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SUPREME COURT OF THE UNITED STATES
_________________
No. 10–1219
_________________
DAVID J. KAPPOS, UNDER SECRETARY OF COM- MERCE
FOR INTELLECTUAL PROPERTY AND DIRECTOR, PATENT AND TRADEMARK OF-
FICE, PETITIONER
v. GILBERT P. HYATT
on writ of certiorari to the united states
court of appeals for the federal circuit
[April 18, 2012]
Justice Thomas delivered the opinion of the
Court.
The Patent Act of 1952, 35 U. S. C.
§100
et seq., grants a patent applicant whose
claims are denied by the Patent and Trademark Office (PTO) the
opportunity to challenge the PTO’s decision by filing a civil
action against the Director of the PTO in federal district court.
In such a proceeding, the applicant may present evidence to the
district court that he did not present to the PTO. This case
requires us to consider two questions. First, we must decide
whether there are any limitations on the applicant’s ability
to introduce new evidence before the district court. For the
reasons set forth below, we conclude that there are no evidentiary
restrictions beyond those already imposed by the Federal Rules of
Evidence and the Federal Rules of Civil Procedure. Second, we must
determine what standard of review the district court should apply
when considering new evidence. On this question, we hold that the
district court must make a
de novo finding when new
evidence is presented on a disputed question of fact. In deciding
what weight to afford that evidence, the district court may,
however, consider whether the applicant had an opportunity to
present the evidence to the PTO.
I
The Patent Act of 1952 establishes the process
by which the PTO examines patent applications. A patent exam- iner
first determines whether the application satisfies the statutory
prerequisites for granting a patent. 35 U. S. C.
§131. If the examiner denies the application, the applicant
may file an administrative appeal with the PTO’s Board of
Patent Appeals and Interferences (Board). §134. If the Board
also denies the application, the Patent Act gives the disappointed
applicant two options for judicial review of the Board’s
decision. The applicant may either: (1) appeal the decision
directly to the United States Court of Appeals for the Federal
Circuit, pursuant to §141; or (2) file a civil action against
the Director of the PTO in the United States District Court for the
District of Columbia pursuant to §145.[
1]
In a §141 proceeding, the Federal Circuit
must review the PTO’s decision on the same administrative
record that was before the PTO. §144. Thus, there is no
opportunity for the applicant to offer new evidence in such a
proceeding. In
Dickinson v.
Zurko,
527 U.S.
150 (1999), we addressed the standard that governs the Federal
Circuit’s review of the PTO’s factual findings. We held
that the Administrative Procedure Act (APA), 5 U. S. C.
§701
et seq., applies to §141 proceedings and
that the Federal Circuit therefore should set aside the PTO’s
factual findings only if they are “ ‘unsupported
by substantial evidence.’ ” 527 U. S., at 152
(quoting 5 U. S. C. §706).
In
Zurko, we also noted that, unlike
§141, §145 permits the applicant to present new evidence
to the district court that was not presented to the PTO. 527
U. S., at 164. This opportunity to present new evidence is
significant, not the least because the PTO generally does not
accept oral testimony. See Brief for Petitioner 40, n. 11. We
have not yet addressed, however, whether there are any limitations
on the applicant’s ability to introduce new evidence in such
a proceeding or the appropriate standard of review that a district
court should apply when considering such evidence.
II
In 1995, respondent Gilbert Hyatt filed a
patent application that, as amended, included 117 claims. The
PTO’s patent examiner denied each claim for lack of an
adequate written description. See 35 U. S. C. §112
(requiring pat- ent applications to include a
“specification” that provides, among other information,
a written description of the invention and of the manner and
process of making and using it). Hyatt appealed the
examiner’s decision to the Board, which eventually approved
38 claims, but denied the rest. Hyatt then filed a §145 action
in Federal Dis- trict Court against the Director of the PTO
(Director), peti- tioner here.
To refute the Board’s conclusion that his
patent application lacked an adequate written description, Hyatt
submitted a written declaration to the District Court. In the
declaration, Hyatt identified portions of the patent specification
that, in his view, supported the claims that the Board held were
not patentable. The District Court determined that it could not
consider Hyatt’s declaration because applicants are
“ ‘precluded from presenting new is- sues, at
least in the absence of some reason of justice put forward for
failure to present the issue to the Patent
Office.’ ”
Hyatt v.
