Source: http://www.jdsupra.com/legalnews/kappos-v-hyatt-kappos-v-hyatt-33434/
Timestamp: 2014-09-23 09:06:59
Document Index: 170937165

Matched Legal Cases: ['§145', '§131', '§134', '§141', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§4915', '§145', '§145', '§146', '§145', '§145', '§145', '§145', '§100', '§131', '§134', '§141', '§145', '§141', '§144', '§145', '§701', '§141', '§706', '§141', '§145', '§112', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§706', '§145', '§706', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§101', '§4915', '§145', '§145', '§145', '§145', '§146', '§145', '§145', '§145', '§145', '§141', '§145', '§145', '§145', '§145', '§145', '§145', '§145', '§17', '§145', '§145', '§145', '§145']

Kappos v Hyatt | Kappos v Hyatt | Bryan Beel - JDSupra
Kappos v HyattKappos v Hyatt
less- Explore: Administrative Procedure Act Evidence Hyatt Kappos Patents USPTO Tweet Send
There are no limitations on a patent applicant’s ability to introduce new evidence in a §145 proceeding beyond those already presentin 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.
Download PDF 1 (Slip Opinion) OCTOBER TERM, 2011 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as isbeing 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 beenprepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES Syllabus 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 mayfile an administrative appeal with the PTO’s Board of Patent Appeals and Interferences, §134. If the Board also denies the application, theapplicant may appeal directly to the Court of Appeals for the FederalCircuit 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, Hyattfiled 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 thePTO’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. 2 KAPPOS v. HYATT Syllabus Held: There are no limitations on a patent applicant’s ability to introduce new evidence in a §145 proceeding beyond those already presentin 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 deferentialstandard 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 findingswhen those findings are contradicted by new evidence. Moreover, the doctrine of administrative exhaustion?the primary purpose of whichis “the avoidance of premature interruption of the administrativeprocess,” McKart v. United States, 395 U. S. 185, 193?does not applybecause 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 RevisedStatute §4915 (R. S. 4915), remains largely unchanged in §145. Decisions interpreting R. S. 4915 thus inform this Court’s understandingof §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 ofhis 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 DistrictCourt, 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 Cite as: 566 U. S. ____ (2012) 3 Syllabus 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 theBoard. 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. _________________ _________________ Cite as: 566 U. S. ____ (2012) 1 Opinion of the Court NOTICE: This opinion is subject to formal revision before publication in thepreliminary print of the United States Reports. Readers are requested tonotify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in orderthat corrections may be made before the preliminary print goes to press. 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., grantsa 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 theDirector of the PTO in federal district court. In such a proceeding, the applicant may present evidence to thedistrict 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 applywhen considering new evidence. On this question, we holdthat the district court must make a de novo finding when new evidence is presented on a disputed question of fact. 2 KAPPOS v. HYATT Opinion of the Court In deciding what weight to afford that evidence, the district court may, however, consider whether the applicanthad an opportunity to present the evidence to the PTO. I The Patent Act of 1952 establishes the process by whichthe 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’sBoard 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 reviewthe PTO’s decision on the same administrative record that was before the PTO. §144. Thus, there is no opportunityfor the applicant to offer new evidence in such a proceeding. In Dickinson v. Zurko, 527 U. S. 150 (1999), we ad—————— 1On September 16, 2011, the President signed the Leahy-SmithAmerica Invents Act, 125 Stat. 284, into law. That Act made significant changes to Title 35 of the United States Code, some of which arerelated to the subject matter of this case. For example, the Act changedthe venue for §145 actions from the United States District Court for theDistrict of Columbia to the United States District Court for the East-ern District of Virginia, id., at 316, changed the name of the Boardof Patent Appeals and Interferences to the Patent Trial and AppealBoard, id., at 290, and changed the name of interferences to derivationproceedings, ibid. Neither party contends that the Act has any effecton the questions before us, and all references and citations in this opinion are to the law as it existed prior to the Act. Cite as: 566 U. S. ____ (2012) 3 Opinion of the Court dressed 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 permitsthe applicant to present new evidence to the district courtthat 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 acceptoral 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 theBoard, 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 specifi4 KAPPOS v. HYATT Opinion of the Court cation 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 additionalevidence submitted by Hyatt in the §145 proceeding, theevidence remaining before the District Court consistedentirely 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 thatstandard, the District Court granted summary judgmentto the Director. Hyatt appealed to the Federal Circuit. A divided panelaffirmed, holding that the APA imposed restrictions on theadmission of new evidence in a §145 proceeding and thatthe 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 Cite as: 566 U. S. ____ (2012) 5 Opinion of the Court 1336. We granted certiorari, 564 U. S. ___ (2011), and nowaffirm. 