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Supreme Court Affirms Patent Applicants' Ability to Present New Evidence in Patentability Determinations

By Wendy Marsh

In a unanimous decision, the Supreme Court affirmed the decision of the Federal Circuit in Kappos v. Hyatt in holding that a patent applicant has no evidentiary restrictions beyond those imposed by the Federal Rules of Evidence and the Federal Rules of Civil Procedure, and therefore could present new evidence in a district court proceeding in support of patentability in a Section 145 action.  The Court further held that when a patent applicant presents evidence on a disputed question of fact, the district court must "make a de novo finding."  While the Court agreed with the Federal Circuit that the district court may consider whether the patent applicant had an opportunity to present the evidence to the United States Patent and Trademark Office (PTO) when determining the weight the evidence should be given, a finding that the evidence could have been previously presented did not affect the admissibility of the evidence, contrary to the PTO's asserted position.

When a patent applicant is denied a patent from the PTO, the applicant has the choice of either appealing the PTO's position to the Federal Circuit Court of Appeals under 35 USC § 141, or challenging the decision in district court under 35 USC § 145.  While an appeal to the Federal Circuit requires the applicant to rely only upon the record created before the PTO, the applicant can introduce new evidence in the § 145 district court proceeding.  In the Hyatt case, the PTO argued that the patent applicant was limited in the district court proceeding to introducing only that new evidence which could not have previously been introduced to the PTO during the agency proceeding and, further, that the PTO decision should be granted deference by the district court.

In its review, the Supreme Court considered the statutory language, general principles of administrative law, and the "evidentiary and procedural rules that were in effect when Congress enacted § 145 in 1952."  Following its review, the Supreme Court concluded that the district court in 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 Supreme Court therefore agreed with the Federal Circuit that Congress intended patent applicants to have the right 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."

In addressing the standard of review, Judge Thomas, who wrote the opinion on behalf of the Court, noted that while some consideration must be given to the PTO's role as the agency that grants patents, "the district court cannot meaningfully defer to the PTO's factual findings if the PTO considered a different set of facts."  The Court thus concluded that, "the proper means for the district court to accord respect to the 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."

Arguably, the PTO's position on the evidentiary issues in this case would have severely diminished any benefit that patent applicants could garner from the use of a § 145 proceeding in the patentability determination.  More particularly, a primary benefit of applicants using the § 145 option is their ability to introduce new evidence to the court which, for any number of reasons, was not presented to the PTO during the agency proceeding.  The Supreme Court's decision has arguably preserved patent applicants' ability to fully develop the patentability issues pertaining to their inventions, which are often not completely fleshed out at the time the case reaches the Patent Board of Appeals and Interferences, in which proceedings the applicants' ability to submit new evidence is  severely limited if not prohibited.



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