USPTO Patent Denial Lawsuits Subject to FRE and FRCP
By Harry Zhou – Edited by Ian C. Wildgoose Brown
Hyatt v. Kappos, No. 07-1066 (Fed. Cir. Nov. 8, 2010) (en banc)
The U.S. Court of Appeals for the Federal Circuit, sitting en banc, vacated and remanded the decision of the U.S. District Court for the District of Columbia, which had ruled that a patent applicant is barred from introducing new facts into evidence in a civil action against the United States Patent and Trademark Office (“USPTO”) brought under 35 U.S.C. § 145. The district court had ruled that the new facts should have been produced to the USPTO in the original application.
The Federal Circuit reversed its precedent, holding that a district court does not review a decision of the USPTO under the Administrative Procedure Act (“APA”)’s deferential court/agency standard on issues where the applicant offers new facts in evidence. The only limitations on the admissibility of new evidence in a § 145 civil action are those “contained in the Federal Rules of Evidence and Federal Rules of Civil Procedure.” The court remanded the case for further proceedings.
271 Patent Blog offers a brief summary of the decision. Patently-O features an analysis of the decision’s likely impacts. IPWatchdog provides a survey of the case law and statutory background relevant to the decision.
Gil Hyatt filed suit with the district court under § 145 in 2003 after the USPTO rejected seventy-nine of his patent applications and the USPTO’s internal Board of Patent Appeals and Interferences (“BPAI”) affirmed. (Hyatt’s other option for seeking judicial review of the BPAI decision was to appeal directly to the Federal Circuit under 35 U.S.C. § 141.) In his district court filings, Hyatt included a declaration offering new facts supporting his patent claims. The district court excluded these facts from evidence, reasoning that as a reviewing court it was bound by the APA to give deference to the findings of fact made by the USPTO. The district court ruled that Hyatt should have produced all the facts material to the patentability of his claims with his initial patent application and granted summary judgment for the USPTO. Hyatt appealed.
The Federal Circuit concluded that the district court had abused its discretion in refusing to admit Hyatt’s declaration of new facts in evidence. The court based its decision on the language of 35 U.S.C. § 145, the proper scope of the APA, and various policy arguments. The court explained that a § 145 civil action is not an appeal but a “hybrid” action. Therefore, the district court reviews the action de novo on issues where the the plaintiff–applicant offers new evidence and on the administrative record alone on other issues
This decision likely eases the pressure on applicants to exhaustively disclose facts to the USPTO when they first file a patent application. With the opportunity to introduce evidence after the closing of administrative proceedings, dissatisfied applicants likely will be able to challenge the USPTO’s rejections more effectively. An applicant may still be barred from presenting new “issues” in the civil action, however, and BPAI findings and rulings will be given deference under the APA where the applicant presents no new evidence to the district court.
Judge Dyk dissented, and was joined by Judge Gajarsa. While Judge Dyk agreed that new evidence should be admissible, he argued that the majority erred in recognizing no additional limits on the introduction of new evidence in a § 145 civil action, which he saw as contrary to the APA. Judge Newman concurred in part and dissented in part, arguing for a uniform de novo review standard rather than a more deferential review standard only where the patent applicant offers new evidence.
Harry Zhou is a 2L at the Harvard Law School.