Kappos v. Hyatt
Annotate this Case
566 U.S. ___ (2012)
In 1995, respondent filed a patent application covering 117 claims under the Patent Act of 1952, 35 U.S.C. 112. The patent examiner denied all of the claims for lack of an adequate written description. Respondent appealed to the Board of Patent Appeals and Interferences, pursuant to section 134 of the Act, which approved some claims but denied others. Pursuant to section 145 of the Act, respondent filed a civil action against the Director, but the district court declined to consider respondent's newly proffered written declaration in support of the adequacy of his description, thus limiting its review to the administrative record. On appeal, the Federal Circuit vacated the judgment. The Court held that there are no limitations on a patent applicant's ability to introduce new evidence in a section 145 proceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure. If new evidence was presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the Patent and Trade Office. Therefore, the Court affirmed the judgment of the Federal Circuit.
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .
SUPREME COURT OF THE UNITED STATES
KAPPOS, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, PATENT AND TRADEMARK OFFICE v. HYATT
certiorari to the united states court of appeals for the federal circuit
No. 10–1219. Argued January 9, 2012—Decided April 18, 2012
Under the Patent Act of 1952, if a Patent and Trade Office (PTO) examiner denies a patent application, 35 U. S. C. §131, the applicant may file an administrative appeal with the PTO’s Board of Patent Appeals and Interferences, §134. If the Board also denies the application, the applicant may appeal directly to the Court of Appeals for the Federal Circuit under §141. Alternatively, the applicant may file a civil action against the PTO Director under §145, which permits the applicant to present evidence that was not presented to the PTO.
Respondent Hyatt filed a patent application covering multiple claims. The patent examiner denied all of the claims for lack of an adequate written description. Hyatt appealed to the Board, which approved some claims but denied others. Pursuant to §145, Hyatt filed a civil action against the Director, but the District Court declined to consider Hyatt’s newly proffered written declaration in support of the adequacy of his description, thus limiting its review to the administrative record. Applying the deferential “substantial evidence” standard of the Administrative Procedure Act (APA) to the PTO’s factual findings, the court granted summary judgment to the Director. On appeal, the Federal Circuit vacated the judgment, holding that patent applicants can introduce new evidence in §145 proceedings, subject only to the limitations in the Federal Rules of Evidence and the Federal Rules of Civil Procedure. It also reaffirmed its precedent that when new, conflicting evidence is introduced, the district court must make de novo findings to take such evidence into account.
Held: There are no limitations on a patent applicant’s ability to introduce new evidence in a §145 proceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure. If new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO. Pp. 5−14.
(a) Section 145, by its express terms, neither imposes unique evidentiary limits in district court proceedings nor establishes a heightened standard of review for PTO factual findings. Nonetheless, the Director contends that background principles of administrative law govern the admissibility of new evidence and impose a deferential standard of review in §145 proceedings. As the Director concedes, however, judicial review in §145 proceedings is not limited to the administrative record because the district court may consider new evidence. If it does so, the district court must act as a factfinder and cannot apply the APA’s deferential standard to PTO factual findings when those findings are contradicted by new evidence. Moreover, the doctrine of administrative exhaustion―the primary purpose of which is “the avoidance of premature interruption of the administrative process,” McKart v. United States, 395 U. S. 185 ―does not apply because the PTO process is complete by the time a §145 proceeding occurs. Pp. 5−7.
(b) The core language of the 1870 Patent Act, codified as Revised Statute §4915 (R. S. 4915), remains largely unchanged in §145. Decisions interpreting R. S. 4915 thus inform this Court’s understanding of §145. Both Butterworth v. United States ex rel. Hoe, 112 U. S. 50 , and Morgan v. Daniels, 153 U. S. 120 , describe the nature of R. S. 4915 proceedings, but the two opinions can be perceived as being in some tension. Butterworth described the proceeding as an original civil action seeking de novo adjudication of the merits of a patent application, while Morgan described it as a suit for judicial review of agency action under a deferential standard. The cases are distinguishable, however, because they addressed different circumstances. Butterworth discussed a patent applicant’s challenge to the denial of his application, whereas Morgan involved an interference proceeding that would now be governed by §146, not §145, and in which no new evidence was presented. Here, this Court is concerned only with a §145 proceeding in which new evidence was presented to the District Court, so Butterworth guides this Court’s decision. Thus, a district court conducting a §145 proceeding may consider all competent evidence adduced and is not limited to considering only new evidence that could not have been presented to the PTO. The introduction of new evidence in §145 proceedings is subject only to the Federal Rules of Evidence and the Federal Rules of Civil Procedure, and if new evidence is presented to the district court on a disputed factual question, de novo findings by the district court will be necessary for that new evidence to be taken into account along with the evidence before the Board. Pp. 7−13.
(c) The district court may, however, consider whether the applicant had an opportunity to present the newly proffered evidence before the PTO in deciding what weight to afford that evidence. Pp. 13−14.
625 F. 3d 1320, affirmed and remanded.
Thomas, J., delivered the opinion for a unanimous Court. Soto- mayor, J., filed a concurring opinion, in which Breyer, J., joined.