Hyatt v. Kappos ( 2010 )

United States Court of Appeals
for the Federal Circuit
__________________________
GILBERT P. HYATT,
Plaintiff-Appellant,
v.
DAVID KAPPOS, DIRECTOR, PATENT AND
TRADEMARK OFFICE,
Defendant-Appellee.
__________________________
2007-1066
__________________________
Appeal from the United States District Court for the
District of Columbia in case No. 03-CV-901, Judge Henry
H. Kennedy, Jr.
___________________________
Decided: November 8, 2010
___________________________
AARON M. PANNER, Kellogg, Huber, Hansen, Todd,
Evans & Figel, P.L.L.C., of Washington, DC, argued for
plaintiff-appellant on rehearing en banc. Of counsel on
the brief were MICHAEL L. MARTINEZ, Crowell & Moring
LLP, of Washington, DC, and GREGORY L. ROTH, Law
Offices of Gregory L. Roth, of La Palma, California. On
the initial brief were MICHAEL L. MARTINEZ and MICHAEL
I. COE, Crowell & Moring LLP, of Washington, DC. Of
counsel on the brief was GREGORY L. ROTH, Law Offices of
HYATT v. KAPPOS 2
Gregory L. Roth, of La Palma, California. Of counsel was
KENNETH C. BASS, III, Sterne, Kessler, Goldstein & Fox
P.L.L.C., of Washington, DC, and J. ROBERT CHAMBERS,
Wood Herron & Evans, LLP, of Cincinnati, Ohio.
BETH S. BRINKMANN, Deputy Assistant Attorney Gen-
eral, Appellate Staff, Civil Division, United States De-
partment of Justice, of Washington, DC, argued for
defendant-appellee on rehearing en banc. With her on the
brief were TONY WEST, Assistant Attorney General, and
SCOTT R. MCINTOSH and MARK R. FREEMAN, Attorneys. Of
counsel on the brief were RAYMOND T. CHEN, Solicitor, and
ROBERT J. MCMANUS and THOMAS W. KRAUSE, Associate
Solicitors, Office of the Solicitor, United States Patent and
Trademark Office, of Arlington, Virginia. On initial brief
were STEPHEN WALSH, Acting Solicitor, and ROBERT J.
MCMANUS and WILLIAM G. JENKS, Associate Solicitors,
Office of the Solicitor, United States Patent and Trade-
mark Office, of Arlington, Virginia. Of counsel were
RAYMOND T. CHEN, Acting Solicitor, and THOMAS W.
KRAUSE, Associate Solicitor.
MAXIM H. WALDBAUM, Schiff Hardin LLP, of New
York, New York for amicus curiae Federation Interna-
tionale Des Conseils en Propriete Industrielle on rehear-
ing en banc.
MARK J. ABATE, New York Intellectual Property Law
Association, of New York, New York, for amicus curiae
New York Intellectual Property Law Association on
rehearing en banc.
DANIEL B. RAVICHER, Benjamin N. Cardozo School of
Law, of New York, New York, for amicus curiae Public
Patent Foundation on rehearing en banc.
3 HYATT v. KAPPOS
HERBERT C. WAMSLEY, Intellectual Property Owners
Association, of Washington, DC, for amicus curiae Intel-
lectual Property Owners Association on rehearing en
banc. On the brief were DOUGLAS K. NORMAN and KEVIN
H. RHODES, Intellectual Property Owners Association, of
Washington, DC; and ROBERT M. ISACKSON, NICHOLAS H.
LAM, and JACOB A. SNOW, Orrick, Herrington & Sutcliffe
LLP, of New York, New York.
LAUREN A. DEGNAN, Fish & Richardson, P.C., of
Washington, DC, for amicus curiae Intel Corporation on
rehearing en banc. With her on the brief was JOHN A.
DRAGSETH, of Minneapolis, Minnesota. Of counsel on the
brief was HARRY F. MANBECK, JR., Rothwell, Figg, Ernst &
Manbeck P.C., of Washington, DC.
ANN M. MCCRACKIN, Franklin Pierce Law Center, of
Concord, New Hampshire, for amicus curiae Franklin
Pierce Law Center on rehearing en banc. With her on
the brief was J. JEFFREY HAWLEY.
__________________________
Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
GAJARSA, LINN, DYK, PROST, and MOORE, Circuit Judges.
Opinion for the court filed by Circuit Judge MOORE, in
which Chief Judge RADER and Circuit Judges LOURIE,
BRYSON, LINN, and PROST join.
Concurring-in-part, dissenting-in-part opinion filed by
Circuit Judge NEWMAN.
Dissenting opinion filed by Circuit Judge DYK, in which
Circuit Judge GAJARSA joins.
MOORE, Circuit Judge.
Under the patent laws, a patent applicant who is dis-
satisfied with the decision of the Board of Patent Appeals
and Interferences (Board) regarding his application may
choose one of two paths. The applicant may appeal the
Board’s decision to the Court of Appeals for the Federal
Circuit, which will review the Board’s decision on the
record that was before the U.S. Patent and Trademark
Office (Patent Office). Alternatively, the applicant may
file a civil action in district court, and the court will
determine whether the applicant “is entitled to receive a
patent for his invention . . . as the facts in the case may
appear.” 35 U.S.C. § 145. This case presents the issue of
what limitations exist on an applicant’s right to introduce
new evidence in a § 145 civil action.
We have characterized this civil action as a “hybrid”
action. It is not an appeal; the language of § 145 ex-
pressly distinguishes its civil action from a direct appeal,
and the Supreme Court has recognized that an applicant
may introduce new evidence before the district court that
was not presented to the Patent Office. However, it is
also not an entirely de novo proceeding. Issues that were
not considered by the Patent Office cannot be raised with
the district court in most circumstances, and if no new
evidence is introduced, the court reviews the action on the
administrative record, subject to the court/agency stan-
dard of review. The particular significance of a § 145 civil
action is that it affords an applicant the opportunity to
introduce new evidence after the close of the administra-
tive proceedings—and once an applicant introduces new
evidence on an issue, the district court reviews that issue
de novo. Thus, an applicant’s ability to introduce new
evidence is the hallmark of a § 145 action. It is the pri-
mary factor that distinguishes a civil action under § 145
from an appeal.
5 HYATT v. KAPPOS
We hold that 35 U.S.C. § 145 imposes no limitation on
an applicant’s right to introduce new evidence before the
district court, apart from the evidentiary limitations
applicable to all civil actions contained in the Federal
Rules of Evidence and Federal Rules of Civil Procedure.
