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TAKEAWAY: The Supreme Court held that the Government is not a “person” capable of instituting the three post-issuance review proceedings under the America Invents Act (AIA).

In a 6-3 decision on June 10, 2019, the U.S. Supreme Court ruled that the Government is not eligible to challenge patents under any of the three AIA post-issuance review proceedings. Under the AIA, only a “person” other than the patent owner may petition the U.S. Patent and Trademark Office (USPTO) to institute inter partes review (IPR), post-grant review (PGR), or covered business method (CBM) review of an issued patent.

In Return Mail, Inc. v. United States Postal Service, 587 U.S. (2019), Return Mail sued the U.S. Postal Service for infringing its patent related to a method for processing undeliverable mail. While the lawsuit was pending, the Postal Service petitioned for CBM review proceedings to invalidate the patent. The Supreme Court granted certiorari to determine whether a federal agency is a “person” capable of petitioning for post-issuance review under the AIA.

In the majority opinion, the Court highlighted the longstanding presumption that the Government is not a “person” absent an affirmative showing to the contrary. The Court reasoned that, while the AIA sometimes includes or excludes the Government as a “person,” the mere existence of Government-inclusive references does not make the affirmative showing required. Further, the mere ability of federal officers to obtain patents, or for federal agencies to petition for ex parte reexamination, does not speak to whether Congress intended for the Government to participate as a third-party challenger in AIA proceedings. The Court noted that ex parte reexamination is fundamentally different from AIA post-issuance review proceedings.

The Postal Service argued that denying the Government the ability to use AIA review to challenge patent validity was inconsistent with the rights afforded to other potential infringers. The Court found that, since federal agencies face lower risk in patent liability, it was reasonable for Congress to have treated them differently. The Government also has other defenses to patent infringement. Lastly, excluding federal agencies from AIA review proceedings 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 the USPTO, a different federal agency.

Private parties and government actors alike may need to reassess strategy of their patent portfolios in view of this decision. While federal agencies cannot seek IPR, PGR, or CBM review in the USPTO, ex parte reexamination remains an option for the Government to challenge issued patents.