On June 10, 2019, the U.S. Supreme Court held that the U.S. government cannot challenge the validity of a U.S. patent in any AIA review proceeding (inter partes review, post-grant review, or covered business method review). The Court rendered its 6-3 decision in Return Mail, Inc. v. United States Postal Service, No. 17-1594, with the majority determining that the U.S. government does not qualify as a "person" under either 35 U.S.C. § 311 (inter partes review) or 35 U.S.C. § 321 (post-grant review and covered business method review). Although the U.S. government has only initiated a few AIA review proceedings since they first became available in 2013, stakeholders with technology likely to be of interest to U.S. government agencies may welcome this decision as protecting their patents from U.S. government-initiated AIA review proceedings.

Justice Sotomayor wrote the opinion for the majority, which found that the U.S. Postal Service had not overcome "the longstanding interpretive presumption that 'person' does not include the sovereign." Slip op. at 7. Justice Sotomayor addressed and refuted three arguments put forth by the Postal Service: (i) "that the statutory text and context offer sufficient evidence that the Government is a 'person';" (ii) "that federal agencies' long history of participation in the patent system suggests that Congress intended for the Government to participate in AIA review proceedings;" and (iii) "that the statute must permit it to petition for AIA review because §1498 subjects the Government to liability for infringement." Slip op. at 9. 

As to the first argument, the majority noted that the Patent Act is inconsistent as to whether "person" includes the U.S. government, with some provisions plainly including the U.S. government in "person," some plainly excluding it, and some being ambiguous. As to the second argument, the majority determined that the USPTO's treatment of the U.S. government as a "person" who may request ex parte reexamination of a patent does not answer the question whether Congress intended the U.S. government to be able to initiate "a full-blown adversarial proceeding" at the USPTO. Slip op. at 14. As to the third argument, the majority noted that the U.S. government can challenge the validity of a patent in any infringement litigation brought against it, and that the U.S. government's limited liability for patent infringement protects it from the risks of injunction, jury trials, and punitive damages "available in infringement suits against nongovernmental actors." Slip op. at 16.

Justice Breyer authored a dissenting opinion that was joined by Justice Ginsburg and Justice Kagan. The thrust of Justice Breyer's dissent is that there is "no good answer" as to "why Congress would have wanted to deny Government agencies the ability to invoke the speedier administrative procedures established by the America Invents Act." Slip op. at 8. Addressing the "interpretive presumption" relied on by the majority, Justice Breyer cited "other related patent provisions" where "person" includes the U.S. government as "strongly suggest[ing]" that the U.S. government qualifies as a "person" who can initiate an AIA review proceeding. Justice Breyer also found the legislative purposes of the AIA—to "improve the quality of patents" and "make the patent system more efficient" by making it easier to challenge "questionable patents"—to support congressional intent to permit the U.S. government to initiate AIA review proceedings. Responding to the majority's discussion of the limitations on the U.S. government's liability for patent infringement, Justice Breyer cited specific cases where actual or threatened patent infringement litigation "threatened to interfere with" government initiatives, "even absent the threat of injunctive relief."  

Despite Justice Breyer's examples of cases where the U.S. government might have wanted to challenge patents to avoid patent infringement, this Supreme Court decision may turn out to be more interesting than impactful. U.S. government agencies have only initiated 16 AIA review proceedings since they first became available in 2013, and even those appear to be grouped into only five separate disputes. Nevertheless, stakeholders with technology likely to be of interest to U.S. government agencies may welcome this decision as protecting their patent from U.S. government-initiated AIA review proceedings.

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