A divided en banc Federal Circuit Court of Appeals has determined that patent applicants who are dissatisfied with a Board of Patent Appeals (Board) determination and decide to pursue their claims in federal court under 35 U.S.C. § 145, face no limitations on the right to introduce new evidence other than those pertaining to all civil actions under federal evidentiary and procedural rules. Hyatt v. Kappos, No. 2007-1066 (Fed. Cir., decided November 8, 2010). So ruling, the court rejected “the Director’s proposal that only ‘new evidence that could not reasonably have been provided to the agency in the first instance’ is admissible in a § 145 action.” Still, the court qualified its ruling by stating that the district court could give less weight to new evidence if its reliability or credibility is in question in light of inconsistent evidence previously introduced during U.S. Patent and Trademark Office (PTO) proceedings.
The issue arose in a case involving a patent application for “a computerized display system for processing image information.” The examiner issued 2,546 separate rejections of the applicant’s 117 claims, mostly on grounds of lacking support in the specification, failure to comply with the written description and enablement requirements, obviousness, double patenting, or being anticipated. On appeal to the Board, the applicant prevailed on more than 93 percent of the examiner’s rejections; he sought reargument, but the Board dismissed the request finding that he raised new arguments that could have been presented earlier to the examiner or the Board.
The applicant then filed a civil action in a D.C. district court under § 145, and the PTO director filed a motion for summary judgment, contending that the pending claims were invalid for failure to comply with the written description requirement. Opposing the motion, the applicant submitted a written declaration indentifying “portions of the specification that one of skill in the art would understand to describe the limitations challenged by the Director.” The director countered that the court should not consider the declaration because it had not been previously submitted. The district court agreed, finding that the applicant’s declaration was directed to the written description rejections and could have been presented earlier, “certainly by the time his patent application was considered by the Board.” The district court then granted the summary judgment motion.
On appeal to the Federal Circuit, a divided panel affirmed, noting that while “it is beyond question that in appropriate circumstances new evidence may be submitted to the district court in a § 145 action,” the general practice before the federal courts is “in some circumstances to exclude evidence which a party could and should have introduced before the Patent Office but did not despite an obligation to do so.” The panel also apparently concluded that the Administrative Procedure Act imposed restrictions on the admission of new evidence in a § 145 action. The Federal Circuit agreed to rehear the appeal en banc and concluded that the district court applied the wrong legal standard for the admissibility of evidence in a § 145 proceeding and abused its discretion in excluding the declaration.
A concurring and dissenting judge agreed that new evidence may be submitted in a § 145 proceeding, but disagreed with the majority’s holding that “when no new evidence is provided, the findings and rulings of the PTO receive the same deferential treatment in the district court as would apply if the cause were not a civil action under section 145, but instead were an Administrative Procedure Act direct appeal to the Federal Circuit under 35 U.S.C. § 141.”
Two dissenting judges characterized the en banc majority decision as “a remarkable departure from settled principles of administrative law.” According to the dissenting opinion, “Allowing trial de novo in the district court denigrates the important expertise of the PTO, is contrary to established principles of administrative law, finds no support in the language of the statute, and is contrary to decision of at least five other circuits. The majority opinion invites applicants to deliberately withhold evidence from the [U.S. Patent and Trademark Office] in favor of a more hospitable district court forum.”