WASHINGTON, D.C. - (Mealey's) Federal
district courts deciding an adverse patentability ruling by the U.S. Patent and
Trademark Office (PTO) should apply a deferential standard of review, an
attorney for the U.S. government told the U.S. Supreme Court yesterday (David
J. Kappos v. Gilbert P. Hyatt, No. 10-1219, U.S. Sup.; See 11/7/11, Page
According to Ginger D.
Anders, assistant to the solicitor general, the Federal Circuit U.S. Court of
Appeals erroneously applied de novo review to respondent Gilbert P.
Hyatt's challenge of the PTO's rejection of his patent application for a data
compression system that stores and processes image information.
If allowed to stand, Anders
warned, the Federal Circuit ruling "would permit applicants to withhold
evidence from the PTO" in "all" actions brought under 35 U.S. Code Section 145.
Hyatt's initial application
was rejected on numerous grounds, including written description, enablement,
double patenting, anticipation and obviousness. He appealed to the Board
of Patent Appeals and Interferences, which largely affirmed the examiner's
rejection. Hyatt was denied rehearing and ultimately filed the instant
lawsuit in the U.S. District Court for the District of Columbia pursuant to
Section 145, which allows applicants dissatisfied with a board decision to sue
as an alternative to a direct appeal to the Federal Circuit.
The PTO moved for summary
judgment, leading Hyatt to submit a declaration explaining that one of ordinary
skill in the art would have found an adequate written description for each of
the rejected claims. The District Court ruled that Hyatt had provided no
adequate explanation for failing to submit his declaration to the PTO during
prosecution, that his failure was "negligent" and that the evidence would be
disregarded. The court granted summary judgment against Hyatt, and he
appealed to the Federal Circuit.
On Aug. 11, 2009, a divided Federal Circuit panel affirmed, holding that the
District Court was within its discretion to exclude evidence if it concludes
that the evidence was not submitted to the PTO due to fraud, gross negligence,
bad faith or intentional suppression. The Federal Circuit, in Hyatt v.
Doll (576 F.3d 1246, 1275 [Fed. Cir. 2009] [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law]; See 8/17/09, Page 15), said the District Court
properly disregarded Hyatt's declaration because he had "willfully refused to
provide evidence in his possession in response to a valid action by the
A dissenting judge, however,
wrote that the statute places no limits on the type of evidence that is
admissible in a Section 145 action and, therefore, the standard Federal Rules
of Evidence ought to govern. Hyatt sought and won rehearing en banc
and, in November 2010, the full Federal Circuit overturned the panel's
decision, finding that the statute "provides no indication that this civil
action is somehow different from a customary civil action." Nothing in
Section 145 provides that unique rules of evidence, separate from or
supplementary to the Federal Rules of Evidence that apply to all civil actions,
control to limit an applicant's ability to introduce new evidence before the
district court, according to the appellate panel.
In remanding the case on grounds that the District Court abused its discretion
in excluding Hyatt's declaration, the Federal Circuit held that the legislative
history of Section 145 and its predecessor "shows that Congress intended to
provide for a civil action in which an applicant would be free to introduce new
evidence." Petitioner David J. Kappos, the new director of the PTO, filed
a petition for writ of certiorari, which was granted in June.
Justice Ruth Bader Ginsburg singled out the dual modes of appeal as "one
of the problems" with the government's argument, telling Anders "it sounds very
strange to have two proceedings - one where you go directly to the Federal
Circuit under 101 - 141, and
then this other one where you go to the district court."
"Why would Congress create
two judicial review routes, one in district court, reviewable in the Federal
Circuit, the other directly in the Federal Circuit, if there's no difference,
that is, if in both of them it is not de novo review, it is review of
what the agency did under the ordinary standard for reviewing agency
action? What's different about the 145 proceeding?" Justice Ginsburg
When Anders replied that a
Section 145 proceeding allows an applicant to present new evidence that
couldn't be presented to the PTO, like an oral account of all previously
written affidavits, Justice Elena Kagan pressed the issue. "But to the
extent the substance of that testimony was something that he could have brought
to the PTO, that testimony in your view would be out of bounds?" Justice Kagan
inquired, leading Anders to answer in the affirmative, absent a "reasonable
justification" for withholding the evidence during the application process.
Another category of new
evidence cited by Anders as allowable in a Section 145 proceeding includes
"evidence that has a temporal component," such as evidence "that develops only
slowly or that might arise very late in the process." To treat Section
145 as an entirely de novo proceeding "that allows any new evidence that
the applicant failed without cause to present to the PTO" has "no evident
policy justification" from Congress, however, Anders stated.
Aaron M. Panner, arguing on
behalf of Hyatt, urged the High Court to uphold the Federal Circuit.
"Section 145 does
not follow the modern norm of on-the-record review. Such review is
afforded under sections 141 to 144. And no principle of administrative
law supports the government's 'no opportunity' standard in situations where
Congress has authorized the trial de novo to obtain relief from adverse
agency action," Panner stated.
John G. Roberts expressed skepticism, however, noting that under Hyatt's interpretation,
no applicant would proceed under Section
141. Justice Ginsburg later asked Panner whether, in Panner's view,
there are "any limits" on the new evidence that can be produced under Section
"The standard . . . which we
think is supported . . . is one that would permit the introduction of evidence
as the Federal Circuit said consistent with the rules of evidence in civil
procedure. That's why principles of estoppel which are reflected
in ordinary equity practice, not just administrative review context, would be
applicable," Panner said.
Kappos is represented by
Anders, of the U.S. Department of Justice in Washington. Panner is of
Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington.
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