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 factual findings only if the new evidence clearly establishesthat the agency erred. Both of these arguments sharethe premise that §145 creates a special proceeding that isdistinct 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 administrativelaw 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 thetext 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 thatthe district court “may adjudge that such applicant isentitled 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 adjudicationshall authorize the Director to issue such patent on compliance with the requirements of law.” By its terms, §145 6 KAPPOS v. HYATT Opinion of the Court 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 thetext of §145, the Director argues that the statute shouldbe read in light of traditional principles of administrativelaw, 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 backgroundprinciples 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 orexpertise, 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 Cite as: 566 U. S. ____ (2012) 7 Opinion of the Court 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 toproperly 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 newevidence 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 anevidentiary 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 whenCongress 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 betraced 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 predeces8 KAPPOS v. HYATT Opinion of the Court sor, 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 expandedthat provision, making judicial review available whenever a patent was refused on any ground. Act of Mar. 3, 1839 (1839 Act), 5 Stat. 354. Pursuant to these statutes, any disappointed patent applicant could file a bill in equity to have the district court “adjudge” whether the applicantwas “entitled, according to the principles and provisionsof [the Patent Act], to have and receive a patent for hisinvention.” 1836 Act, 5 Stat. 124. In 1870, Congress amended the Patent Act again, adding intermediate layers of administrative review and introducing language describing the proceeding in the district court. 16 Stat. 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 thatcourt’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 —————— 2The Supreme Court of the District of Columbia was a trial courtcreated by Congress in 1863. Act of Mar. 3, 1863, ch. 91, 12 Stat. 762. Although the court was generally one of first instance, it also functioned as an appellate court when it sat en banc. Voorhees, The District of Columbia Courts: A Judicial Anomaly, 29 Cath. U. L. Rev. 917, 923 (1980). Cite as: 566 U. S. ____ (2012) 9 Opinion of the Court 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 ofColumbia, 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, bothparties agree that R. S. 4915 and the judicial decisions interpreting that statute should inform our understandingof §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 thePatent-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 10 KAPPOS v. HYATT Opinion of the Court cases, which similarly described R. S. 4915 proceedings as “altogether independent” from the hearings before thePatent 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 confronteda case involving proceedings under R. S. 4915. 153 U. S. 120. There, a party challenged a factual finding by thePatent 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 anindependent civil action, but as “something in the natureof a suit to set aside a judgment.” Id., at 124. Consistent with that view, the Court held that the agency’s findingsshould not be overturned by “a mere preponderance of evidence.” Ibid. Viewing Butterworth and Morgan together, one mightperceive 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 ofa patent application. Morgan, on the other hand, appearsto 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 Butter11 Cite as: 566 U. S. ____ (2012) Opinion of the Court worth “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 sucha 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 denialof 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 determinethat 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 tothe nature of an R. S. 4915 proceeding and concluded thatits 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 —————— 3Both parties cite additional cases from the lower courts that theyclaim support their view of the statute, but these cases are too diverse to support any firm inferences about Congress’ likely intent in enacting§145. 4In Gandy v. Marble, 122 U. S. 432 (1887), the Court described an R. S. 4915 proceeding as “a suit according to the ordinary course of equity practice and procedure” rather than a “technical appeal fromthe Patent Office.” Id., at 439 (citing Butterworth, 112 U. S., at 61). Likewise, in In re Hien, 166 U. S. 432 (1897), the Court distinguishedan R. S. 4915 proceeding from the “‘technical appeal from the Patent 12 KAPPOS v. HYATT Opinion of the Court Morgan, on the other hand, concerned a different situation from the one presented in this case. First, Morganaddressed 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 ofinvention”). Although interference proceedings were previously governed by R. S. 4915, they are now governedby a separate section of the Patent Act, 35 U. S. C. §146,and therefore do not implicate §145. In addition, Morgandid 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 §145proceedings in which new evidence has been presented to the District Court, Butterworth rather than Morganguides 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 competent 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 FederalCircuit that “Congress intended that applicants would befree to introduce new evidence in §145 proceedings subjectonly to the rules applicable to all civil actions, the Federal —————— Office’” authorized under R. S. 4911, the predecessor to current §141. Id., at 439 (quoting Butterworth, supra, at 61). And, finally, in Hoover Co. v. Coe, 325 U. S. 79 (1945), the Court cited Butterworth to supportits description of an R. S. 4915 proceeding as a “formal trial.” 325 U. S., at 83, and n. 4. 13 Cite as: 566 U. S. ____ (2012) Opinion of the Court Rules of Evidence and the Federal Rules of Civil Procedure.” 