Federal banks can challenge patents: US Supreme Court

The U.S. Supreme Court has dismissed a bid to review a decision of the Federal Circuit which allows Federal Reserve banks to challenge patents, according to reports.

Bozeman Financial LLC had applied to the court for a ruling on the decision, which distinguishes between the 12 Federal Reserve banks and government. As a result of the distinction, the banks are able to challenge patents under the America Invents Act.

Bozeman’s case was based on the Supreme Court’s Return Mail ruling, which stated that arms of government were not able to file patent challenges under the act. In Return Mail, the U.S. Postal Service was found to be an established federal agency, and therefore not a “person” able to challenge patents under the Act.

However, the Supreme Court upheld a previous ruling against Bozeman, finding that the Federal Reserve banks themselves were not agencies of government, and therefore were at liberty to file patent challenges.

In the Bozeman case, the patents open for challenge concerned “methods for authorizing and clearing financial transactions to detect and prevent fraud.”

In its petition against the Federal Circuit decision, representatives for Bozeman Financial said the court had “fashioned a formalistic test of its own creation,” but had ignored “numerous significant features” that suggested the banks were in fact part of government.

Responding, the Federal Reserve argued justices must ensure they can continue to challenge patents, suggesting laws concerning government should not necessarily apply to “federal instrumentalities”, and that the court had “properly considered the attributes of the reserve banks relevant to the question at hand — namely, the fact that the banks’ participation in the patent system bears little resemblance to that of federal agencies.”

As a Supreme Court ruling, the judgement is precedential, and can be relied upon as having established a certain legal position moving forward.

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