U.S. Postal Service patent dispute heads to Supreme Court

[October 27, 2018]    By Andrew Chung

(Reuters) - The U.S. Supreme Court on Friday agreed to take up a dispute involving a small Alabama company that accused the U.S. Postal Service of infringing its patented mail processing system and improperly convincing a federal tribunal to cancel the patent.

The justices will hear an appeal by Return Mail, Inc of a lower court ruling that upheld the U.S. Patent and Trademark Office tribunal's 2015 determination that the company's patent covering a system for processing undeliverable mail was invalid.

Return Mail argued that since the Postal Service, a self-supporting independent federal agency, cannot be sued in the same way as private companies it should not be eligible to ask the patent office to review a patent's validity like private companies can. The Trump administration, backing the Postal Service, asked the Supreme Court not to hear the case.

The case began in 2011 when Return Mail sued the U.S. government, accusing the Postal Service of stealing its technology after the company had tried to license its system but the agency instead developed its own.

The Postal Service challenged the patent's validity at the patent office's Patent Trial and Appeal Board. The board's patent review processes have become especially popular with high-technology companies that are frequent targets of patent lawsuits and have led to a high rate of patent cancellation.

The U.S. Court of Appeals for the Federal Circuit last year upheld the board's decision to invalidate a key part of Return Mail's patent.

Rulings by the board can prevent further challenges to a patent's validity in a federal district court, where infringement lawsuits are typically resolved. But the same constraints are not applied to the federal government when it is accused. Return Mail argued that this means the government should not be allowed to launch challenges before the board.

(Reporting by Andrew Chung; Editing by Will Dunham)

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