, the time period “individual” excludes the federal authorities and its businesses. The higher statutory interpretation might nicely vest with Appellants, as one can figuratively simply flip a couple of pages within the patent statutes to see that Congress had no problem in excluding “individual” from what constitutes a “[f]ederal company” when it promulgated the Bayh-Dole Act codified beneath title 35 Sections 200–212. The time period “federal company” was outlined then to imply “any government company as outlined in part 105 of title 5, and the army departments as outlined by part 102 of title 5.” See 35 U.S.C. § 201(a).
The Return Mail opinion can also be remembered for the “regulation of unintended penalties” if the Courtroom holds that “individual” underneath the related AIA statutes additionally consists of “federal authorities businesses.” When such petitioner is a “federal authorities company,” such a holding for Respondent would probably eviscerate the AIA-provided statutory estoppel provisions that bar “petitioner(s)” from asserting challenges that would have been “raised or fairly might have raised” in any actions in a federal district courtroom motion or the Worldwide Commerce Fee investigation. The unique treatment for patentees difficult the unauthorized use or manufacture of a patented invention by the federal authorities is earlier than United States Courtroom of Federal Claims delimited to the restoration of “affordable and full compensation.” Congress omitted the Courtroom of Federal Claims from the AIA estoppel provisions, lending inductive help that Congress didn’t intend federal authorities businesses to be permitted to convey AIA post-issuance assessment proceedings. Pandora’s Field could also be opened if the Courtroom now holds for Respondent, as federal authorities businesses seemingly wouldn’t be barred from re-litigating invalidity arguments earlier than the Courtroom of Federal Claims that have been or might have been raised earlier than the PTAB beneath the AIA post-issuance assessment proceedings. In addition to inviting attainable disparate validity outcomes, such an interpretation would assuredly improve the workloads of each the PTAB and the Courtroom of Federal Claims.
Steve Saunders, Nutter
The result of Return Mail might have a big impression on U.S. protection contractors, as the federal government will have the ability to successfully train eminent area rights and but, not be topic to estoppel offered by the AIA. The worth of patents might probably be decreased by billions of dollars if the federal government can take away an organization’s authorized rights, which might have a chilling impact on industries servicing the federal government; notably, the protection business. Additional diminishing patent worth, if the federal government paid a low royalty, that low royalty will be the supply for future, unreasonably low injury calculations because the foundation can be what the federal government paid,” stated Steve Saunders, co-chair of Nutter’s Mental Property Division. “When the Supreme Courtroom takes up a patent case, it typically reverses the Federal Circuit, so on its face, that means that they may determine in favor of the Petitioner. Each arguments appear to have benefit, nevertheless, and neither one is a transparent winner.
The Weight of Amici Might Tip the Scale Towards Petitioners
Ryan PhalenMarshall Gerstein & Borun LLP
This case has an fascinating historical past, the place the celebration’s arguments earlier than the Federal Circuit didn’t concentrate on the importance of the time period “individual” in AIA Part 18(a)(1)(B). Nonetheless, this turned the primary query introduced in Return Mail, Inc.’s petition for writ of certiorari. The difficulty of whether or not the federal government could be a “individual” was the subject of Decide Newman’s dissent. An awesome majority of amicus curiae briefs on file, together with no less than two briefs filed by regulation professors of varied universities, help Decide Newman’s view, i.e.: as a result of the federal government is immune from lawsuits and legal responsibility for infringement, it lacks the facility that Congress has conferred upon infringers by way of the AIA to contest the validity of a patent in a coated enterprise technique continuing.
Flynt Strean, Womble Bond Dickinson
Noting that the federal government is immune from federal district courtroom and ITC patent litigation fits (the one discussion board for patent infringement claims towards the federal government being the Courtroom of Federal Claims and the AIA’s estoppel provisions don’t point out this discussion board), Petitioners argue that by contemplating the federal government a “individual” for functions of post-grant challenges provided by the AIA, the federal government has the uniquely unfair benefit of accessing the AIA’s new patent difficult instruments with out the estoppel results meant to stability them. The federal government argues that different provisions of the AIA think about the federal government an individual, that the federal government has lengthy participated within the patent system on the identical phrases as personal entities, and that the federal government is sufficiently able to figuring out invalid patents. Based mostly on a majority of amicus briefs filed with the Courtroom, nevertheless, many practitioners, patent house owners, and patent regulation professors aspect with Petitioners and think about the federal government persona non grata in terms of assessment proceedings beneath the AIA.
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