The U.S. Supreme Court, in a unanimous opinion authored by Justice Clarence Thomas, has determined that 35 U.S.C. § 145, which allows a disappointed patent applicant to file a civil action against the U.S. Patent and Trademark Office director in lieu of filing a direct appeal to the Federal Circuit from the Board of Patent Appeals, does not limit the introduction of new evidence. Kappos v. Hyatt, No. 10-1219 (U.S., decided April 18, 2012). Additional details about the case appear in Issue 16 of this Bulletin. So ruling, the Court affirmed the Federal Circuit’s decision to vacate a summary judgment granted to the director.
Essentially, the Court rejected the director’s argument that administrative law principles “govern the admissibility of new evidence and require a deferential standard of review in a § 145 proceeding.” According to the Court, these proceedings are not limited to the administrative record; rather, “the district court may consider new evidence [and w]hen the district court does so, it must act as a factfinder. In that role, it makes little sense for the district court to apply a deferential standard of review to [USPTO] factual findings that are contradicted by the new evidence.” The Court also held that principles of administrative exhaustion do not apply to a § 145 proceeding. Still, the Court agreed with the Federal Circuit that “the district court may, in its discretion, ‘consider the proceedings before and findings of the Patent office in deciding what weight to afford an applicant’s newly admitted evidence.’”
Justices Sonia Sotomayor and Stephen Breyer concurred to suggest that district courts retain the authority “consistent with ‘the ordinary course of equity practice and procedure,’ to exclude evidence ‘deliberately suppressed’ from the [USPTO] or otherwise withheld in bad faith. For the reasons set out by the Court, an applicant has little to gain by such tactics; such cases will therefore be rare.”