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Supreme Court unanimously holds § 145 to allow admission of new evidence and de novo review of BPAI decisions by the District of Columbia
April 23, 2012
Intellectual Property Alert

The Supreme Court upheld the Federal Circuit’s en banc decision that new evidence can be presented in a civil action brought under 35 U.S.C. § 145 against the Director of the USPTO, even if that evidence could have been presented to the USPTO. Any factual disputes created by the newly admitted evidence must be reviewed de novo rather than under the “substantial evidence” standard.

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On April 18, 2012, in Kappos v. Hyatt, No. 10-1219 (U.S. April 18, 2012), the Supreme Court unanimously upheld the Federal Circuit’s en banc decision that an action brought in the United States District Court for the District of Columbia by a patent applicant against the Director of the United States Patent and Trademark Office (USPTO) may hear new evidence that is not a part of the administrative record and must resolve new factual disputes using the de novo standard. The only limitations on the admissibility of the evidence are the Federal Rules of Evidence and the Federal Rules of Civil Procedure.

The patent examiner had rejected several claims of Gilbert Hyatt’s application. He appealed those rejections to the Board of Patent Appeals and Interferences (BPAI), which affirmed many of the rejections. Hyatt then filed a civil action in the United States District Court for the District of Columbia against the Director of the USPTO under 35 U.S.C. § 145.

In the District Court, Hyatt submitted a written declaration to the District Court that he had not submitted to the USPTO. The District Court declined to consider the declaration and granted summary judgment for the Director using only the USPTO’s record. The District Court reviewed the administrative record using the “substantial evidence” standard of the Administrative Procedure Act (“APA”).[1] A divided panel of the Federal Circuit affirmed the District Court stating that the APA restricted admissible evidence and that review is not “wholly de novo.”[2] The en banc Federal Circuit vacated the District Court’s decision, holding that Congress’ intent was to allow applicants to submit new evidence and that any factual disputes that arose from the evidence must be reviewed de novo.

The Supreme Court was presented with two questions. First, “whether there are any limitations on the applicant’s ability to introduce new evidence before the district court.”[3] Second, the Court had to decide “what standard of review the district court should apply when considering new evidence.”[4]

Section 145 allows “remedy by civil action against the Director” where the “court may adjudge that such applicant is entitled to receive a patent for his invention.”[5] The Director had argued that § 145 should still be read in light of the APA and require both deference to the USPTO and exhaustion of administrative remedies. However, the Director conceded § 145 is not limited to the record before the BPAI. Accordingly, the Court reasoned that requiring deference to the BPAI “makes little sense” when the district court must act as a factfinder regarding questions that were not before the BPAI. Further, the Court stated that exhaustion did not apply because a § 145 action occurs after the USPTO process is complete and there is no opportunity for remand.

The Court held that the District Court may still consider actions during prosecution and the findings of the BPAI when assigning weight to the evidence presented. Although the Director warned that this would encourage applicants to withhold evidence from the USPTO, the Court found this “unlikely” because applicants would be intentionally undermining their claims for a “speculative chance” at some advantage.[6]

Justice Sotomayor concurred to observe that she did not read the majority’s decision as preventing a district court from using “‘the ordinary course of equity practice and procedure’” to exclude evidence that was “deliberately suppressed from the USPTO.”[7

  1. Administrative Procedure Act, 5 U.S.C. § 701 et. seq. (2006).
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  2. Hyatt v. Doll, 576 F. 3d 1246, 1269‑1270 (Fed. Cir. 2009).
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  3. Kappos v. Hyatt, slip. op. at 1.
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  4. Id.
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  5. 35 U.S.C. § 145.
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  6. Id. at 14.
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  7. Id. at concurring opinion 3 (Sotomayor, J., concurring) (quoting majority opinion at 13).
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