Thursday, August 31 2017

Divided Fed. Cir. Panel Holds Government Has Standing for CBM Review

by James Watson

In Return Mail, Inc. v. U.S. Postal Serv., No. 2016-1502, 2017 U.S. App. LEXIS 16364 (Fed. Cir. Aug. 28, 2017), the Federal Circuit considered whether the government has standing to request covered business method patent review.

Return Mail had argued that the government did not have standing to request review in the first place because the statute requires requesters to be a “person” and the estoppel arising from CBM review would not apply to the government. The Court first addressed its own ability to analyze the Postal Service’s standing, which it had to clear up because the law states that decisions to institute CBM review are unreviewable. It concluded that standing is a threshold requirement separate from the decision to institute, which it was empowered to review because the statute requires requesters of CBM review to “have some stake in the outcome” because the challenged patent has been asserted against them.

The Court then held that the government was a “person” entitled to request CBM review, notwithstanding the general understanding that the term “person” does not apply to the state. It reasoned that the parties had waived this argument by not raising it. The majority also stated that Congress would have expressly excluded the government if it had intended to do so, and it was not the judiciary’s job to rewrite the statute to exclude the government. The Court also held that the government satisfied the requirement that it had been sued for infringement. The government is generally immune from lawsuits by its citizens unless it has waived immunity, and the waiver with respect to patents does not call government use of patented technology “infringement.” The Court ruled that a common-sense understanding of the assertion of a patent under the government’s waiver of sovereign immunity is that it is a claim of infringement.

Return Mail also argued that the Postal Service did not have standing because the estoppel provisions only apply to certain venues, and the only court where the federal government can be sued for patent infringement, the Court of Claims, is excluded from the list. The Court held that the estoppel was not a quid pro quo for CBM review, and the absence of its applicability to the Postal Service did not prevent the government from requesting review. As a result, the Court also upheld the Patent Trial and Appeal Board’s finding in that claims involving processing undeliverable mail items due to an inaccurate or obsolete address for the intended recipient were directed to an abstract idea.

Judge Newman penned a dissent, arguing that the government did not have standing to request CBM review because it was not a “person” within the meaning of the statute and would be excluded from the estoppel provisions associated with CBM review.

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