Federal Circuit Issues en banc Ruling in Hyatt v. Kappos


The Federal Circuit recently issued an en banc ruling setting forth the standard governing the admissibility of evidence in a district court action filed under 35 USC §145 by a patent applicant who is seeking to challenge a decision by the USPTO's Board of Patent Appeals and Interferences ("BPAI") denying a patent. In Hyatt v. Kappos, No.2007-1066 (Fed. Cir. Nov. 8, 2010) the Federal Circuit held that the admissibility of evidence in §145 actions is to be governed by the same rules on admissibility of evidence as in any civil action. Significantly, the Federal Circuit rejected the more stringent admissibility standard that the district court had applied, which excluded evidence that the applicant could have submitted to the examiner during prosecution, but did not. Consequently, the Court of Appeals clarified that in §145 actions, the applicant may submit new evidence that was never before considered by the USPTO examiner or the BPAI. 

By way of background, a patent applicant who is unsuccessful in obtaining a patent during prosecution may challenge an adverse final rejection by appeal to the BPAI. If the BPAI sustains the rejection in whole, or in part, the applicant then may choose one of two paths for judicial review applied directly to the Federal Circuit (in accordance with 35 U.S.C. §141), or challenge the USPTO's determination in U.S. District Court for the District of Columbia pursuant to 35 U.S.C. § 145. If the applicant chooses the latter approach, the administrative record before the USPTO and the BPAI becomes evidence in the case, but the applicant also has the opportunity to submit new evidence and have witnesses testify in person before the court.

The question on appeal centered on to what extent new evidence is admissible.The issue in Hyatt concerned whether the new evidence, a declaration newly submitted in response to the USPTO Director's summary judgment motion and citing to the patent specification to rebut the Examiner's final rejection, was properly submitted and admissible in the district court action, such that the district court would then be required to perform a de novo review of the old and new evidence in deciding whether to sustain the rejection on summary judgment. The court found that the district court had improperly excluded the declaration, and remanded for a determination by the district court.

Writing for a majority of the Federal Circuit, Judge Moore rejected the USPTO Director's argument that only "new evidence that could not reasonably have been provided to the agency in the first instance" is admissible in a §145 action as without basis in the statute or in the antecedent practice. However, Judge Moore's opinion cautions that while the proceedings before the Patent Office do not limit the admissibility of new evidence in the district court, they may be considered by the district court if they cast doubt on the reliability of late-produced evidence, as with inconsistent statements or new recollections of previously forgotten events. 

While the Hyatt en banc decision addresses a form of action that arises only in a patent prosecution context, and is not all that common, it nonetheless liberalizes the ability of an applicant to challenge adverse BPAI rulings, and therefore is an important new development in IP practice.