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Covington Wins Supreme Court Patent Dispute for Return Mail

June 10, 2019

WASHINGTONCovington won a precedent-setting dispute before the U.S. Supreme Court on behalf of Return Mail, Inc. in a case that attracted significant attention in the patent field, particularly within industries that involve competition or collaboration with the federal government. The 6-3 ruling concludes a pivotal chapter in Return Mail’s 15-year, multi-forum fight to enforce its patent rights against the government, while defending against the U.S. Postal Service's attempt to invalidate its patent through an administrative proceeding at the U.S. Patent and Trademark Office.

During arguments earlier this year, the Court was asked to decide whether a federal agency is a “person" authorized to petition the Patent Trial and Appeal Board (PTAB) to invalidate a privately owned patent using the proceedings created by the America Invents Act (AIA) of 2011 —inter partes review, post-grant review, and covered business method review. In its decision, the Court held that the government is not a “person” capable of instituting the three AIA review proceedings.

“The Court’s decision confirms that federal agencies do not get an extra chance to challenge privately held patents under the AIA,” said Beth Brinkmann, co-chair of Covington’s Appellate and Supreme Court Litigation Group, who argued the case before the Supreme Court.

The fight centers around Return Mail’s patent for a system that handles undeliverable mail. In 2006, after the Postal Service had engaged in years of discussions about licensing Return Mail’s invention, the Postal Service released its own product covered by Return Mail’s patent. In 2011, the Patent Office issued a reexamination that confirmed the validity and novelty of Return’s Mail’s patented invention and the company filed suit for compensation from the Postal Service at the Court of Federal Claims. Following a significant ruling favorable to Return Mail while the compensation action was still pending, the Postal Service attempted to seek administrative review under the AIA of Return Mail’s patent before the PTAB in 2014.

Despite Return Mail’s argument that permitting the Postal Service to seek AIA administrative review before the PTAB would undermine the structure and purpose of the AIA, the PTAB determined that the Postal Service was authorized to petition for review. The PTAB went on to conclude that although Return Mail's invention was novel and nonobvious, it was nevertheless ineligible for patenting. The Federal Circuit affirmed the decision in 2017, and the Supreme Court granted certiorari last October.

“This is a significant victory for Return Mail and for all technology companies and patent holders that may find themselves in the government’s crosshairs,” said Covington partner Richard Rainey, who co-led the Supreme Court team and handled the case before the Federal Circuit. “By excluding federal agencies from AIA review proceedings, the Court’s decision limits the government’s ability to bring duplicative challenges to the validity of privately-owned patents,” he said.

The case attracted widespread industry and academic interest, with the U.S. Chamber of Commerce, PhRMA, the Cato Institute, and others filing amicus briefs in support of Return Mail's position.

In addition to Ms. Brinkmann and Mr. Rainey, the Covington team representing Return Mail was co-led by partner Kevin King. The team also included associates Nicholas Evoy, Daniel Randolph, and Tarek Austin.

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