Federal Agencies Have Standing to File CBM

In Return Mail, Inc. v. USPS, 16-1502, the Federal Circuit ruled that the United States Postal Service had standing to challenge Return Mail’s patent claims in a Covered Business Method proceeding (CBM), despite not being sued for patent infringement under the Patent Act.  Under 37 CFR 42.302, a petitioner may not file to institute covered business method review, unless the petitioner, real party in interest, or a privy of the petitioner has been sued for infringement of the patent or has been charged with infringement under the patent.  Being “charged with infringement” is defined as a real and substantial controversy regarding infringement, such that the petitioner would have standing to bring a declaratory judgment action.
Return Mail sued the USPS under 28 U.S.C. § 1498(a), a provision providing a cause of action against the federal government when a patented invention is used or manufactured by or for the United States without a license or right do so.  The Federal Circuit ruled that the claim under 28 U.S.C. § 1498(a) qualified as a suit for infringement for purposes of standing.  The opinion noted that infringement is a prerequisite to § 1498(a) liability.
The CBM raised other concerns regarding estoppel, since the current CBM estoppel provision only applies to petitioners litigating in district court or the ITC, not the United States Court of Federal Claims, where a claim under § 1498(a) is litigated.  However, the Federal Circuit indicated that this concern should be addressed by Congress, not the courts.
On review, the Patent Trial and Appeal Board found Return Mail’s claims covering methods of processing undeliverable mail items to be patent-ineligible.