In doing so, we reject the Director’s proposal that only
“new evidence that could not reasonably have been pro-
vided to the agency in the first instance” is admissible in a
§ 145 action. Dir. Br. at 8. 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. As
with any evidence introduced in a civil action, the district
court as factfinder may give less weight to evidence
introduced by an applicant in a § 145 action if the district
court questions its credibility or reliability. Because the
district court abused its discretion when it excluded Mr.
Hyatt’s declaration under the wrong legal standard, we
vacate the decision of the district court and remand.
I. BACKGROUND
Gilbert P. Hyatt is the sole named inventor of U.S.
Patent Application No. 08/471,702 (the ’702 application),
titled “Improved Memory Architecture Having a Multiple
Buffer Output Arrangement.” The ’702 application re-
lates to a computerized display system for processing
image information.
Mr. Hyatt filed the ’702 application on June 6, 1995.
As filed, the ’702 application included a 238-page specifi-
cation, 40 pages of figures, and 15 claims; it originally
claimed priority through a chain of related applications to
an application filed in 1984 and was later amended to
HYATT v. KAPPOS 6
claim priority to a 1975 application. Mr. Hyatt filed
several preliminary amendments in which he amended
the drawings and specification and added 74 new claims.
The examiner issued a nonfinal office action rejecting
all pending claims on various grounds, including aban-
donment, obviousness, and double patenting. Mr. Hyatt
filed a response, in which he traversed the abandonment
and obviousness rejections and amended the claims to
distinguish over the claims of his copending applications.
Mr. Hyatt also cancelled various claims and added new
ones, bringing the total number of claims to 117.
The examiner informed Mr. Hyatt that the response
was incomplete because Mr. Hyatt had failed to identify
the novelty of and support in the specification for his
amended and added claims. Mr. Hyatt identified features
of the new claims that allegedly distinguished over the
prior art. Mr. Hyatt also listed pages of the specification
that contained representative support for each of the
distinguishing features of the claims.
The examiner issued a final office action rejecting all
117 claims. He identified particular categories of claimed
subject matter that he concluded lacked support in the
specification and rejected all claims under 35 U.S.C.
§ 112, first paragraph, for failure to comply with the
written description and enablement requirements. He
also rejected all claims for both obviousness-type and
Schneller-type double patenting over eight references.
Finally, he rejected nine claims as being anticipated and
seven as being obvious over a combination of three refer-
ences. All told, the examiner issued 2546 separate rejec-
tions of Mr. Hyatt’s 117 claims.
7 HYATT v. KAPPOS
Mr. Hyatt appealed to the Board, addressing every
one of the examiner’s grounds for rejection in a 129-page
appeal brief. With respect to the written description
rejections, Mr. Hyatt argued that the limitations identi-
fied by the examiner as lacking sufficient written descrip-
tion had “extensive basis” in the specification. J.A. 10830.
Mr. Hyatt included a table (Table 1) that listed represen-
tative pages in the specification containing the “terminol-
ogy” objected to by the examiner. J.A.10832. For certain
terms, Mr. Hyatt also identified figures and page ranges
of the specification that described the relevant terms.
The Board reversed all of the examiner’s rejections for
obvious-type and Schneller-type double patenting. The
Board also reversed all of the anticipation and obvious-
ness rejections. With respect to the written description
rejections, the Board noted that merely pointing to the
occurrence of isolated words in the specification—as Mr.
Hyatt had done in Table I—did not adequately establish
that the specification contained written description for the
particular combination of elements that made up each
limitation. Still, after performing its own review of the
specification, as it is required to do, the Board reversed all
of the examiner’s written description and enablement
rejections with respect to 38 of the pending claims and
many of these rejections for the other 79 claims, finding
that the features identified by the examiner as lacking
written description were either adequately disclosed or
were not claimed. Thus, Mr. Hyatt prevailed on over 93%
of the examiner’s rejections at the Board level. The Board
affirmed at least one of the examiner’s written description
and enablement rejections with respect to each of 79
claims. Mr. Hyatt filed a Request for Rehearing; the
Board dismissed the Request without considering the
merits, finding that Mr. Hyatt raised new arguments that
HYATT v. KAPPOS 8
could have been presented earlier to either the examiner
or the Board.
Following the Board’s decision dismissing his Request
for Rehearing, Mr. Hyatt filed a civil action in the United
States District Court for the District of Columbia against
the Director of the Patent Office (Director) pursuant to 35
U.S.C. § 145. The Director moved for summary judgment
that the pending claims were invalid for failure to comply
with the written description requirement. Mr. Hyatt
opposed the motion, arguing that genuine issues of mate-
rial fact existed to preclude summary judgment as to
written description. In support of his opposition, Mr.
Hyatt submitted a written declaration in which he identi-
fied portions of the specification that one of skill in the art
would understand to describe the limitations challenged
by the Director. The Director argued that the court
should not consider Mr. Hyatt’s declaration because he
did not previously submit it to the examiner or the Board.
The district court determined that it could not con-
sider Mr. Hyatt’s declaration. Hyatt v. Dudas, 2005 U.S.
Dist. LEXIS 45319, at *12 (D.D.C. Sept. 30, 2005). The
court found that the Board’s written description rejections
were substantively identical to, albeit more detailed than,
the rejections issued by the examiner. Id. at *19. Be-
cause Mr. Hyatt’s declaration was directed to those writ-
ten description rejections, the court concluded that he
could have presented the declaration earlier, “certainly by
the time his patent application was considered by the
Board.” Id. at *24. Finding that Mr. Hyatt had no expla-
nation for why he failed to offer his declaration during the
proceedings before the Board, the court determined that
“[Mr.] Hyatt's failure to explain why he didn’t submit his
declaration earlier is negligent, and the district court
9 HYATT v. KAPPOS
need not consider evidence negligently submitted after
the end of administrative proceedings.” Id. at *26.
Mr. Hyatt did not submit any evidence to the district
court apart from his declaration, which the court ex-
cluded. Therefore, the court reviewed the Board’s fact
findings for substantial evidence and granted summary
judgment to the Director that the pending claims were
unpatentable for failure to comply with the written de-
scription requirement. Id. at *27.
Mr. Hyatt appealed, and a divided panel of this court
affirmed. Hyatt v. Doll, 576 F.3d 1246 (Fed. Cir. 2009).
The panel majority acknowledged that “it is beyond
question that in appropriate circumstances new evidence
may be submitted to the district court in a § 145 action
(subject, at least, to the Federal Rules of Evidence).” Id.
at 1266. However, the majority stated that there was a
“general practice” among federal courts “in some circum-
stances 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. at 1266. The
majority also concluded that the Administrative Proce-
dure Act (APA) imposed restrictions on the admission of
new evidence in a § 145 action. Id. at 1270. The majority
noted that judicial review of an agency action is generally
restricted to the agency record and that the Patent Office
is an agency whose findings of fact must be reviewed
according to the APA’s court/agency standard of review.