Dudas, Civ.
Action No. 03–0901 (D DC, Sept. 30, 2005), p. 9, App. to
Pet. for Cert. 182a (quoting
DeSeversky v.
Brenner,
424 F.2d 857, 858 (CADC 1970)). Because the excluded declaration
was the only additional evidence submitted by Hyatt in the
§145 proceeding, the evidence remaining before the District
Court consisted entirely of the PTO’s administrative record.
Therefore, the District Court reviewed all of the PTO’s
factual findings under the APA’s deferential
“substantial evidence” standard. See
supra, at
2; see also
Mazzari v.
Rogan,
323 F.3d 1000, 1004–1005 (CA Fed. 2003). Applying that
standard, the District Court granted summary judgment to the
Director.
Hyatt appealed to the Federal Circuit. A divided
panel affirmed, holding that the APA imposed restrictions on the
admission of new evidence in a §145 proceeding and that the
district court’s review is not “wholly de novo.”
Hyatt v.
Doll, 576 F.3d 1246, 1269–1270 (2009).
The Federal Circuit granted rehearing en banc and vacated the
District Court’s grant of summary judgment. The en banc court
first held “that Congress intended that applicants would be
free to introduce new evidence in §145 proceedings subject
only to the rules applicable to all civil actions, the Federal
Rules of Evidence and the Federal Rules of Civil Procedure,”
even if the applicant had no justification for failing to present
the evidence to the PTO. 625 F.3d 1320, 1331 (2010). Reaffirming
its precedent, the court also held that when new, conflicting
evidence is introduced in a §145 proceeding, the district
court must make
de novo findings to take such evidence
into account.
Id., at 1336. We granted certiorari, 564
U. S. ___ (2011), and now affirm.
III
The Director challenges both aspects of the
Federal Circuit’s decision. First, the Director argues that a
district court should admit new evidence in a §145 action only
if the proponent of the evidence had no reasonable opportunity to
present it to the PTO in the first instance. Second, the Director
contends that, when new evidence is introduced, the district court
should overturn the PTO’s fac- tual findings only if the new
evidence clearly establishes that the agency erred. Both of these
arguments share the premise that §145 creates a special
proceeding that is distinct from a typical civil suit filed in
federal district court and that is thus governed by a different set
of procedural rules. To support this interpretation of §145,
the Director relies on background principles of administrative law
and pre-existing practice under a patent statute that predated
§145. For the reasons discussed below, we find that neither of
these factors justifies a new evidentiary rule or a heightened
standard of review for factual findings in §145
proceedings.
A
To address the Director’s challenges, we
begin with the text of §145. See,
e.g., Magwood
v.
Patterson, 561 U. S. ___, ___ (2010) (slip op., at
10). Section 145 grants a disappointed patent applicant a
“remedy by civil action against the Director.” The
section further explains that the district court “may adjudge
that such applicant is entitled to receive a patent for his
invention, as specified in any of his claims involved in the
decision of the [PTO], as the facts in the case may appear and such
adjudication shall authorize the Director to issue such patent on
compliance with the requirements of law.” By its terms,
§145 neither imposes unique evidentiary limits in district
court proceedings nor establishes a heightened standard of re- view
for factual findings by the PTO.
B
In the absence of express support for his
position in the text of §145, the Director argues that the
statute should be read in light of traditional principles of
administrative law, which Congress codified in the APA. The
Director notes that §145 requires a district court to review
the reasoned decisionmaking of the PTO, an executive agency with
specific authority and expertise. Accordingly, the Director
contends that a district court should defer to the PTO’s
factual findings. The Director further contends that, given the
traditional rule that a party must exhaust his administrative
remedies, a district court should consider new evidence only if the
party did not have an opportunity to present it to the agency.
We reject the Director’s contention that
background principles of administrative law govern the
admissibility of new evidence and require a deferential standard of
review in a §145 proceeding. Under the APA, judicial review of
an agency decision is typically limited to the administrative
record. See 5 U. S. C. §706. But, as the Director
concedes, §145 proceedings are not so limited, for the
district court may consider new evidence. When the district court
does so, it must act as a factfinder.
