Supreme Court Rules in Kappos v. Hyatt

April 18, 2012. The Supreme Court issued its opinion in Kappos v. Hyatt, regarding procedure in the District Court when a patent applicant whose claims have been denied by the U.S. Patent and Trademark Office's (USPTO) examiner files an action under 35 U.S.C. § 145.

The Supreme Court held that the patent applicant may submit evidence to the District Court not submitted to the patent examiner, and that there are no evidentiary restrictions.

Section 145 provides, in full, as follows: "An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the Eastern District of Virginia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant."

Gilbert Hyatt filed a patent application that, as amended, included 117 claims. The USPTO's patent examiner denied each claim for lack of an adequate written description. Hyatt appealed the examiner's decision to the USPTO's Board of Patent Appeals and Interferences (BPAI), which eventually approved 38 claims, but denied the rest.

Hyatt then filed a Section 145 action in U.S. District Court (DC) against David Kappos' predecessor as Director of the USPTO. The District Court granted summary judgment to the USPTO Director. Hyatt appealed to the U.S. Court of Appeals (FedCir), which reversed. See, November 8, 2010, en banc opinion, which is also reported at 625 F.3rd 1320.

David KapposKappos (at right) then filed a petition for writ of certiorari with the Supreme Court. See, petition, merits brief, and reply brief.

The Supreme Court wrote in its opinion that in a Section 145 action, "the applicant may present evidence to the district 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."

The Supreme Court held that "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 apply when considering new evidence."

The Supreme Court held that "that the district court must make a de novo finding when new evidence is presented on a disputed question of fact. In deciding what weight to afford that evidence, the district court may, however, consider whether the applicant had an opportunity to present the evidence to the PTO."

Justice Clarence Thomas wrote the opinion of the Court. Justice Sotomayor wrote a concurring opinion, joined by Justice Breyer.

Sotomayor wrote that "when a patent applicant fails to present evidence to the PTO due to ordinary negligence, a lack of foresight, or simple attorney error, the applicant should not be estopped from presenting the evidence for the first time in a §145 proceeding. ... But I do not understand today’s decision to foreclose a district court's authority, consistent with ``‘the ordinary course of equity practice and procedure,’´´ ... to exclude evidence ``deliberately suppressed´´ from the PTO or otherwise withheld in bad faith."

Intel, Microsoft, Nvidia and Yahoo filed a amicus curiae brief in this case in which they argued that the District Court should be allowed to preclude new evidence that reasonably should have been introduced at the USPTO.

They warned about delay and gamesmanship in the patent application process.

They wrote that "Gilbert Hyatt filed his initial patent application in 1975. It should have issued in due course, run its term, and expired over a decade ago. But he waited 20 years to introduce the current set of claims, ignored multiple requests by the examiner for the relevant information, and ultimately delayed for 9 years in presenting the evidence that he now alleges is the difference-maker for patentability. The Federal Circuit's decision permits and indeed encourages such needless delay, providing opportunities for gaming the system, even though Section 145 does not otherwise support such a result, and case law and good policy reject it."

Verizon, Google, HP and HTC submitted an amicus curiae brief. They argued that "The Court should decide this case on the logically antecedent, dispositive, and important basis that the written-description requirement presents a question of law, not fact. The government argues that a disappointed patent applicant may not generally present “new evidence” in court, and that a court’s consideration of such evidence should not change the level of deference."

They continued that "But the adequacy of a patent’s written description presents a question of law, not of fact, and respondent sought only to advance legal arguments concerning the adequacy of various portions of the patent’s written description. For that reason, the district court should not have rejected respondent’s submission on the ground that it was new evidence, and the Federal Circuit should not have held that consideration of the new submission would implicate the level of deference to which the Patent and Trademark Office (``PTO´´) is entitled."

This case is Gilbert Hyatt v. David Kappos, Supreme Court of the U.S., Sup. Ct. No. 10-1219, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2007-1066. The Court of Appeals heard an appeal from the U.S. District Court for the District of Columbia.