Id. at 1267, 1269. Therefore, the majority determined
that although review in a § 145 action is “[o]f course . . .
not strictly confined to the agency record,” “neither are
[§ 145] proceedings wholly de novo.” Id. at 1269.
Turning to the merits of Mr. Hyatt’s case, the major-
ity stated that although Mr. Hyatt could have identified
HYATT v. KAPPOS 10
the portions in the specification that provided written
description support for the disputed limitations any time
after the office action, he “refused to cooperate, even
though he necessarily possessed the information the
examiner sought by the time he filed his application.” Id.
Although the majority acknowledged the district court’s
finding that Mr. Hyatt’s failure to submit the evidence in
his declaration earlier was negligent, the majority deter-
mined that “it is clear from the record that Hyatt willfully
refused to provide evidence in his possession in response
to a valid action by the examiner.” Id. (emphasis added).
In light of Mr. Hyatt’s “willful non-cooperation,” the
majority held that the district court did not abuse its
discretion in excluding the declaration. Id. The majority
then affirmed the court’s grant of summary judgment. Id.
at 1279.
The dissenting judge disagreed, arguing that the dis-
trict court abused its discretion by applying the wrong
legal test for the admissibility of the evidence. The dis-
sent argued that the plain language, legislative history,
and Supreme Court jurisprudence relating to § 145 estab-
lish that an applicant’s right to present new evidence in a
§ 145 action is subject only to the Federal Rules of Evi-
dence and Civil Procedure. Id. at 1280-81, 1284. Further,
the dissent disputed the propriety of determining on
appeal that Mr. Hyatt willfully withheld his declaration.
We agreed to rehear the appeal en banc and vacated
the judgment of the panel. Hyatt v. Kappos, 366 Fed.
Appx. 170 (Fed. Cir. 2010). We asked the parties to direct
their briefs to the following questions:
(a) Are there any limitations on the admissibility
of evidence in section 145 proceedings? In par-
ticular-
11 HYATT v. KAPPOS
(i) Does the Administrative Procedure Act
require review on the agency record in
proceedings pursuant to section 145?
(ii) Does section 145 provide for a de novo
proceeding in the district court?
(iii) If section 145 does not provide for a de
novo proceeding in the district court, what
limitations exist on the presentation of
new evidence before the district court?
(b) Did the district court properly exclude the Hyatt
declaration?
In addition to the parties’ briefs, we received seven
amicus briefs. Amicus briefs submitted by amici Public
Patent Foundation, American Intellectual Property Law
Association (AIPLA), Fédération Internationale des
Conseils en Propriété Industrielle, New York Intellectual
Property Law Association (NYIPLA), and Intellectual
Property Owners Association (IPO) opposed the panel
majority’s imposition of limitations on the evidence ad-
missible in a § 145 action. Amici Intel Corporation and
the Franklin Pierce Law Center submitted briefs arguing
in favor of greater limitations on the admissibility of
evidence in § 145 actions, though neither argued in favor
of the standard proposed by the Patent Office in this case.
We heard oral argument on July 8, 2010. For the rea-
sons below, we hold that the only limitations on the
admissibility of evidence applicable to a § 145 proceeding
are the limitations imposed by the Federal Rules of Evi-
dence and Federal Rules of Civil Procedure. Therefore,
we hold that the district court applied the wrong legal
standard for the admissibility of evidence in a § 145
HYATT v. KAPPOS 12
proceeding and abused its discretion when it excluded Mr.
Hyatt’s declaration.
II. DISCUSSION
On rehearing, Mr. Hyatt argues that the only limita-
tions on the admissibility of new evidence in a § 145
proceeding are the rules of evidence generally applicable
to all civil actions. Mr. Hyatt asserts that the legislative
history of § 145 and its predecessor statute shows that
Congress intended to provide a genuine alternative to an
on-the-record appeal that permits an applicant to bring a
new case, complete with new evidence, to show that his
patent should issue. Mr. Hyatt asserts that case law from
the Supreme Court and this circuit supports his interpre-
tation. Mr. Hyatt also argues that nothing in the APA
limits the introduction of new evidence in a § 145 proceed-
ing. Therefore, Mr. Hyatt contends that the district court
acted improperly in excluding his declaration.
The Director, in contrast, argues that § 145 should be
interpreted to prohibit an applicant from introducing new
evidence before the district court unless the applicant
could not reasonably have provided that evidence to the
Patent Office in the first instance. The Director asserts
that the proceeding authorized by the predecessor statute
of § 145 was effectively a suit to set aside a judgment and
that under established rules of equity practice, a court
presiding over such a suit would have excluded evidence
that the plaintiff failed, without reasonable excuse, to
present previously. Further, the Director argues that
APA principles and various policy considerations weigh in
favor of limiting an applicant’s right to introduce new
evidence. The Director contends that because Mr. Hyatt
could have presented the declaration to the examiner and
13 HYATT v. KAPPOS
to the Board prior to instigating the present action, the
district court correctly excluded the declaration.
A.
Section 145, titled “Civil action to obtain patent,” pro-
vides 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 District of Co-
lumbia if commenced within such time after such
decision, not less than sixty days, as the Director
appoints. The court may adjudge that such appli-
cant is entitled to receive a patent for his inven-
tion, 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 re-
quirements of law. All the expenses of the pro-
ceedings shall be paid by the applicant.
35 U.S.C. § 145 (emphases added).
On its face, § 145 authorizes a civil action in district
court by which an applicant can prove his entitlement to a
patent. The statute provides no indication that this civil
action is somehow different from a customary civil action.
In particular, § 145 does not provide that unique rules of
evidence, separate from or supplementary to the Federal
Rules of Evidence that apply to all civil actions, control to
HYATT v. KAPPOS 14
limit an applicant’s ability to introduce new evidence
before the district court. Additionally, § 145 makes clear
that the civil action is distinct from an appeal, in which
the applicant would be limited to the record before the
Patent Office. See 35 U.S.C. § 144. Pursuant to the plain
language of § 145, this civil action does not merely afford
judicial review of agency action. Rather, the statute
directs that the district court may “adjudge that such
applicant is entitled to receive a patent for his invention .
. . as the facts in the case may appear.”
B.
The lengthy legislative history of § 145 and its prede-
cessor statute, which dates back nearly to the creation of
the Patent Office, shows that Congress intended to pro-
vide for a civil action in which an applicant would be free
to introduce new evidence. Congress established the
Patent Office and the patent examination scheme in 1836.