Zurko, 527 U. S.,
at 164. In that role, it makes little sense for the district court
to apply a deferential standard of review to PTO factual findings
that are contradicted by the new evidence. The PTO, no matter how
great its authority or expertise, cannot account for evidence that
it has never seen. Consequently, the district court must make its
own findings
de novo and does not act as the
“reviewing court” envisioned by the APA. See 5
U. S. C. §706.
We also conclude that the principles of
administrative exhaustion do not apply in a §145 proceeding.
The Director argues that applicants must present all available
evidence to the PTO to permit the PTO to develop the necessary
facts and to give the PTO the opportunity to properly apply the
Patent Act in the first instance. Brief for Petitioner 21–22
(citing
McKart v.
United States,
395 U.S.
185, 193–194 (1969)). But as this Court held in
McKart, a primary purpose of administrative exhaustion
“is, of course, the avoidance of premature interruption of
the administrative process.”
Id., at 193. That
rationale does not apply here because, by the time a §145
proceeding occurs, the PTO’s process is complete. Section
145, moreover, does not provide for remand to the PTO to consider
new evidence, and there is no pressing need for such a procedure
because a district court, unlike a court of appeals, has the
ability and the competence to receive new evidence and to act as a
factfinder. In light of these aspects of §145
proceedings—at least in those cases in which new evidence is
presented to the district court on a dis- puted question of
fact—we are not persuaded by the Director’s suggestion
that §145 proceedings are governed by the deferential
principles of agency review.
C
Having concluded that neither the statutory
text nor background principles of administrative law support an
evidentiary limit or a heightened standard of review for factual
findings in §145 proceedings, we turn to the evidentiary and
procedural rules that were in effect when Congress enacted
§145 in 1952. Although §145 is a relatively modern
statute, the language in that provision originated in the Act of
July 8, 1870 (1870 Act), ch. 230, 16Stat. 198, and the history of
§145 proceedings can be traced back to the Act of July 4, 1836
(1836 Act), ch. 357, 5Stat. 117. Thus, we begin our inquiry
with the 1836 Act, which established the Patent Office, the
PTO’s predecessor, and first authorized judicial review of
its decisions.
1
The 1836 Act provided that a patent applicant
could bring a bill in equity in federal district court if his
application was denied on the ground that it would interfere with
another patent.
Id., at 123–124; see also B. Shipman,
Handbook of the Law of Equity Pleading §§101–103,
pp. 168–171 (1897). Three years later, Congress expanded that
provision, making judicial review available whenever a patent was
refused on any ground. Act of Mar. 3, 1839 (1839 Act), 5Stat. 354.
Pursuant to these statutes, any disappointed patent applicant could
file a bill in equity to have the district court
“adjudge” whether the applicant was “entitled,
according to the principles and provisions of [the Patent Act], to
have and receive a patent for his invention.” 1836 Act,
5Stat. 124.
In 1870, Congress amended the Patent Act again,
adding intermediate layers of administrative review and in-
troducing language describing the proceeding in the district court.
16Stat. 198. Under the 1870 Act, an applicant denied a patent by
the primary examiner could appeal first to a three-member board of
examiners-in-chief, then to the Commissioner for Patents, and
finally to an en banc sitting of the Supreme Court of the District
of Columbia.[
2]
Id., at
205. Notably, Congress described that court’s review as an
“appeal” based “on the evidence produced before
the commissioner.”
Ibid. The 1870 Act preserved the
prior remedy of a bill in equity in district court for the
applicant whose appeal was denied either by the Commissioner or by
the Supreme Court of the District of Columbia.
Ibid. The
district court, in a proceeding that was distinct from the appeal
considered on the administrative record by the Supreme Court of the
District of Columbia, would “adjudge” whether the
applicant was “entitled, according to law, to receive a
patent for his invention . . . as the facts in the case
may appear.”
Ibid. In 1878, Congress codified this
provision of the 1870 Act as Revised Statute §4915
(R. S. 4915). That statute was the immediate predecessor
to §145, and its core language remains largely unchanged in
§145. Accordingly, both parties agree that
R. S. 4915 and the judicial decisions interpreting that
statute should inform our understanding of §145.
