Court Ruling Allows Presentation of New Evidence in Civil Action

The U.S. Supreme Court recently decided in Kappos v. Hyatt, No. 10-1219, (i) that a patent applicant is free to introduce new evidence in a civil action to obtain a patent pursuant to 35 U.S.C. § 145, subject only to the rules applicable in all civil actions, even if the applicant had no justification for failing to present the evidence to the U.S. Patent and Trademark Office (PTO); and (ii) that if new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO.

Background

Gilbert Hyatt filed a patent application that included 117 claims related to a computerized display system for processing image information. A PTO examiner denied all claims under 2,546 separate rejections, and Hyatt appealed. The Board of Patent Appeals and Interferences (the Board) reversed most of the rejections but affirmed rejections based on written description and enablement. Hyatt then filed a civil action in district court against the director of the PTO pursuant to 35 U.S.C. § 145.

In the district court, Hyatt submitted a declaration refuting the Board's conclusion that his patent application lacked an adequate written description. The district court, however, found that Hyatt acted negligently by failing to submit his declaration to the PTO earlier, excluded Hyatt's newly submitted evidence, and granted the director's motion for summary judgment. Hyatt appealed to the Federal Circuit, which initially affirmed the decision of the district court. Upon en banc review, however, the Federal Circuit reversed the district court's ruling, by a 7-2 vote on most issues, concluding that patent applicants who sue the director of the PTO in a district court pursuant to 35 U.S.C. § 145 may introduce new evidence that could have been presented to the PTO in the first instance. The en banc Federal Circuit further held that if new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO. The PTO filed a petition for certiorari that was granted on June 27, 2011.

Supreme Court Decision

On April 18, 2012, the Supreme Court unanimously affirmed the opinion of the Federal Circuit. The Court found no support in the text of Section 145 for the director's argument that there should be a new evidentiary rule or a heightened standard of review in Section 145 proceedings. The Court reviewed the evidentiary and procedural rules that were in effect when Section 145 was enacted, as well as its own precedent, and concluded that "there are no limitations on a patent applicant's ability to introduce new evidence in a §145 proceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure." Kappos, slip op. at 14. The Court also adopted the Federal Circuit's view in holding that "if new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO." Id. If no new evidence is introduced, then the Court must review the action on the administrative record and deference must be given to PTO factual findings subject to the PTO's standard of review.

A copy of the opinion can be found at http://www.supremecourt.gov/opinions/11pdf/10-1219.pdf.