Supreme Court Rejects Deference To PTO In 'Hyatt'

On April 18, 2012, the Supreme Court of the United States affirmed the Court of Appeals for the Federal Circuit and clarified the evidentiary rules and procedures for a 35 U.S.C. § 145 proceeding before a district court. Kappos v. Hyatt, 560 U.S. ___ (2012). Specifically, the Court held that a patent applicant's ability to introduce new evidence is not limited in a section 145 proceeding beyond those limitations already imposed by the Federal Rules of Evidence and Civil Procedure. Moreover, when new evidence is introduced, a district court must review that new evidence de novo and in doing so can take into account both the new evidence and the administrative record before the Patent and Trademark Office (PTO). Justice Thomas delivered the unanimous opinion of the Court, with Justice Sotomayor filing a concurring opinion, in which Justice Breyer joined.

If a patent applicant is dissatisfied with the decision of the Board of Patent Appeals and Interferences (BPAI), then the applicant may either appeal to the Federal Circuit, or, pursuant to section 145, file a civil action against the Director of the PTO to obtain a patent. In this case, Gilbert Hyatt filed a patent application in 1995 including 117 claims, all of which were rejected by the examiner for lack of an adequate written description. Hyatt initially appealed the examiner's decision to the BPAI, and the BPAI approved 38 claims, but denied the rest. Needless to say, Mr. Hyatt was dissatisfied.

Hyatt then filed a civil action under 35 U.S.C. § 145 against the Director of the PTO at the district court rather than an appeal under 35 U.S.C. § 141 directly to the United States Court of Appeals for the Federal Circuit. In the district court action, Hyatt filed a written declaration identifying portions of the application that he asserted were supported by the claims— evidence that was not before the PTO. The district court determined that it could not consider Hyatt's declaration because applicants are "precluded from presenting new issues, 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. D.C. Sept. 30, 2005), p. 9. Applying the deferential substantial evidence standard of the Administrative Procedures Act (APA) to the BPAI's findings, the district court then granted summary judgment in favor of the Director. Hyatt appealed to the Federal Circuit.

Initially, a divided panel...