As we reported earlier today, the Federal Circuit issued its precedential opinion in Bozeman Financial LLC v. Federal Reserve Bank, holding that the “[Federal Reserve] Banks are ‘persons’ who may petition for post-issuance review under the AIA.” This holding marks the Federal Circuit’s first significant interpretation of last year’s Supreme Court opinion in Return Mail v. U.S. Postal Service.
Judge Moore wrote the opinion for the panel, which also included Judges Lourie and Dyk. In the introduction of the opinion, the court characterized the issue presented and the Federal Circuit’s holding:
On appeal, Bozeman challenges the Board’s authority to decide the petitions because it argues the Banks are not ‘persons’ under the America Invents Act (AIA). It further challenges the Board’s eligibility decisions. . . . For the reasons set forth below, we hold that the Banks are ‘persons’ who may petition for post-issuance review under the AIA. We further hold that claims 21–24 of the ’640 patent and 1–20 of the ’840 patent are ineligible under § 101. Accordingly, the Board’s decisions are affirmed.
In its analysis, the court first noted that, in Return Mail, “the Supreme Court held that federal agencies are not ‘persons’ able to seek post-issuance review of a patent under the AIA.” The court, however, distinguished Return Mail. According to the court, the “Banks were established as chartered corporate instrumentalities of the United States under the Federal Reserve Act of 1913.” Therefore, unlike the Postal Service at issue in Return Mail, “the Banks’s enabling statute does not establish them as part of an executive agency, but rather each bank is a ‘body corporate.’”
Of central importance to the Federal Circuit’s analysis was the fact that the “Banks may sue or be sued in any court of law or equity.” Thus, they face the same risk for infringement as private entities do. The Postal Service in Return Mail and other federal agencies, in contrast, may not be sued in any court of law or equity and thus “face less risk for patent infringement than do private entities.” The court said the Supreme Court in Return Mail “recognized that lessened risk as a reason for Congress to treat federal agencies differently.”
Judge Moore concluded “that the Banks are distinct from the government for purposes of the AIA,” while recognizing “that there may be circumstances where the structure of the Banks does not render them distinct from the government for purposes of statutes other than the AIA.”
The Federal Circuit’s holding opens the door to post-issuance review proceedings (most significantly post grant and inter partes review proceeings) filed by the Federal Reserve Banks. But the holding also highlights the limited impact of the Supreme Court’s holding in Return Mail, and signals the potential for other government-created entities to initiate post-issuance proceedings if they are not agencies and if they may be sued in federal district court rather than only in the Court of Federal Claims.