Source: https://patentlawcenter.pli.edu/2010/11/23/federal-circuit-keeps-door-open-for-new-evidence-in-section-145-actions/
Timestamp: 2019-10-20 11:35:25
Document Index: 321916430

Matched Legal Cases: ['§ 145', '§ 145', '§ 145', '§ 145', '§ 141', '§ 145', '§ 141', '§ 1', '§ 41']

Patent Law Practice Center - PLI – Federal Circuit Keeps Door Open For New Evidence In Section 145 Actions
Mr. Hyatt appealed to the Federal Circuit, arguing that § 145 provides for de novoreview of the USPTO’s refusal to grant a patent, so that an applicant can submit any new evidence as long as it is permitted by the Federal Rules of Evidence. The USPTO countered that a § 145 action is a review of agency action on record before the agency, and evidence that was not submitted during the USPTO proceedings due to negligence should be excluded.
In a decision authored by then-Chief Judge Michel and joined by Judge Dyk (Judge Moore dissented), the panel determined that a § 145 action is not a de novoproceeding. The panel reviewed cases applying predecessor and parallel statutes, and found consensus for excluding evidence that was not submitted to the USPTO due to “fraud, gross negligence, bad faith, or intentional suppression.” The panel considered the district court’s “negligence” rationale, but affirmed the exclusion of Mr. Hyatt’s declaration because “Hyatt willfully refused to provide evidence in his possession in response to a valid action by the examiner.”
The Court tempered this holding, noting that “the district court as factfinder may give less weight to evidence introduced by an applicant in a § 145 action if the district court questions its credibility or reliability,” such as may occur with “late-produced evidence,” “inconsistent statements,” or “new recollections of previously forgotten events.”
In reaching its decision, the en banc majority reviewed the plain language of the statute and its legislative history, and concluded that “Congress intended to provide for a civil action in which an application would be free to introduce new evidence.” However, the Court did not depart from the general rule that “parties may not raise issues in the district court that were not raised during the proceedings before the Patent Office or by the Board’s final decision,” but clarified that “this rule does not preclude parties from introducing additional evidence as to issues that were raised before the Patent Office.”
Judge Newman’s and Judge Dyk’s Dissents
Judge Newman joined the holding that “new evidence may be provided in a civil action,” but disagreed with the holding that “when no new evidence is provided, the findings and rulings of the PTO receive the same deferential treatment in the district court as would apply if the cause were not a civil action under Section 145, but instead were an Administrative Procedure Act direct appeal to the Federal Circuit under 35 USC § 141“. In her dissent, Judge Newman argues that the statutory scheme is such that § 145 provides de novo review by the district court, while § 141 provides APA-type review by the Federal Circuit. Judge Newman thus finds that the Court’s holding creates a “redundant procedure” by which the USPTO’s rulings are first reviewed deferentially by the district court, and then subject to further deferential review on appeal. For example, Judge Newman believes that the district court should be able to assess prior art references de novo, even if the applicant does not introduce new evidence on their meaning.
Judge Dyk (joined by Judge Gajarsa) similarly dissented from the majority decision, noting: “In my view today’s majority decision reflects a remarkable departure from settled principles of administrative law.” Criticizing the majority holding for “craft[ing] special rules for patent cases,” Judge Dyk notes:
The Court’s ruling arguably squares with the realities of patent prosecution. As a practical matter, an applicant only has one opportunity to introduce new evidence as a matter of right, and that comes very early in prosecution, after the first Office Action on the merits. After that, an applicant’s right to introduce new evidence is limited by 37 CFR § 1.116 to situations where the applicant can make a “showing of good and sufficient reasons why the … evidence is necessary and was not earlier presented.” Once an application is on Appeal to the Board, 37 CFR § 41.33 is even more restrictive, permitting new evidence only if “the examiner determines that the … evidenceovercomes all rejections under appeal and that a showing of good and sufficient reasons why the … evidence is necessary and was not earlier presented has been made.”
Applying these standards, it is not likely that Mr. Hyatt’s declaration would have been accepted on appeal. While the declaration addressed the rejections that Board sustained, it did not address the rejections that the Board reversed. Thus, from the Examiner’s perspective, Mr. Hyatt’s declaration would not have overcome “all rejections under appeal.”
It remains to be seen how often Section 145 will be used in view of this holding given that district court proceedings are expensive and unfamiliar to most patent applicants. In the vast majority of cases, applicants who want to present new evidence to support their patent applications do so within the USPTO, by filing aRequest for Continued Examination or continuation application. On the other hand, with the growing backlog at the USPTO, applications face an average examination pendency of three years and an average appeal pendency of two years. Applicants who need faster resolution of patentability issues would be fully justified in seeking review (and relief) in the district court, and may do so more frequently now that the court has held the door open for new evidence to support patentability.
Tags: board of patent appeals, Federal Circuit, Hyatt v. Kappos, Patent Prosecution, patentability, section 145, USPTO
This entry was posted on Tuesday, November 23rd, 2010 at 16:40	and is filed under Board of Patent Appeals & Interferences, Federal Circuit Cases, Patent Issues, Patent Prosecution, posts, USPTO. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
One Response to “Federal Circuit Keeps Door Open For New Evidence In Section 145 Actions”
November 30, 2010 at 01:07
Though things didn’t turn out so well for Hyatt at the district court, the result at the CAFC is a boon for applicants in this type of patent litigation. Plus, the decision makes sense; appealing a BPAI rejection to the district court (rather than going right to the CAFC) would be a redundant money-waster, were it not for the option of presenting new evidence.