Docket No. 2016-1502 (CBM2014-00116)
PROST, NEWMAN (D), WALLACH
August 28, 2017
Brief summary: Board decision that USPS had standing to pursue CBM challenge and finding certain claims patent ineligible under § 101 affirmed.
Summary: Return Mail (RM) appealed PTAB decision after Covered Business Method (CBM; “a ‘transitional’ program, currently scheduled to sunset in September 2020”) review of RM’s US 6,826,548 directed to the processing of mail that is undeliverable due to an inaccurate or obsolete address by “encoding useful information…on mail items in the form of a two-dimensional barcode.” CBM reviews are available for 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 servicec’ with the exception of ‘technological inventions’” (AIA § 18(d)(1)) and “employ[s] the standards and procedures of a [PGR]” (“[a] ‘quick and cost effective alternative’ to litigation in the court” (PPC Broadband, FC 2016)). The ‘548 patent previously underwent reexamination, resulting in the cancellation of all original claims and issuance of new claims. After RM tried unsuccessfully to license the ‘548 patent to USPS, it filed suit in the Claims Court under § 1498(a) (“[t]he government remains immune from suit under the Patent Act” but “§ 1498(a) provides that liability attaches when the government acts ‘without license…or lawful right’”) and then the USPS filed for CMB review, raising arguments under § 101, 102, and 103. RM countered with patentability arguments but also argued USPS lacked standing. The PTAB found USPS had standing “because it had been sued for infringement within the meaning of AIA § 18” (unlike an IPR where a party “need not have a concrete stake in the outcome” (Cuozzo, US 2016)), and found the claims to be ineligible under § 101. Unlike a final written decision, the PTAB’s decision of whether to institute CBM review is not appealable (§ 324(e) and 329). The FC panel found, however, that “judicial review remains available on questions of ‘whether the [Board] exceeded statutory limits on its authority to invalidate’” (Versata, FC 2015), which includes determining whether “a party satisfies § 18(a)(1)(B)’s requirements to petition for CMB review.” It considered the PTAB’s decision on this point de novo. The FC panel considered whether the USPS infringed as required to have CBM standing (i.e., does “the absence of the word ‘infringement’ from § 1498(a)…carr[y] dispostive weight”? (RM argued it does)), and concluded “being sued under § 1498(a) is broad enough to encompass being sued for ‘infringement’” (“nothing in the text of § 18(a)(1)(b) indicates an intent to restrict ‘infringement’ to suits that fall under the Patent Act”). Thus, it concluded, USPS had standing as it was “charged with infringement”. The FC panel considered the § 101 issue using the two-step Alice framework (1) is more than just an abstract idea claimed? 2) specific improvement to technology?), and “agree[d] with the Board that claims 42-44 are directed to the abstract idea of ‘relaying mailing address data’” (“processes that can, and have been, performed in the human mind” (“[L]imit[ing] the abstract idea to a particular environment…does not make the claims any less abstract” (In re TLI, FC 2016; Enfish, FC 2016)), without any “specific improvement in the area of returned-mail processing” (Alice step two (like Ultramercial, FC 2014; unlike BASCOM (FC 2016) and DDR Holdings (FC 2014)). The FC panel also explained that “claims that are otherwise directed to patent-ineligible subject matter cannot be saved by arguing the absence of complete preemption” (Synopsys, FC 2016). Thus, the Board decision was affirmed. Judge Newman’s dissent argued that the USPS is not “within the definition of ‘person’ in § 18(a)(1)(B)”.