Supreme Court Rules Government Not A ‘Person’ For PTAB Proceedings

Maier & Maier

Under the 2012 America Invents Act (“AIA”), Congress created three new post-issuances avenues for a “person” to challenge patents before the Patent Trial and Appeal Board (PTAB) in IPR’s, PGR’s, and CBM’s. With this ruling, the Supreme Court has deemed that the Federal Government is not a “person” for these purposes and thus is ineligible to institute these AIA proceedings.

The issue was decided in Return Mail, Inc. v. Postal Service, et al., where Return Mail, Inc. held a patent for a method of processing undeliverable mail, which it asserted against the Postal Service in 2006. After filing for an ultimately unsuccessful ex parte reexamination of the subject patent, the Postal Service brought its challenge before the PTAB to seek CBM review. The Board then instituted review and ultimately found the patent covered ineligible subject matter, which was reviewed and upheld in the Federal Circuit along with the holding that the Postal Service was a ‘person’ for PTAB proceedings, before being overruled by the Supreme court here.

The Decision

The decision was written by Justice Sotomayor, with Roberts, Thomas, Alito, Gorsuch, and Kavanaugh joining. The Court explained that “In the absence of an express statutory definition, the Court applies a ‘longstanding interpretative presumption that ‘person’ does not include the sovereign.”[1] The Court then cites to the fact that the AIA defines person to “include[] corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals,” which notably does not include the Government.[2]

On the other hand, the AIA uses the term person in various forms in the statute and that some of those uses do, in fact, include the government. One example comes from where the statute provides “States ‘shall not be immune . . . from suit in Federal court by any person, including any governmental or nongovernmental entity””.[3] Based on the expressed inclusion of the government for the use of person in this instance, the Court explained this use would include the government.

However, the strength of the presumption could not be overcome by mixed use because those other uses contained additional context which indicated that the government was intended to be included in those other instances. Without any evidence that congress had intended to grant the Government the ability to initiate post-issuance proceedings under the AIA, the Court was unwilling to expand the meaning of the term across the entirety of the statute.

The court also found unpersuasive references to the MPEP where the Government was included as a person for the purposes of filing for ex parte reexamination (as they had here before the CBM filing). Because these proceedings differ significantly in the involvement of parties compared to AIA proceedings, the Court deemed that congress could very well have had reasons for distinguishing the ability to file between non-governmental ‘persons’ and the Government.

The Dissent

The dissent, drafted by Justice Breyer and joined by Ginsburg and Kagan, found the context of the AIA as a whole to be persuasive enough to indicate that Congress intended for the Government to be able to challenge invalidity at the PTAB. The dissenting opinion cited the AIA aims of improving the quality of patents, making it easier to challenge questionable patents, providing rights to those being sued for infringement, among the persuasive factors in its viewpoint.

With the holding, the Court has strengthened the position of Patent Owners at the PTAB, giving them an avenue to avoid further review at a time when they have notably lost the ability to do so with sovereign immunity based on recent Federal Circuit decisions in both Saint Regis and Regents of the University of Minnesota.

[1] Return Mail, Inc. v. Postal Service, et al., 587 U. S. ____, Slip. Op. at 6-7, (2019).

[2] Return Mail, Inc. v. Postal Service, et al., 587 U. S. ____, Slip. Op. at 7, (2019).

[3] Return Mail, Inc. v. Postal Service, et al., 587 U. S. ____, Slip. Op. at 10 n. 3, (2019).


USPTO Announces First Ever Fee Increases Under the AIA

Timothy Maier

On October 3, 2016, the United States Patent and Trademark Office (USPTO) issued a notice of proposed rulemaking (NPRM) to set or increase certain patent fees. The goal of this directive is to cover funding shortfalls, or specifically to “recover the estimated costs of the patent operation and USPTO administrative fees that support patent operations.” A full disclosure of the NPRM, as well as several summaries, can be found here. Public comments on the notice are due by December 2, 2016.

It appears that a major reason for these fee increases is to cover the costs of Patent Trial and Appeal Board (PTAB) operations. The USPTO reports that the current ex parte appeals fees cover only around 58% of the cost per appeal, and that the PTAB is insufficiently staffed to deal with both the appeals backlog and the AIA review proceedings that come before it. The USPTO expects that increasing the fees that it takes in will allow the PTAB to hire more judges and reduce the appeals backlog.

The proposal includes the following fee increases:

  • The current large entity fee rates for utility applications will be increased by approximately 6%. This extends to utility filing fees, search fees, examination fees, and issue fees for large entities. Maintenance fees are proposed to remain unchanged.
  • Excess claim fees will be increased, with the fee for claims in excess of 20 being increased by the most significant amount (25%, to $100 per claim). However, the USPTO is considering offering refunds for claims canceled in response to a restriction requirement, if the initial number of claims was over 20.
  • The large entity fee for filing an information disclosure statement is increased by 33%.
  • RCE and appeal fees are each increased, with RCE fees being increased by approximately 10% and appeal fees being increased by approximately 25%.
  • The current large entity fee rates for design applications will be increased by approximately 33%. This extends to design filing fees, search fees, examination fees, and issue fees for large entities.
  • Inter partes review fees will be increased significantly, going from $23,000 to $30,500 (the combined total for petition and institution). Likewise, the fees associated with other post-grant proceedings (post-grant review and covered business method patent review) will also be increased, from $30,000 to $38,000.

The USPTO has also proposed imposing fees on the following:

  • Very large genetic sequence submissions. The USPTO is proposing to impose fees aimed at dissuading applicants from submitting unnecessary large sequence listings that put undue burden on the Office’s information systems. Sequences of over 300MB will be subject to a $1000 fee, and sequences of over 800MB will be subject to a $10000 fee.
  • A late fee will be imposed for sequence listings in international applications.
  • A number of OED fees will be created for practitioners seeking reinstatement.
  • A number of service fees will be created for various services performed by the USPTO. For example, a fee will be created for bulk weekly downloading of patent grants and applications.

Finally, the USPTO has proposed reducing or eliminating fees on the following:

  • The transmittal fee for international design applications under the Hague Agreement will be reset for small and micro entities. The fee rate for large entities will remain the same ($120).
  • A new “streamlined reexamination” process, having a fee of half the existing rate for a request for reexamination (that is, $6000 instead of $12000) will be created.
  • Several disused service fees have been eliminated.