Act of July 4, 1836, ch. 357, 5 Stat. 117 (1836 Act). The
1836 Act provided that the Commissioner of Patents
would determine whether each applicant was entitled to a
patent on his application. Id. §§ 1, 7, 5 Stat. 117, 120. An
applicant dissatisfied with the Commissioner’s decision
regarding his application could appeal to a board of three
examiners, which could overturn the Commissioner’s
decision in full or in part. Id. § 7, 5 Stat. 121.
The decision of the board of examiners was final in ex
parte cases. Id.; see also P.J. Federico, Evolution of
Patent Office Appeals, 22 J. Pat. Off. Soc’y 838, 840
(1940). However, in cases where the board rejected an
application on the ground that it interfered with an
unexpired patent, the 1836 Act provided that the appli-
cant “may have remedy by bill in equity.” Id. § 16, 5 Stat.
123-24. A bill in equity was the written mechanism that
15 HYATT v. KAPPOS
commenced an original suit in a court of equity. See
Shipman, Handbook of the Law of Equity Pleading § 101,
p. 168 (West 1897). Courts with jurisdiction over an
applicant’s bill in equity could “adjudge that such appli-
cant is entitled . . . to have and receive a patent for his
invention . . . as the fact of priority of right or invention
shall in any such case be made to appear.” 1836 Act, § 16,
5 Stat. 124. Three years later, Congress extended an
applicant’s remedy by bill in equity beyond interferences
to “all cases where patents are refused for any reason
whatever.” Act of Mar. 3, 1839, ch. 88, § 10, 5 Stat. 353,
354.
Congress made various changes to the appeal struc-
ture within the Patent Office over the next few decades.
None of these changes affected an applicant’s separate
remedy by bill in equity, which continued to be available.
In 1870, Congress passed an act to “revise, consolidate,
and amend the Statutes relating to Patents and Copy-
rights.” Act of July 8, 1870, ch. 230, 16 Stat. 198 (1870
Act). The 1870 Act provided for a three-tier appeal proc-
ess within the Patent Office. An applicant whose applica-
tion was rejected by the primary examiner could appeal to
a board of examiners-in-chief. Id. § 46, 16 Stat. 204-05.
Similarly, a party to an interference could appeal an
adverse decision by the examiner in charge of interfer-
ences to the board. Id. If the applicant or party to the
interference was dissatisfied with the board’s decision, he
could appeal first to the Commissioner of Patents and
then to the supreme court of the District of Columbia. Id.§§ 47-48, 16 Stat. 205.
Pursuant to the 1870 Act, after all of these appeals
were exhausted, the applicant could still seek remedy by
bill in equity:
HYATT v. KAPPOS 16
[W]henever a patent on application is refused . . .
the applicant may have remedy by bill in equity;
and the court . . . may adjudge that such applicant
is entitled, according to law, to receive a patent for
his invention . . . as the facts in the case may ap-
pear. . . . [A]nd all the expenses of the proceeding
shall be paid by the applicant, whether the final
decision is in his favor or not.
Id. § 52. Congress later recodified this section as § 4915
of the Revised Statutes.
Congress significantly modified the patent application
review process in 1927, primarily in response to criticism
regarding the length and complexity of the process. Act of
March 2, 1927, ch. 273, 44 Stat. 1335 (1927 Act); see also
Federico, 22 J. Pat. Off. Soc’y at 941. 1 Various schemes
were proposed to Congress for simplifying the process.
Some proposals advocated eliminating one of the appeals;
others advocated doing away with the bill in equity under
§ 4915. Id. at 941-42. The continued viability of § 4915
was a particularly disputed issue, and Congress heard
extensive testimony regarding the merits of the remedy
by bill in equity in the hearings that preceded the Act.
1 As P.J. Frederico explained in 1940, the “bill in
equity” which in 1839 applied to both ex parte and inter-
ference cases “was thus at this time [1839] given the scope
which has been maintained to the present day.” Federico,
22 J. Pat. Off. Soc’y at 935. While Congress considered
and changed the appeals process in 1927, the language of
§ 4915 in the bills debated in February 1927 and Decem-
ber 1927 was identical, and was ultimately enacted in §
4915 including the requirement that “the record in the
Patent Office shall be admitted . . . without prejudice,
however, to the right of the parties to take further testi-
mony.”
17 HYATT v. KAPPOS
Those who favored retaining § 4915 argued that an
applicant’s right to introduce evidence that had not been
before the Patent Office created a truly distinct, and
therefore valuable, alternative to an on-the-record appeal.
Charles E. Howson, Chairman of the Committee on
Patent Law Revision for the American Bar Association,
explained the significance of § 4915 as follows:
Section 4915 has always been regarded by the
patent bar, or those experienced in patent prac-
tice, as the final check on the Patent Office to en-
able a deserving inventor to get his just deserts if
everything else fails. The advantage of section
4915 is that it enables the party in interest, desir-
ing to obtain a patent, to take evidence in a court
or tribunal whose business it is to try issues of
facts and make up a record in addition to that he
has been enabled to furnish the examiners in the
Patent Office, and therefore get before a court of
competent jurisdiction everything connected with
his rights and every fact connected with his pat-
ent; in other words, have before him everything
that courts in the country have before them in in-
fringement cases.
To Amend Section 52 of Judicial Code and Other Statutes
Affecting Procedure in Patent Office: Hearings on H.R.
6252 and H.R. 7087 Before the H. Comm. on Patents, 69th
Cong., 1st Sess. 20-21 (1926) (To Amend Section 52)
(emphases added). Another proponent of § 4915, A.C.
Paul, the Chairman of the Patent Section of the Legisla-
tion Committee of the American Bar Association, testified
that he understood § 4915 to grant an applicant the right
to “have the case start de novo after the decision of the
board.” Id. at 81. Mr. Paul distinguished the bill in
equity under § 4915 from an on-the-record appeal, ex-
HYATT v. KAPPOS 18
plaining that “the difference [between § 4915 and an
appeal] would be then if we went to the court of appeals
by an appeal the decision must be based upon the same
record. If we go into a court of equity the parties may use
the record that they have in the Patent Office and may
supplement it by additional evidence.” Id. (emphasis
added). Another committee member testified that the
original suit under § 4915 allowed an inventor to
strengthen his case by enabling an applicant to “take
testimony and bring out all the facts pertinent and have
an absolutely full hearing in the matter.” Id. at 13
(statement of Henry Huxley, Member of the Patent Sec-
tion of the Legislation Committee of the American Bar
Association). Congressman Albert Vestal similarly ex-
plained that “if a party feels aggrieved, he can bring his
suit in the equity court [under § 4915], but it is not an
appeal. It is the bringing of a new suit.” Id. at 36; see also
id. at 66 (under § 4915, “you may go to a court of equity
and take testimony in open court and use the testimony in
the Patent Office or both and have it as a proceeding de
novo, not appeal with the presumption in favor of what
has been done, but where you stand and the court listens
to what you have to say and decides it on the merits”)
(statement of Otto R. Barnett, President, American Pat-
ent Law Association, Chicago, Ill.).
