The newest members of the Supreme Court continued to assert themselves in patent cases Tuesday, but it wasn’t clear whether their views will garner a majority in Return Mail v. U.S. Postal Service.
The question in Return Mail is whether the government is a “person” within the meaning of the America Invents Act (AIA), and can therefore attack the validity of patents in covered business method review proceedings at the U.S. Patent and Trademark Office.
“You’ve said the context [of the AIA] supports you,” Justice Brett Kavanaugh told Deputy Solicitor General Malcolm Stewart. “But there are contextual points that seem to cut the other way.”
In particular, Kavanaugh noted that the America Invents Act estops petitioners from raising the same arguments made at the PTO in subsequent district court or International Trade Commission litigation. But the AIA makes no mention of estoppel at the Court of Federal Claims, which is where the government defends patent litigation. That would indicate Congress wasn’t imagining the government as an AIA petitioner, he suggested.
Justice Neil Gorsuch said the estoppel point becomes “just even a little odder still” when an executive branch agency would be acting as both a petitioner and the decision maker in the PTO proceedings. “Isn’t it a little unseemly to say that the executive branch shouldn’t be bound by its own decisions?” Gorsuch asked.
Gorsuch has already penned a majority opinion and two dissents in patent cases, while Kavanaugh was an active questioner in this term’s only other patent dispute.
It was by no means clear that their views would prevail. Chief Justice John Roberts and Justice Samuel Alito both suggested it was a “fiction” that Congress considered the implications of using the word “person” when crafting the AIA. And Justices Stephen Breyer and Ruth Bader Ginsburg, in her return from an illness, noted that the overarching purpose of the law was to remove invalid patents from the system.
“Why would Congress want to leave a government agency out of this second look if the idea is to weed out patents that never should been given in the first place?” Ginsburg asked Covington & Burling partner Beth Brinkmann, representing patent owner Return Mail Inc.
“Because the government already has opportunities” to remove patents via the ex parte re-examination process and in Court of Federal Claims proceedings, Brinkmann said.
The AIA states that “a person who is not the owner of patent” may petition for inter partes review (IPR) of a patent, and any person sued for infringement may petition for covered business method (CBM) review. Both are administrative procedures for reconsidering patent validity at the PTO.
Corporations are generally understood to be “persons” under the law. In a dissenting opinion at the Federal Circuit, Judge Pauline Newman argued that under Supreme Court precedent, “person” should be presumed to exclude the United States and its agencies.
Brinkmann made that same case Tuesday at the Supreme Court. She argued that the government can still challenge patent validity by asking the PTO director to exercise his discretion to launch an ex parte re-examination.
That part of her argument didn’t sit well with the chief justice. “What is the director of the PTO supposed to do when he gets one of these calls from the government [saying] we want you to re-examine this?” he asked. “Is he or she supposed to make an independent determination, or is he or she supposed to salute and go ahead and do it?”
Alito questioned whether the court should indulge “the possible fiction that Congress actually gave a second of thought to the issue that’s before us” when it used the word person.
Justice Elena Kagan echoed his concern. “Does anybody really think Congress thinks about this as a default rule and legislates against it?” she said. “And if not, shouldn’t we just do what strikes us as the thing Congress would have wanted done?”
If the answer to Kagan’s question turns out to be yes, it will have implications well beyond the Return Mail case, said Holwell Shuster & Goldberg counsel Karen Sebaski, a lawyer who has been following the case who reviewed Tuesday’s transcript. “I do think the court signaled it could be ready to revisit the relative strength of the default rule,” she said. “The court signaled a desire to focus on real-world implications” when construing “person.”
She described the questioning as tough on both sides, with the court trying to discern any reason for treating the government differently on one hand. “And then on the other hand, I think they’re likely to focus on the implication of having a different estoppel rule for the government than for private parties.”
Ropes & Gray partner Matthew Rizzolo, who has also been following the case, said he wasn’t surprised to see Kavanaugh—who’s written about intra-executive conflicts before—and Gorsuch lead the charge on behalf of Return Mail. If Return Mail and the estoppel argument prevail, he expects Kavanaugh to have his first majority opinion in a patent case.
“Personally, that’s an argument I’ve always found pretty persuasive,” he said. “It’s something pretty tangible.”