The U.S. Court of Appeals for the Federal Circuit, in a 6-2-1 en banc ruling, held that 35 U.S.C. §145 imposes no special limitation on a patent applicant’s right to introduce new evidence in a civil action against the U.S. Patent and Trademark Office (USPTO). Hyatt v. Kappos, Case No. 07-1066 (Fed. Cir., Nov. 8, 2010) (Moore, J.) (Dyk, J.; Gajarsa, J., dissenting) (Newman, J., concurring-in-part, dissenting-in-part).

In reversing a prior panel decision, the en banc Federal Circuit held that the only limitations on the admissibility of new evidence in a §145 proceeding are those imposed by the Federal Rules of Evidence and Federal Rules of Civil Procedure. However, the Court confirmed that new issues (and related evidence) not raised during USPTO proceedings may not be raised in a §145 proceeding and that, in cases in which the applicant fails to adduce additional evidence, the district court should apply the APA standard of review.

The case stems from an application filed by Gilbert P. Hyatt. During prosecution, Hyatt filed a response to a non-final office action wherein he amended and added claims. The examiner determined that he failed to identify support in the specification for the new and amended claims. In response, Hyatt listed specification support for the claims, but the examiner was not persuaded and issued a final office action rejecting all pending claims.

Hyatt appealed to the U.S. Board of Patent Appeals and Interferences (the Board). Although the Board reversed most of the examiner’s written description rejections, it upheld some and Hyatt filed a request for rehearing on the still-rejected claims. The Board dismissed the request on the basis that it raised new issues that could have been raised earlier to either the examiner or the Board. Hyatt responded by filing a civil action under §145.

In response to the USPTO’s summary judgment motion, Hyatt submitted a declaration identifying specification support for his new and amended claims. The USPTO objected to the declaration, arguing that it constituted improper new evidence that Hyatt should have introduced earlier, either before the Board or the examiner. The district court ruled that Hyatt’s failure to present the evidence earlier constituted a negligent act and granted the USPTO’s summary judgment motion. Hyatt appealed.

In its earlier ruling (see IP Update, Vol. 12, No. 8), the Federal Circuit panel affirmed the lower court’s ruling. The panel majority concluded that new evidence should not be permitted if it could and should have been introduced at the USPTO but was not. The Federal Circuit later agreed to hear the appeal en banc. (SeeIP Update, Vol. 13, No. 3.)

Now, in its en banc ruling, the Court reversed the original panel decision, focusing on the language of the statute and noting that the statute itself provided no indication that a civil action under §145 is different from any other civil action. The Court also noted that §145 distinguishes between the civil action as an alternative to a direct appeal to the Federal Circuit under §141 (where the appellate record is fixed, i.e., to the record before the Board).

The Court also considered the legislative history of §145, noting that when Congress drafted the Patent Act of 1870, it permitted applicants seeking review of an adverse finding of patentability at the USPTO to introduce new evidence and concluded that nothing has changed since that would have altered the Patent Act.

The Federal Circuit rejected the USPTO’s argument that Congress intended that only evidence that could not have reasonably been presented to the Patent Office should be admissible in §145 proceedings. Citing a line of Supreme Court cases, the Court concluded §145 permits the introduction of new evidence.

Judge Newman, in her concurring opinion, agreed with the majority’s holding that new evidence may be introduced in a §145 action, but dissented from the holding that when no new evidence is submitted, the APA standard of review applies as contrary to “the statutory plan.”

Judge Dyk, joined by Judge Gajarsa, dissented, arguing that the majority made an error in finding that §145 imposes no limitation on an applicant’s right to submit new evidence to the district court.

Practice Note: The burden on applicants to submit essentially all possible evidence in support of patentability to the Board is now somewhat alleviated. However, in view of the APA standard of review applicable in case where no new evidence is adduced, a disappointed applicant has no reason to seek review of Board decisions under §145 unless it intends to introduce additional evidence in that proceeding. Otherwise, the traditional direct appeal to the Federal Circuit (under §141) is the most appropriate and efficient way to proceed.