The opponents of § 4915 also recognized that the rem-
edy by bill in equity allowed an applicant to freely intro-
duce new evidence in the district court. Indeed, they
objected to the provision on precisely this basis. For
example, the Commissioner of Patents testified that §
4915 entitled an applicant to “start de novo . . . and build
up a new record” in district court. Id. at 80 (statement of
Hon. Thomas E. Robertson, Commissioner of Patents).
He cautioned that § 4915 permitted applicants to “bring[]
in evidence that they could have brought in before [the
19 HYATT v. KAPPOS
Patent Office] but did not.” Id. at 81. The Commissioner
also recognized that this new action allowed the relitiga-
tion of matters already decided by the Patent Office,
permitting the applicant “to build up a new record for
dragging an opponent through a second time.” Id. at 80;
see also id. at 81 (“after dragging a man through all this
procedure which you have said is so complicated and
burdensome, [an applicant can] start de novo in court,
and bring in testimony not taken the first time”). The
former Assistant Commissioner similarly opposed § 4915,
arguing that § 4915 “should be cut out entirely for ex
parte applications” to force an applicant to introduce “all
the testimony pertinent to his case” to the Patent Office.
Id. at 76 (statement of Karl Fenning, former Assistant
Commissioner of Patents).
Thus, proponents and opponents of § 4915 alike rec-
ognized, and conveyed to Congress, that the remedy by
bill in equity allowed an applicant to introduce new
evidence in the district court, regardless of whether that
evidence had been provided to the Patent Office in earlier
proceedings. Nothing in the Congressional record leading
up to the 1927 Act indicates that any member of Congress
or the bar contemplated any limit on this right apart from
the limits imposed by the normal rules of equity practice.
Despite being presented with the policy reasons for
eliminating the remedy by bill in equity, Congress chose
to retain § 4915. 1927 Act, § 3, 44 Stat. 1335-36. How-
ever, Congress gave applicants a right to choose between
an appeal and the remedy by bill in equity. An applicant
who chose to appeal an adverse decision by the Patent
Office thus “waive[d] his right to proceed under section
4915.” Id. § 8, 44 Stat. 1336.
HYATT v. KAPPOS 20
Congress bifurcated § 4915 into two provisions in
1952, sections 145 and 146 of Title 35 of the United States
Code. 2 Act of July 19, 1952, ch. 950, §§ 145-46, 66 Stat.
792, 803 (1952 Act). Section 145, which controlled ex
parte proceedings, provided that an “applicant dissatisfied
with the decision of the Board of Appeals may unless
appeal has been taken to the United States Court of
Customs and Patent Appeals have remedy by civil action
against the Commissioner.” Id. § 145, 66 Stat. 803 (em-
phasis added). Section 146, which applied to interfer-
ences, similarly provided for parties to an interference to
have a “remedy by civil action” and that “the record in the
Patent and Trademark Office shall be admitted . . . with-
out prejudice to the right of the parties to take further
testimony.” Id. § 146, 66 Stat. 803. Congress stressed
that the 1952 Act made “no fundamental change in the
various appeals and other review of Patent Office action.”
See S. Rep. No. 82-1979 (1952), reprinted in 1952
U.S.C.C.A.N. 2394, 2400. Subsequent changes to § 145
have not altered the substantive application of the statute
in any way relevant to our analysis.
Though the Director does not directly dispute any of
the relevant legislative history, he nonetheless argues
that Congress intended for new evidence to be admitted in
§ 145 actions only where it could not reasonably have
been presented to the agency in the first instance. Dir.
Br. at 28. The Director points to pre-1952 decisions of
some federal courts which he characterizes as having
2 As sections 145 and 146 both stem from § 4915,
we have characterized these sections as “parallel provi-
sions” to be treated similarly. Winner Int’l Royalty Corp.
v. Wang, 202 F.3d 1340, 1345 (Fed. Cir. 2000). We see no
rationale that would justify distinguishing between
interferences and ex parte actions for admissibility pur-
poses.
21 HYATT v. KAPPOS
“excluded or discounted evidence which the applicant had
failed, without reasonable excuse, to present to the
agency.” Id. at 26. According to the Director, Congress
must have intended to codify this “longstanding” interpre-
tation when Congress reenacted § 4915 without substan-
tive change as § 145. Id. at 28. The flaw with the
Director’s claim is inherent in his argument—Congress
could not have implicitly adopted the different approaches
various courts took with regard to an admissibility stan-
dard.
The Director is correct that, prior to the 1952 Act,
some regional circuits excluded or gave less weight to
evidence based on an applicant’s conduct before the
Patent Office. The courts did so under an array of incon-
sistent standards (including willful withholding, inten-
tional suppression, and bad faith). See, e.g., Barrett Co. v.
Koppers Co., 22 F.2d 395, 397 (3d Cir. 1927) (holding that
a when a party intentionally withholds evidence within
his possession before the Patent Office, he may not later
introduce that evidence in a suit under § 4915); Dowling
v. Jones, 67 F.2d 537, 538 (2d Cir. 1933) (explaining that
in Barrett “the Third Circuit refused to consider evidence
which the inventor had deliberately suppressed in the
interference, and used broader language than the exact
situation required . . . However, it does not follow that it
would have extended the doctrine to evidence not sup-
pressed, but merely neglected through the plaintiff's
slackness in preparation.”); Knutson v. Gallsworthy, 164
F.2d 497, 509 (D.C. Cir. 1947) (“[I]f no bad faith on the
part of the profferer is involved, such as deliberate with-
holding for some tactical reason, the court could receive
the evidence.”). 3 In many of the cases cited by the Direc-
3 Post-1952 cases added to the hodgepodge of stan-
dards. See, e.g., Standard Oil Co. v. Montedison, S.p.A.,
HYATT v. KAPPOS 22
tor, the court both admitted and considered the appli-
cant’s new evidence. See, e.g., Globe-Union, Inc. v. Chi-
cago Tel. Supply Co., 103 F.2d 722, 727 (7th Cir. 1939)
(“We can not escape the strength and the compelling
influence of the additional evidence that was adduced in
the district court.”) Some courts held that an applicant’s
failure to previously introduce the evidence before the
Patent Office goes to the weight of the evidence, not to its
admissibility. E.g., Western Electric Co. v. Fowler, 177 F.
