566 U.S. 431 (2012), 10-1219, Kappos v. Hyatt

Docket Nº:10-1219
Citation:566 U.S. 431, 132 S.Ct. 1690, 182 L.Ed.2d 704, 80 U.S.L.W. 4333, 102 U.S.P.Q.2d 1337, 23 Fla.L.Weekly Fed. S 275
Opinion Judge:Thomas Justice.
Party Name:DAVID J. KAPPOS, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, PATENT AND TRADEMARK OFFICE, Petitioner v. GILBERT P. HYATT
Attorney:Ginger D. Anders argued the cause for petitioner. Aaron M. Panner argued the cause for respondent.
Judge Panel:Thomas, J., delivered the opinion for a unanimous Court. Sotomayor, J., filed a concurring opinion, in which Breyer, J., joined, post, p. ___. CONCUR BY: Sotomayor Justice Sotomayor, with whom Justice Breyer joins, concurring.
Case Date:April 18, 2012
Court:United States Supreme Court
 
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Page 431

566 U.S. 431 (2012)

132 S.Ct. 1690, 182 L.Ed.2d 704, 80 U.S.L.W. 4333, 102 U.S.P.Q.2d 1337, 23 Fla.L.Weekly Fed. S 275

DAVID J. KAPPOS, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, PATENT AND TRADEMARK OFFICE, Petitioner

v.

GILBERT P. HYATT

No. 10-1219

United States Supreme Court

April 18, 2012

Argued January 9, 2012.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT.

SYLLABUS

[182 L.Ed.2d 708] [132 S.Ct. 1692] Under the Patent Act of 1952, if a Patent and Trademark 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. 437-446, 182 L.Ed.2d, at 712-717.

(a) Section 145, by its express terms, neither imposes unique evidentiary limits in district court proceedings nor establishes a heightened

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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 [182 L.Ed.2d 709] 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, 193, 89 S.Ct. 1657, 23 L.Ed.2d 194--does not apply because the PTO process is complete by the time a § 145 proceeding occurs. Pp. ___ - ___, 182 L.Ed.2d, at 712-713.

(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 [132 S.Ct. 1693] of § 145. Both Butterworth v. United States ex rel. Hoe, 112 U.S. 50, 5 S.Ct. 25, 28 L.Ed. 656, 1884 Dec. Comm'r Pat. 429, and Morgan v. Daniels, 153 U.S. 120, 14 S.Ct. 772, 38 L.Ed. 657, 1894 Dec. Comm'r Pat. 285, 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. ___ - ___, 182 L.Ed.2d, at 713-717.

(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. ___ - ___, 182 L.Ed.2d, at 717.

625 F.3d 1320, affirmed and remanded.

Ginger D. Anders argued the cause for petitioner.

Aaron M. Panner argued the cause for respondent.

Thomas, J., delivered the opinion for a unanimous Court. Sotomayor, J., filed a concurring opinion, in which Breyer, J., joined, post, p. ___.

OPINION

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Thomas Justice.

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 [182 L.Ed.2d 710] action against the Director of the PTO in federal district court. In such a proceeding, the applicant may present evidence [132 S.Ct. 1694] 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

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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 examiner 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

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Dickinson v. Zurko, 527 U.S. 150, 119 S.Ct. 1816, 144 L.Ed.2d 143 (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...

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