2
This Court described the nature of
R. S. 4915 proceedings in two different cases:
Butterworth v.
United States ex rel. Hoe,
112 U.S.
50 (1884), and
Morgan v.
Daniels,
153
U.S. 120 (1894). In
Butterworth, the Court held that the
Secretary of the Interior, the head of the federal department in
which the Patent Office was a bureau, had no authority to review a
decision made by the Commissioner of Patents in an interference
proceeding. In its discussion, the Court described the remedy
provided by R. S. 4915 as
“a proceeding in a court of the
United States having original equity jurisdiction under the patent
laws, according to the ordinary course of equity practice and
procedure. It is not a technical appeal from the Patent-Office,
like that authorized [before the Supreme Court of the District of
Columbia], confined to the case as made in the record of that
office, but is prepared and heard upon all competent evidence
adduced and upon the whole merits.” 112 U. S., at
61.
The
Butterworth Court also cited several
lower court cases, which similarly described R. S. 4915
proceedings as “altogether independent” from the
hearings before the Patent Office and made clear that the parties
were “at liberty to introduce additional evidence”
under “the rules and practice of a court of equity.”
In re Squire, 22 F. Cas. 1015, 1016 (No. 13,269) (CC ED Mo.
1877); see also
Whipple v.
Miner, 15 F. 117, 118 (CC
Mass. 1883) (describing the federal court’s jurisdiction in
an R. S. 4915 proceeding as “an independent,
original jurisdiction”);
Butler v.
Shaw, 21 F.
321, 327 (CC Mass. 1884) (holding that “the court may receive
new evidence, and has the same powers as in other cases in
equity”).
Ten years later, in
Morgan, this Court
again confronted a case involving proceedings under
R. S. 4915.
153
U.S. 120. There, a party challenged a factual finding by the
Patent Office, but neither side presented additional evidence in
the District Court.
Id., at 122–123. This Court
described the parties’ dispute as one over a question of fact
that had already “been settled by a special tribunal
[e]ntrusted with full power in the premises” and
characterized the resulting District Court proceeding not as an
independent civil action, but as “something in the nature of
a suit to set aside a judgment.”
Id., at 124.
Consistent with that view, the Court held that the agency’s
findings should not be overturned by “a mere preponderance of
evidence.”
Ibid.
Viewing
Butterworth and
Morgan
together, one might perceive some tension between the two cases.
Butterworth appears to describe an R. S. 4915
proceeding as an original civil action, seeking
de novo
adjudication of the merits of a patent application.
Morgan,
on the other hand, appears to describe an R. S. 4915
proceeding as a suit for judicial review of agency action, governed
by a deferential standard of review. To resolve that apparent
tension, the Director urges us to disregard the language in
Butterworth as mere dicta and to follow
Morgan. He
argues that
Butterworth “shed[s] no light on the
extent to which new evidence was admissible in R. S. 4915
proceedings or on the standard of review that applied in such
suits.” Brief for Petitioner 33. The Director maintains that
Morgan, in contrast, firmly established that a district
court in such a proceeding performs a deferential form of review,
governed by traditional principles of administrative law. We reject
the Director’s position.[
3]
We think that the differences between
Butterworth and
Morgan are best explained by the fact
that the two cases addressed different circumstances.
Butterworth discussed the character of an
R. S. 4915 proceeding in which a disappointed patent
applicant challenged the Board’s denial of his application.
Although that discussion was not strictly necessary to
Butterworth’s holding it was also not the kind of
ill-considered dicta that we are inclined to ignore. The
Butterworth Court carefully examined the various pro-
visions providing relief from the final denial of a patent
application by the Commissioner of Patents to determine that the
Secretary of the Interior had no role to play in that process. 112
U. S., at 59–64. The Court further surveyed the
decisions of the lower courts with regard to the nature of an
R. S. 4915 proceeding and concluded that its view was
“the uniform and correct practice in the Circuit
Courts.”