224, 228-29 (7th Cir. 1910); Standard Cartridge Co. v.
Peters Cartridge Co., 77 F. 630, 638 (6th Cir. 1896). As we
explain in greater detail below, when failure to introduce
the evidence earlier casts doubt as to its credibility or
reliability, we believe this is the correct approach.
We are not persuaded by the Director’s argument that
Congress intended that only evidence that could not have
reasonably been presented to the Patent Office in the first
instance is admissible in § 145 proceedings. In view of the
664 F.2d 356, 376 (3d Cir. 1981) (rejecting the argument
that the district court should have required the party to
explain why it was offering evidence for the first time
before the district court and holding that “new expert
testimony is clearly admissible in a section 146 action
without such justification”); Velsicol Chem. Co. v. Mon-
santo Co., 579 F.2d 1038 (7th Cir. 1978) (adopting a
reasonably diligent standard); Heil Co. v. Snyder Indus.
Inc., 763 F. Supp. 422, 426 (D. Neb. 1991) (holding that
new evidence is admissible subject only to the rules of
evidence). Our court previously recognized: “We are
aware that this provision has received varying interpreta-
tions in the circuits. In our view, since an action under 35
U.S.C. § 146 has the hybrid nature of an appeal and a
trial de novo, the statute authorizes the district court to
accept all proffered testimony on issues raised by the
parties during the proceedings below or by the board’s
decision.” Case v. CPC Int’l, Inc., 730 F.2d 745, 752 (Fed.
Cir. 1984).
23 HYATT v. KAPPOS
language of the statute and the extensive legislative
history, we agree with Mr. Hyatt that Congress intended
that applicants would be free to introduce new evidence in
§ 145 proceedings subject only to the rules applicable to
all civil actions, the Federal Rules of Evidence and the
Federal Rules of Civil Procedure.
C.
The Director does not dispute that § 145, like its
predecessor provisions, permits applicants to introduce
new evidence in the district court proceedings. See, e.g.,
Dir. Br. at 9, 12, 18. However, the Director contends that
the applicant is only allowed to introduce new evidence
that “the applicant could not reasonably have provided to
the agency in the first instance.” Id. at 9. The Director
argues that this limitation stems from the rules of equity
practice applicable to § 4915 actions, which would have
prohibited an applicant from introducing new evidence
except in limited circumstances. The Director also asserts
that the APA and various policy considerations operate to
impose additional limitations on an applicant’s right to
introduce new evidence. We address each of these argu-
ments in turn.
1.
The Director argues that the rules of equity practice
barred an applicant from introducing evidence in a § 4915
suit if the applicant failed, without reasonable excuse, to
provide the evidence to the Patent Office in the first
instance. The Director relies for this proposition on
Morgan v. Daniels, 153 U.S. 120 (1894), where the Su-
preme Court characterized a suit under § 4915 as “some-
thing in the nature of a suit to set aside a judgment.” Id.
HYATT v. KAPPOS 24
at 124. The Director argues that a suit to set aside a
judgment is a specific type of bill in equity used to seek
reversal of a prior decree or judgment and was called a
“bill of review.” The Director explains that a court pre-
sented with a bill of review to overturn a judgment would
not consider any new evidence unless the plaintiff could
not have obtained the evidence before the first trial with-
out reasonable diligence. See Shipman, supra, at § 101, p.
168. The Director argues that the evidentiary constraints
applicable to a bill of review applied to actions under §
4915 and, therefore, asserts that an applicant could not
introduce any new evidence in a § 4915 action unless he
could not reasonably have introduced it to the Patent
Office in the first instance.
There are several problems with the Director’s reli-
ance on Morgan and the analogy to a bill of review. The
Supreme Court’s decision in Morgan does not provide
support for the Director’s “reasonable excuse” admissibil-
ity standard. In fact, Morgan does not relate to the
admissibility of new evidence at all: the parties in that
case did not seek to introduce any new evidence before the
Circuit Court. 153 U.S. at 122. Instead, when the Su-
preme Court indicated that the suit under § 4915 was
“something in the nature of a suit to set aside a judg-
ment,” it was referring to the standard of review applica-
ble to Patent Office fact findings when no new evidence is
introduced in the district court. The Supreme Court
considered what “rule . . . should control the [reviewing]
court in the determination of this case.” Id. at 123. The
Court observed that the Circuit Court, which had re-
quired the plaintiff to provide “a clear and undoubted
preponderance of proof,” apparently applied the standard
of review used by “an appellate court in reviewing find-
ings of fact made by the trial court.” Id. at 123. “The
[Morgan] Court, in other words, reasoned strongly that a
25 HYATT v. KAPPOS
court/court review standard is not proper [for a court
reviewing Patent Office fact findings]. . . And its reason-
ing makes clear that it meant those words to stand for the
court/agency review standard.” Dickinson v. Zurko, 527
U.S. 150, 159-60 (1999).
Thus, Morgan is a case about what standard of review
ought to apply when the district court decides whether an
applicant is entitled to a patent on exactly the same
record that was before the Patent Office. When no new
evidence is introduced, the § 145 action is “something in
the nature of a suit to set aside a judgment,” and the
district court reviews the Patent Office fact findings for
substantial evidence (i.e., according to the court/agency
standard of review). Morgan offers no guidance on the
scope of admissibility of evidence in a § 4915 proceeding.
There are, however, other Supreme Court cases that have
spoken to the admissibility of evidence in these types of
proceedings. In Butterworth v. Hoe, 112 U.S. 50 (1884),
the Supreme Court explained:
It is thereby provided [in § 4915] that the appli-
cant may have remedy by bill in equity. This
means a proceeding in a court of the United
States having original equity jurisdiction under
the patent laws, according to the ordinary course
of equity practice and procedure. It is not a tech-
nical appeal from the patent-office, like that au-
thorized in section 4911, confined to the case as
made in the record of that office, but is prepared
and heard upon all competent evidence adduced
and upon the whole merits.
Id. at 61 (emphasis added).
HYATT v. KAPPOS 26
The Butterworth Court identified three circuit court
cases as exemplifying “the uniform and correct practice in
the Circuit Courts” with respect to suits under § 4915.
112 U.S. at 61. In each of these cases, the Circuit Court
explicitly recognized that a § 4915 suit was to be heard
upon all competent evidence that the parties chose to
introduce, regardless of whether the evidence was or
could have been provided to the Patent Office. Evidence
was “competent” for admissibility purposes so long as it
complied with the “rules and practice of a court of equity.”
