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Some New Evidence May Be Presented in the District Court in an Action Under 35 U.S.C. § 145

August 11, 2009

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Last Month at the Federal Circuit - September 2009

Judges: Michel (author), Dyk, Moore (dissenting)

[Appealed from: D.D.C., Judge Kennedy]

In Hyatt v. Doll, No. 07-1066 (Fed. Cir. Aug. 11, 2009), the Federal Circuit affirmed the district court’s grant of SJ sustaining the decision of the Board, which rejected seventy-nine claims of Gilbert P. Hyatt’s U.S. Patent Application Serial No. 08/471,702 (“the ’702 application”) for lack of support by adequate written description. After examining the legislative history and persuasive case law concerning the relevant statute—35 U.S.C. § 145—the Court concluded that the district court properly excluded evidence offered by the inventor because he had a duty to disclose the evidence to the PTO during prosecution but willfully refused.

Hyatt’s application for computer memory architecture is one of several iterations of continuations or CIPs. After several rounds of amendments, Hyatt cancelled all original claims and added 117 new claims, all of which the examiner eventually rejected in a final office action, citing lack of adequate written description and enablement, among other deficiencies.Among Hyatt’s notable arguments in his appeal to the Board were: “The ’112-1 rejections are prima facie erroneous because the disclosure is presumptively valid and correct,” and “With the extensive memory disclosure (e.g., Spec. at 99-135) and processor disclosure (e.g., Spec. at 87-98, 214-36) in the instant application, it is unbelievable that the Examiner would object to the disclosure of memory and processor features.” Slip op. at 7. Hyatt included in his appeal a table purporting to show support in the specification. The four-column table listed some claim terms under “Representative Terminology,” notes the number of occurrences for each term in either the specification or raw source code, and “Representative Cites Page(s).” With two exceptions, Hyatt did not correlate any evidence submitted with any specific claim limitations.

After the Board affirmed some of the examiner’s rejections for lack of adequate written description, Hyatt provided extensive new arguments and citations to the specification in his request for rehearing. The Board denied his request, holding that the new arguments and citations could and should have been presented during the original appeal. In the ensuing district court action under § 145, which provides for the appeal of ex parte proceedings in the PTO to the District of Columbia district court, Hyatt filed his own declaration in support of his opposition to the Director’s motion for SJ to affirm the Board’s decision. The district court excluded Hyatt’s declaration and granted SJ to the Director.

Finding a novel issue in the question of whether new evidence is admissible in an action under § 145, the Court first analyzed the legislative origins of the statute and the case law regarding admissibility of evidence. The Court compared the statute in question to its “parallel provision,” § 146 governing interferences before the Board. It found that although Congress amended § 146 in 1927 to give weight to PTO proceedings but was silent with regard to evidence under § 145, the same weight should apply in § 145 proceedings. Acknowledging that Supreme Court cases over the past century establish that new evidence may be submitted in cases under R.S. § 4915 (a pre-1952 predecessor to §§ 145 and 146), the Court looked to case law in other circuits for guidance on what new evidence may be admissible under § 145. It found that after amendments in 1927, no circuit court allowed a de novo trial under § 4915. Finding no standard in the District of Columbia district court for excluding evidence not submitted in PTO proceedings, the Court found that the case law shows that “the District of Columbia district court will always exclude evidence that was not presented to the PTO due to bad faith or gross negligence and sometimes if the failure to present it was negligent.” Id. at 34. The Court concluded that “it has been the general practice of federal courts for over eighty years in certain circumstances to exclude evidence which a party could and should have introduced before the Patent Office but did not despite an obligation to do so.” Id.

Next, the Court examined the application of the APA, noting that the Supreme Court in Dickinson v. Zurko, 527 U.S. 150, 165 (1999), held that the Federal Circuit must review fact-finding by the PTO using the framework set forth in the APA. Applying the APA, the Court held that § 145 actions do not meet the APA’s provisions for de novo review of factual issues. It also held that § 145 does not specifically provide for a de novo trial in the district court. The Court concluded that “[a] district court is obliged to accept the facts as found by the PTO unless not supported by substantial evidence.” Slip op. at 46 (citing Mazzari v. Rogan, 323 F.3d 1000, 1005 (Fed. Cir. 2003)). Further, “the district court must defer to the PTO’s fact-finding except where appropriately admitted new evidence conflicts with a fact found by the PTO or presents a new factual issue that the PTO did not consider.” Id. (citing Mazzari, 323 F.3d at 1004).

Applying the facts of the instant case, the Court held that Hyatt was obligated to respond to the examiner’s written description rejection by explaining where in the specification support for each of the limitations could be found. Because Hyatt could have done so either in response to the office action rejecting the claims, in his initial appeal to the Board, or anytime in between, the Court found that he had willfully refused to provide evidence in his possession in response to a valid action by the examiner and affirmed the district court. The Court also affirmed the district court’s rejection of Hyatt’s arguments that his refusal to present the evidence should not bar him from presenting his declaration in the district court. First, it found that the Board’s rejections were either identical in “thrust” to the examiner’s or responsive to new arguments raised by Hyatt in his appeal brief. Next, it rejected Hyatt’s argument that the timing of an earlier, related Federal Circuit decision, Hyatt v. Dudas, 492 F.3d 1365 (Fed. Cir. 2007), excused Hyatt’s failure to present evidence in this case, because Hyatt was on notice that he had an obligation to rebut the examiner’s rejections. The Court also agreed that the Board’s reversal of some of the examiner’s rejections did not establish that Hyatt acted reasonably.

The Court disavowed adopting a sweeping exclusionary rule, summarizing its holding narrowly: “[W]e have merely reached the unremarkable conclusion that it is unreasonable to believe Congress intended to allow a patent applicant in a § 145 action to introduce new evidence with no regard whatsoever as to his conduct before the PTO, and that, specifically, Congress did not intend that evidence owed, requested and willfully withheld from the PTO must nevertheless be admitted in a § 145 action.” Slip op. at 56 (footnote omitted).

In a dissenting opinion, Judge Moore emphasized that Congress contemplated a patent applicant’s fundamental right to a “civil action” under the circumstances, not merely an appeal, which may be brought under 35 U.S.C. § 141. In a civil action, the dissent points out, only the Federal Rules of Evidence govern the admissibility of evidence. Further, Judge Moore objected to the majority’s characterizations of Hyatt’s evidence and noted that the district court found it only negligent, not willfully withheld.

Summary authored by Mai-Trang Dang, Esq.