Id., at 61. We note that this Court reiter-
ated
Butterworth’s well-reasoned interpretation of
R. S. 4915 in three later cases.[
4]
Morgan, on the other hand, concerned a
different situation from the one presented in this case. First,
Morgan addressed an interference proceeding. See 153
U. S., at 125 (emphasizing that “the question decided in
the Pat- ent Office is one between contesting parties as to
priority of invention”). Although interference proceedings
were pre- viously governed by R. S. 4915, they are now
governed by a separate section of the Patent Act, 35
U. S. C. §146, and therefore do not implicate
§145. In addition,
Morgan did not involve a proceeding
in which new evidence was presented to the District Court. See 153
U. S.
, at 122 (stating that the case “was
submitted, without any additional testimony, to the Circuit
Court”).
3
Because in this case we are concerned only
with §145 proceedings in which new evidence has been presented
to the District Court,
Butterworth rather than
Morgan
guides our decision. In
Butterworth, this Court observed
that an R. S. 4915 proceeding should be conducted
“according to the ordinary course of equity practice and
procedure” and that it should be “prepared and heard
upon all competent evidence adduced and upon the whole
merits.” 112 U. S., at 61. Likewise, we conclude that a
district court conducting a §145 proceeding may consider
“all com- petent evidence adduced,”
id., at 61,
and is not limited to considering only new evidence that could not
have been presented to the PTO. Thus, we agree with the Federal
Circuit that “Congress intended that applicants would be free
to introduce new evidence in §145 proceedings subject only to
the rules applicable to all civil actions, the Federal Rules of
Evidence and the Federal Rules of Civil Procedure.” 625
F. 3d, at 1331.
We also agree with the Federal Circuit’s
longstanding view that, “where new evidence is presented to
the district court on a disputed fact question, a
de novo finding will be necessary to take such evidence
into account together with the evidence before the board.”
Fregeau v.
Mossinghoff, 776 F.2d 1034, 1038 (1985).
As we noted in
Zurko, the district court acts as a
factfinder when new evidence is introduced in a §145
proceeding. 527 U. S., at 164. The district court must assess
the credibility of new witnesses and other evidence, determine how
the new evidence comports with the existing administrative record,
and decide what weight the new evidence deserves. As a logical
matter, the district court can only make these determinations
de novo because it is the first tribunal to hear the
evidence in question. Furthermore, a
de novo standard
adheres to this Court’s instruction in
Butterworth
that an R. S. 4915 proceeding be heard “upon the
whole merits” and conducted “according to the ordinary
course of equity practice and procedure.” 112 U. S., at
61.
D
Although we reject the Director’s
proposal for a stricter evidentiary rule and an elevated standard
of review in §145 proceedings, we agree with the Federal
Circuit that the district court may, in its discretion,
“consider the proceedings before and findings of the Patent
Office in deciding what weight to afford an applicant’s
newly-admitted evidence.” 625 F. 3d, at 1335. Though the
PTO has special expertise in evaluating patent applications, the
district court cannot meaningfully defer to the PTO’s factual
findings if the PTO considered a different set of facts.
Supra, at 8; cf.
Microsoft Corp. v.
i4i Ltd.
Partnership, 564 U. S. ___, ___ (2011) (slip op., at 19)
(noting that “if the PTO did not have all material facts
before it, its considered judgment may lose significant
force”). For this reason, we conclude that the proper means
for the district court to accord respect to decisions of the PTO is
through the court’s broad discretion over the weight to be
given to evidence newly adduced in the §145 proceedings.
The Director warns that allowing the district
court to consider all admissible evidence and to make
de novo findings will encourage patent applicants to
withhold evidence from the PTO intentionally with the goal of pre-
senting that evidence for the first time to a nonexpert judge.
Brief for Petitioner 23. We find that scenario unlikely. An
applicant who pursues such a strategy would be intentionally
undermining his claims before the PTO on the speculative chance
that he will gain some advantage in the §145 proceeding by
presenting new evidence to a district court judge.
IV
For these reasons, we conclude that 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. Moreover, 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. In light of these
conclusions, the Federal Circuit was correct to vacate the judgment
of the District Court, which excluded newly presented evidence
under the view that it “need not consider evidence
negligently submitted after the end of administrative
proceedings.” Civ. Action No. 03–0901, at 15, App. to
Pet. for Cert. 189a.
The judgment is affirmed, and the case is
remanded to the Court of Appeals for further proceedings consistent
with this opinion.
It is so ordered.