625 F. 3d, at 1331. We also agree with the Federal Circuit’s longstandingview that, “where new evidence is presented to the districtcourt on a disputed fact question, a de novo finding will benecessary to take such evidence into account together withthe 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 thewhole merits” and conducted “according to the ordinarycourse 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 thatthe 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 newlyadmitted evidence.” 625 F. 3d, at 1335. Though the PTOhas special expertise in evaluating patent applications,the district court cannot meaningfully defer to the PTO’sfactual 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 14 KAPPOS v. HYATT Opinion of the Court considered judgment may lose significant force”). For this reason, we conclude that the proper means for the districtcourt to accord respect to decisions of the PTO is throughthe 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 courtto consider all admissible evidence and to make de novo findings will encourage patent applicants to withholdevidence 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 adistrict court judge. IV For these reasons, we conclude that there are no limitations on a patent applicant’s ability to introduce newevidence 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 courtmust 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 FederalCircuit 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 tothe Court of Appeals for further proceedings consistentwith this opinion. It is so ordered. _________________ _________________ Cite as: 566 U. S. ____ (2012) 1 SOTOMAYOR, J., concurring 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 SOTOMAYOR, with whom JUSTICE BREYER joins,concurring. As the Court today recognizes, a litigant in a 35 U. S. C.§145 proceeding is permitted to introduce evidence not presented to the Patent and Trademark Office (PTO)“‘according to the ordinary course of equity practice and procedure.’” Ante, at 9 (quoting Butterworth v. United States ex rel. Hoe, 112 U. S. 50, 61 (1884)). Dating backto §145’s original predecessor, Congress contemplated that courts would manage such actions “according to the course and principles of courts of equity.” Act of July 4, 1836, ch. 357, §17, 5 Stat. 124. And this Court and other courts have acknowledged and applied that principle on numerous occasions. See, e.g., Gandy v. Marble, 122 U. S. 432, 439 (1887) (describing Rev. Stat. 4915 (R. S. 4915) proceeding as “a suit according to the ordinary course ofequity practice and procedure”); In re Hien, 166 U. S. 432, 438 (1897) (same); In re Squire, 22 F. Cas. 1015, 1016 (No.13,269) (CC ED Mo. 1877) (in an R. S. 4915 proceeding,the parties were “at liberty to introduce additional evidence” under “the rules and practice of a court of equity”); ante, at 10, 12, n. 4 (citing same cases). Consistent with ordinary equity practice and procedure, 2 KAPPOS v. HYATT SOTOMAYOR, J., concurring there may be situations in which a litigant’s conductbefore the PTO calls into question the propriety of admitting evidence presented for the first time in a §145 proceeding before a district court. The most well-known example was presented in Barrett Co. v. Koppers Co., 22 F. 2d 395, 396 (CA3 1927), a case in which the Barrett Company, during proceedings before the Patent Office, “expressly refused to disclose and to allow their witnesses to answer questions” essential to establishing the priorityof its invention. After the Patent Office ruled against it,the Barrett Company attempted to present in a subsequentR. S. 4915 proceeding “the very subject-matter concerning which . . . witnesses for the [patent] application wereasked questions and the Barrett Company forbade them to answer.” Id., at 396. The Third Circuit understandably found the Barrett Company estopped from introducingevidence that it had “purposely” withheld from prior factfinders, lest the company be allowed “to profit by [its] own . . . wrong doing.” Id., at 397. See also Dowling v. Jones, 67 F. 2d 537, 538 (CA2 1933) (L. Hand, J.) (describing Barrett as a case in which “the Third Circuit refused to consider evidence which the inventor had deliberatelysuppressed”).For the reasons the Court articulates, §145 proceedingsare not limited to the administrative record developed before the PTO and applicants are entitled to present new evidence to the district court. Accordingly, as JudgeHand suggested, a court’s equitable authority to exclude evidence in such proceedings is limited, and must beexercised with caution. See Dowling, 67 F. 2d, at 538 (describing as “doubtful” the proposition that a court shouldexclude evidence that was “not suppressed, but merelyneglected” before the Patent Office). Thus, when a patent applicant fails to present evidence to the PTO due toordinary negligence, a lack of foresight, or simple attorneyerror, the applicant should not be estopped from presentCite as: 566 U. S. ____ (2012) 3 SOTOMAYOR, J., concurring ing the evidence for the first time in a §145 proceeding.Because there is no suggestion here that the applicant’sfailure to present the evidence in question to the PTO was anything other than the product of negligence or a lack of foresight, I agree that the applicant was entitled topresent his additional evidence to the District Court. But I do not understand today’s decision to foreclose a districtcourt’s authority, consistent with “‘the ordinary course ofequity practice and procedure,’” ante, at 13 (quoting Butterworth, 112 U. S., at 61), to exclude evidence “deliberately suppressed” from the PTO or otherwise withheld inbad faith. For the reasons set out by the Court, see ante, at 13–14, an applicant has little to gain by such tactics; suchcases will therefore be rare. In keeping with longstanding historical practice, however, I understand courts to retain their ordinary authority to exclude evidence from a §145proceeding when its admission would be inconsistent with regular equity practice and procedure. With those observations, I join the Court’s opinion in full.
Topics: Administrative Procedure Act, Evidence, Hyatt, Kappos, Patents, USPTO
© Bryan Beel | Attorney Advertising Don't miss a thing! Build a custom news brief: Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…
Follow Bryan Beel: