Return Mail, Inc. v. United States Postal Service

868 F.3d 1350, 123 U.S.P.Q. 2d (BNA) 1813, 2017 WL 3687450, 2017 U.S. App. LEXIS 16364
CourtCourt of Appeals for the Federal Circuit
DecidedAugust 28, 2017
Docket2016-1502
StatusPublished
Cited by20 cases

This text of 868 F.3d 1350 (Return Mail, Inc. v. United States Postal Service) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Return Mail, Inc. v. United States Postal Service, 868 F.3d 1350, 123 U.S.P.Q. 2d (BNA) 1813, 2017 WL 3687450, 2017 U.S. App. LEXIS 16364 (Fed. Cir. 2017).

Opinions

Dissenting opinion filed by Circuit Judge Newman.

Prost, Chief Judge.

Patent assignee Return Mail, Inc. (“Return Mail”) appeals from the final written decision of the U.S. Patent and Trademark Office’s (“PTO”) Patent Trial and Appeal Board (“Board”) in a review of a covered business method (“CBM”) patent. The Board held that the U.S. Postal Service and the United States (collectively, “the Postal Service”) were not statutorily barred from filing the underlying petition for review. On the merits, the Board determined that all of the challenged patent claims were directed to ineligible subject matter under 35 U.S.C. § 101. We affirm.

I. Background

A

In 2011, Congress enacted the Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284, which created several new quasi-adjudicatory proceedings before the PTO for determining the [1354]*1354patentability of issued patent claims. These proceedings include inter partes review (“IPR”), post-grant review (“PGR”), and review of CBM patents (“CBM review”). See 35 U.S.C. §§ 311-319 (IPR); id. §§ 321-329 (PGR); AIA § 18, Pub. L. No. 112-29, 125 Stat. 284, 329-31 (2011) (CBM review).

This appeal arises from a CBM review, which unlike IPR or PGR, is limited to CBM patents—i.e., patents “that claim[ ] a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service,” with the exception of “technological inventions.” AIA § 18(d)(1). CBM review is also a “transitional” program, currently scheduled to sunset in September 2020. AIA § 18(a)(3). It is governed by AIA § 18 and, with certain exceptions, “employ[s] the standards and procedures off] a [PGR] under [35 U.S.C. §§ 821-329].” AIA § 18(a)(1).1

CBM review proceeds in two stages. In the first stage, the PTO Director makes a threshold determination of whether to institute the proceeding, which requires a determination that “it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable” or that “the petition raises a novel or unsettled legal question that is important to other patents or patent applications.” 35 U.S.C. § 324(a), (b). This task has been delegated to the Board by regulation. 37 C.F.R. §§ 42.4(a), 42.300(a). If review is instituted, the parties then proceed to the second stage, which involves discovery, the submission of additional information, and the opportunity for an oral hearing. See, e.g., 35 U.S.C. § 326(a)(3), (5), (8), (10), (12). Absent dismissal, the proceeding culminates with the Board’s issuance of a “final written decision” regarding the pat-entability of “any patent claim challenged by the petitioner,” as well as of “any new claim added” during the proceeding. Id. § 328(a). The Board must issue its final written decision within one year after the institution of CBM review, except in narrow circumstances. Id. § 326(a)(ll). Ultimately, Congress intended CBM review, like the programs for IPR and PGR, “to provide [a] ‘quick and cost effective alter-nativef ]’ to litigation in the courts.” PPC Broadband, Inc. v. Corning Optical Commc’ns RF, LLC, 815 F.3d 734, 741 (Fed. Cir. 2016) (quoting H.R. Rep. No. 112-98, pt. 1, at 48 (2011), reprinted in 2011 U.S.C.C.A.N. 67, 78).

B

Return Mail owns U.S. Patent No. 6,826,548 (“’548 patent”), which is the subject of the underlying CBM review as well as related litigation in the U.S. Court of Federal Claims (“Claims Court”), The ’548 patent is directed to the processing of mail items that are undeliverable due to an inaccurate or obsolete address for the intended recipient. ’548 patent col. 1 11. 20-24. The patent underwent ex parte reexamination, resulting in the cancellation of all original claims and the issuance of new claims 39-63 in January 2011.2 Ex Parte Reexamination Certificate 6,826,548 Cl.

According to its specification, “[t]he processing of mail that is returned to sender historically has been a time-consuming labor-intensive process for high volume mail users.” ’548 patent col. 1 11. 39-42. For instance, “[e]ven with the availability of address updating services to aid in researching for the correct address,” the [1355]*1355process of handling returned mail “[wa]s substantially a manual one subject to human error and delays.” Id. at col. 111. 39-51.

The claimed invention of the ’548 patent purportedly “overcomes the historical problems with prior art manual handling” and “does so quickly, more accurately, and at substantially less cost.” Id. at col. 1 11. 55-59. It teaches encoding useful information, such as the name and address of intended recipients, on mail items in the form of a two-dimensional barcode. Id. at col. 2 11. 4-5, col. 2 1. 66-col. 3 1. 15. Undeliverable mail items are returned to a processing location, where the barcodes are scanned. Id. at col. 2 11.14-20, col. 3 11. 15-51. The scanned information is then processed, such as by obtaining corresponding updated address data from a computer or database, and the updated information is then electronically provided to the sender to be used as the sender deems appropriate. Id, at col. 2 11. 19-27, col. 3 1. 52-col. 4 1. 33. In other words, the claimed invention allows returned mail to be processed “virtually entirely automatically through the exchange of data files between computers.” Id. at col. 6 11. 61-64.

C

In February 2011, after trying unsuccessfully to license the ’548 patent to the Postal Service, Return Mail filed suit in the Claims Court against the United States. It alleged under 28 U.S.C. § 1498(a) that the United States, through the Postal Service’s actions, had “engage[d] in the unlicensed and unlawful use and infringement of the invention claimed in the ’548 patent.”3 J.A. 3302. Return Mail sought relief in the form of “reasonable and entire compensation.” J.A. 3297.

In April 2014, the Postal Service filed a petition with the PTO for CBM review of claims 39-44 (the “challenged claims”) of the reexamined ’548 patent. It raised several grounds for unpatentability, including patent-ineligible subject matter under § 101, anticipation under § 102, and obviousness under § 103.

In response, Return Mail not only raised patentability arguments but also contested the Postal Service’s ability under the AIA to petition for CBM review. The Board held that the Postal Service had statutory “standing” and instituted review of all of the challenged claims under § 101 for ineligible subject matter.4

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868 F.3d 1350, 123 U.S.P.Q. 2d (BNA) 1813, 2017 WL 3687450, 2017 U.S. App. LEXIS 16364, Counsel Stack Legal Research, https://law.counselstack.com/opinion/return-mail-inc-v-united-states-postal-service-cafc-2017.