See In re Squire, 22 F. Cas. 1015, 1016 (C.C.E.D. Mo.
1877) (“Either party, therefore, is at liberty to introduce
additional evidence, or rather, to speak more accurately,
the hearing is altogether independent of that before the
commissioner, and takes place on such testimony as the
parties may see fit to produce agreeably to the rules and
practice of a court of equity.”); Butler v. Shaw, 21 F. 321,
327 (C.C.D. Mass. 1884) (“[§ 4915] contains no provision
requiring the case to be heard upon the evidence produced
before the commissioner . . . and, as has been held in this
and other circuits, the court may receive new evidence,
and has the same powers as in other cases in equity”);
Whipple v. Miner, 15 F. 117, 118 (C.C.D. Mass. 1883) (“[§
4915] is, plainly, an independent, original jurisdiction
which is given to the courts”). Admitting evidence in
accordance with the “ordinary course of equity practice
and procedure” is admitting evidence in accordance with
the Federal Rules of Evidence and Civil Procedure.
The Supreme Court has consistently recognized that
new evidence may be introduced in these district court
proceedings. See, e.g., Gandy v. Marble, 122 U.S. 432, 439
(1887) (explaining that the § 4915 suit in equity was “not
a technical appeal from the Patent Office, nor confined to
the case as made in the record on that office”); Hoover Co.
v. Coe, 325 U.S. 79, 83 (1945) (explaining that the bill in
27 HYATT v. KAPPOS
equity in a § 4915 action afforded applicants “a formal
trial . . . on proof which may include evidence not pre-
sented in the Patent Office”). No Supreme Court case has
ever placed any limitations on the admissibility of evi-
dence in a § 145 or § 4915 proceeding apart from the
ordinary rules applicable to all civil actions. To the
contrary, the Supreme Court observed that the remedy by
bill in equity provided by § 4915 “sav[ed] to litigants the
option of producing new evidence in a court.” Hoover Co.,
325 U.S. at 87. Most recently, in Zurko, the Supreme
Court stated that “[Section 145] permits the disappointed
applicant to present to the court evidence that the appli-
cant did not present to the PTO. The presence of such
new or different evidence makes a factfinder of the dis-
trict judge.” 527 U.S. at 164. Our court has likewise held
that a § 145 applicant is “entitled to” and may “choose to”
to introduce new evidence in the district court proceed-
ings. See, e.g., Mazzari v. Rogan, 323 F.3d 1000, 1004-05
(Fed. Cir. 2003) (“A section 145 review . . . affords the
applicant an opportunity to present additional evidence or
argue the previous evidence afresh” and “[i]f the parties
choose to present additional evidence to the district court .
. . the district court would make de novo factual find-
ings.”) (emphasis added); Fregeau v. Mossinghoff, 776
F.2d 1034, 1037 (Fed. Cir. 1985) (“The [§145] proceeding,
however, is not simply an appeal since the parties are
entitled to submit additional evidence.”) (emphasis
added).
To the extent that the Supreme Court precedent offers
guidance on the admissibility of evidence in these pro-
ceedings, it indicates that all competent evidence is
admissible subject only to the ordinary course of equity
practice and procedure, which is the Federal Rules of
Evidence and Civil Procedure that are applicable to all
civil actions. There is no support for the Director’s pro-
HYATT v. KAPPOS 28
posed standard, which would allow new evidence only if
the evidence could not reasonably have been provided to
the Patent Office.
The Director’s argument also fails because the bill in
equity authorized by § 4915 is not a bill in review. The
Director is correct in his characterization of the admissi-
bility rules that would apply if a § 145 proceeding was
nothing more than a bill of review. As the Director points
out, a party filing a bill of review could introduce new
evidence only if that evidence “could not have been dis-
covered and presented by the exercise of due diligence
before the decree in question was made.” Shipman,
supra, at § 216; see also Beard v. Burts, 95 U.S. 434, 436
(1877). However, the bill in equity authorized by § 4915
is not a bill of review. A bill in equity was the written
mechanism that began a judicial proceeding in any court
of equity. See 1 Street, Federal Equity Practice § 135
(1909). A bill in equity could be either an original bill,
which began “an independent suit in equity unconnected
with any other previous or pending suit in the same
court,” or a “dependent” bill, which “relate[d] to some
matter already litigated in the court by the same parties.”
Id. § 141, § 142. A bill of review was a particular type of
dependent bill. Id. at § 146.
The bill in equity authorized by § 4915 is fundamen-
tally different from a bill of review. Although the § 4915
action is “in fact, and necessarily, a part of the application
for a patent,” Gandy, 122 U.S. at 439, it is not a bill of
review. A bill of review was a mechanism by which a
court could reverse its own decree. 2 Street, Federal
Equity Practice § 2121 (1909) (“that a bill of review will lie
only in the court where the decree to be reversed was
rendered is subject to no exception whatever”) (emphasis
added). The Supreme Court explained the distinction in
29 HYATT v. KAPPOS
Barrow v. Hunton, 99 U.S. 80 (1878): a bill in equity
authorized “the investigation of a new case arising upon
new facts, although having relation to the validity of an
actual judgment or decree,” while a bill of review involved
“a mere revision of errors and irregularities, or of the
legality and correctness of the judgments and decrees.”
Id. at 82-83. Because the bill in equity under § 4915 was
not a bill of review, the evidentiary constraints peculiar to
a bill of review do not control the admissibility of evidence
in a § 145 civil action. Rather, the action is a civil action
in which the district court is authorized to “adjudge that
such applicant is entitled to receive a patent for his inven-
tion . . . as the facts of the case may appear.” 35 U.S.C.
§ 145. While a § 145 proceeding is not completely inde-
pendent from the prosecution process in the Patent Office,
neither is it comparable to a bill of review.
Certainly, the proceedings before the Patent Office
remain relevant in a § 145 action. As we explained in
Fregeau, “in the absence of additional evidence affecting a
particular finding,” the district court must apply the
court/agency standard of review to that fact finding. 776
F.2d at 1038. This deferential standard of review applies
in recognition that the fact findings were made by the
Patent Office—the knowledgeable agency charged with
assessing patentability. “On the other hand, where new
evidence is presented to the district court on a disputed
fact question, a de novo finding will be necessary to take
such evidence into account together with the evidence
before the board.” Id. We have also concluded that issues
(and evidence relating to new issues) that were not raised
in the Patent Office proceedings generally may not be
raised in a § 145 proceeding. See Conservolite, Inc. v.
