Return Mail, Inc. v. United States Postal Service
868 F.3d 1350
Fed. Cir.
2017

Background

  • Return Mail owns U.S. Patent No. 6,826,548, directed to using encoded data (e.g., 2D barcodes) on mail to automate processing of undeliverable mail and provide corrected-address information to senders.
  • Return Mail sued the United States in the Court of Federal Claims under 28 U.S.C. § 1498(a) alleging the Postal Service used the patented invention without license.
  • The Postal Service petitioned the PTO for a Covered Business Method (CBM) review of claims 39–44 of the ’548 patent, arguing among other grounds that claims were § 101 ineligible.
  • Return Mail challenged the Postal Service’s statutory ability to petition for CBM review (arguing the government is not a qualifying “person”/was not “sued for infringement”), and also appealed the Board’s holding that claims 42–44 are § 101 ineligible.
  • The PTAB instituted CBM review, found the Postal Service had standing because the § 1498(a) suit qualified as being “sued for infringement,” and issued a final written decision holding the challenged claims ineligible under § 101. The Federal Circuit affirmed.

Issues

Issue Plaintiff's Argument (Return Mail) Defendant's Argument (Postal Service) Held
Whether § 324(e) (no-appeal of institution) bars review of the Board’s standing/authority to institute CBM review Institution decisions are final and nonappealable; court should not review § 324(e) does not bar review of statutory-limit/jurisdictional questions § 324(e) does not bar judicial review where the Board exceeded statutory limits on its authority
Whether a § 1498(a) suit means the government was “sued for infringement” under AIA § 18(a)(1)(B) § 1498(a) is an eminent-domain/unique remedy and is not an infringement suit under the Patent Act; thus government should be excluded Ordinary meaning of “infringement” covers acts that interfere with patent rights; § 1498(a) claims entail direct-infringement-type liability and therefore qualify Being sued under § 1498(a) is broad enough to constitute being “sued for infringement” under § 18(a)(1)(B)
Whether the word “person” in § 18(a)(1)(B) excludes the United States and its agencies (Main dissent) Ordinary usage excludes the sovereign; statutes using “person” ordinarily do not include the United States; omission of Claims Court from listed estoppel venues shows congressional intent to exclude government Majority: context, statutory scheme, and lack of express exclusion do not support reading “person” to exclude the government; Congress knew of § 1498 suits and could have limited the term but did not Majority: “person” includes the government for purposes of § 18(a)(1)(B); dissent would read exclusion and would vacate PTAB action
Whether claims 42–44 of the ’548 patent are patent-eligible under 35 U.S.C. § 101 Claim elements encoding/decoding address preferences and electronically returning corrected-address data improve mail-processing technology and do not merely recite an abstract idea Claims recite the abstract idea of relaying mailing-address data implemented with conventional computer/barcode technology; no inventive concept Claims 42–44 are directed to an abstract idea and lack an inventive concept under Alice; they are § 101 ineligible

Key Cases Cited

  • Diamond v. Diehr, 450 U.S. 175 (1981) (establishes that laws of nature, natural phenomena, and abstract ideas are not patentable subject matter)
  • Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66 (2012) (framework for § 101 step-two inventive-concept inquiry)
  • Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) (two-step § 101 test for abstract ideas)
  • Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) (interpreting IPR no-appeal provision and presumption of judicial review limits)
  • Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015) (judicial review available when Board exceeds statutory limits; interpretation of CBM regime)
  • GTNX, Inc. v. INTTRA, Inc., 789 F.3d 1309 (Fed. Cir. 2015) (distinguishing institution-stage determinations from final written decisions)
  • Zoltek Corp. v. United States, 672 F.3d 1309 (Fed. Cir. 2012) (discussing § 1498(a) as waiver of sovereign immunity for governmental direct-infringement-like liability)
  • Content Extraction & Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343 (Fed. Cir. 2014) (data-collection/recognition claims held abstract under step 1)
  • FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089 (Fed. Cir. 2016) (business-method claims using conventional computer functions held abstract)
  • OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015) (using a computer to perform routine tasks insufficient for § 101 eligibility)
  • Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (claims improving computer functionality can be § 101 eligible)
  • BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) (software arrangement providing technical improvements can supply an inventive concept)
  • DDR Holdings, LLC v. Hotels.com, LP, 773 F.3d 1245 (Fed. Cir. 2014) (specific computer-based solutions to a problem of the Internet held § 101 eligible)
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