Widmayer, 21 F.3d 1098, 1102 (Fed. Cir. 1994) (listing
circumstances in which new issues may be raised before
the district court). Moreover, as we observed in Fregeau,
HYATT v. KAPPOS 30
in adjudicating entitlement to a patent, the district court
must consider the record before the Patent Office as well
as any new evidence admitted by the applicant. 776 F.2d
at 1038. Although the Patent Office proceedings do
impact § 145 proceedings in these various ways, we
conclude that, consonant with the language of the statute,
legislative history, and Supreme Court precedent, the
only limitations on the admissibility of evidence in § 145
proceedings (for issues raised before the Patent Office) are
the Federal Rules of Evidence and Civil Procedure.
Although we reject the Director’s proposed restriction
on admissibility, the district court may consider the
proceedings before and findings of the Patent Office in
deciding what weight to afford an applicant’s newly-
admitted evidence. As with any evidence introduced in a
civil action, the weight given to evidence introduced by an
applicant in a § 145 action falls within the discretion of
the district court. Should the facts of a particular case
cast suspicion on new evidence that an applicant failed to
introduce before the Patent Office, the district court in a
§ 145 action would be within its discretion to give that
evidence less weight. Indeed, as discussed above, courts
have considered an applicant’s failure to introduce evi-
dence before the Patent Office in determining what
weight to afford to the evidence. See Standard Cartridge
Co., 77 F. at 638 (concluding that the evidentiary weight
of new witness testimony on oral declarations supposedly
made by the patentee who died and thus lost all opportu-
nity to explain or deny was “much impaired from the fact
that . . . it was not introduced during the interference
proceedings”); Western Electric Co., 177 F. at 228-29
(finding new recollections unconvincing: “And how comes
it that the testimony of these witnesses, at this later date,
comes out with so much greater definiteness than it came
out at the earlier date, when, under ordinary circum-
31 HYATT v. KAPPOS
stances, the event, being much more recent, ought to have
been fresher in the witnesses’ minds?”) The practice of
giving less weight to evidence whose reliability is im-
pacted by an applicant’s failure, without explanation, to
provide it to the Patent Office, is entirely proper, and this
practice is fully consistent with the rule that we announce
today.
Quite separate from the Director’s proposal, the dis-
sent would have us rely on Citizens to Preserve Overton
Park v. Volpe, 401 U.S. 402, 414-20 (1971) to hold that the
only new evidence that we should allow is that which the
applicant could not bring to the Patent Office due to the
inadequacies of the Patent Office’s procedures. Dissent 7-
9. First, the Director expressly rejects the applicability of
Overton Park to § 145. Dir. Br. 19, n.4 (“We do not con-
tend that an applicant’s ability to introduce new evidence
under Section 145 is limited to circumstances in which
‘agency factfinding procedures are inadequate.’” citing
Overton Park). Additionally, the statute in question in
Overton Park only provided for “judicial review” of agency
action. 401 U.S. at 410. Section 145 specifically permits
a “civil action” where the district court may adjudge
entitlement to a patent “as the facts in the case may
appear.” Where the statute permits a “civil action” in
relation to agency actions, the Supreme Court has held
that this amounts to a trial de novo. See Chandler v.
Roudebush, 425 U.S. 840, 845-46, 862 (1976) (“Here, by
contrast, there is ‘specific statutory authorization’ of a
district court ‘civil action,’ which both the plain language
of the statute and the legislative history reveal to be a
trial de novo.”). Here, the language of the statute and
legislative history support the admission of new evidence
in § 145 actions subject only to the Federal Rules of
Evidence and Civil Procedure.
HYATT v. KAPPOS 32
2.
With respect to the Director’s APA argument, the Di-
rector does not assert that the APA controls the admissi-
bility of evidence in a § 145 action. To the contrary, the
Director consistently acknowledges throughout his brief
that new evidence is admissible in a § 145 action—unlike
a typical APA action, in which judicial review is strictly
limited to the administrative record. The Director’s
argument instead is that when no new evidence is admit-
ted in a § 145 action, the district court must review the
fact findings of the Patent Office on the administrative
record and subject to the APA.
This is an uncontroversial proposition: it is well-
settled that a reviewing court must apply the APA’s
court/agency standard of review to Patent Office fact
findings when no new evidence is admitted in a § 145
action. If the parties to a § 145 action do not introduce
any new evidence before the district court, the court
reviews the case on the same record presented to the
agency and the reviewing court must apply the APA’s
substantial evidence standard to Patent Office fact find-
ings. See Mazzari, 323 F.3d at 1005.
But when a party to a § 145 action does introduce new
evidence, the court’s review is no longer limited to the
administrative record. Instead, the court must consider
the new evidence in addition to the record, and “[t]he
presence of such new or different evidence makes a fact-
finder of the district judge.” Zurko, 527 U.S. at 164.
Because the court must determine the weight and import
of this new evidence, we have held that the district court
in a § 145 action must make de novo fact findings with
respect to factual issues to which the new evidence re-
lates. Fregeau, 776 F.2d at 1038 (“where new evidence is
33 HYATT v. KAPPOS
presented to the district court on a disputed fact question,
a de novo finding will be necessary to take such evidence
into account together with the evidence before the board”);
see also Mazzari, 323 F.3d at 1005 (“if the parties choose
to present additional evidence to the district court [§ 145
action] . . . the district court would make de novo factual
findings if the evidence is conflicting [with the adminis-
trative record]”). The Director does not dispute that these
standards of review apply in a § 145 action.
At most, the Director argues that the principles of
deference to agency fact finding inherent in the APA
scheme would tend to support more restrictions on the
admissibility of evidence. However, this deference is
already embodied in the standard of review applicable in
a § 145 action. When the court reviews a case on the
administrative record—that is, when no party introduces
new evidence—the court applies the APA standard of
review to Patent Office fact findings. Mazzari, 323 F.3d
at 1005. When new evidence is introduced, the court acts
as a factfinder with respect to that new evidence and
would make de novo fact findings if the evidence conflicts
with any related Patent Office finding. Id.; see also
Zurko, 527 U.S. at 164. However, the court must still
consider the administrative record in making its fact
findings; we have made clear that the court’s de novo
finding must “take [new] evidence into account together
with the evidence before the board.” Fregeau, 776 F.2d at
1038. Therefore, the dual standards of review applicable
in a § 145 action maintain an appropriate level of defer-
ence to agency findings, while preserving to the court its
role as factfinder with respect to new evidence.
HYATT v. KAPPOS 34
3.
Finally, the Director presents various policy consid-
erations in support of its proposal that evidence is not
admissible unless it could not have reasonably been
presented to the Patent Office first. The Director first
argues that requiring plaintiffs to completely present all
arguments and evidence to the agency in the first in-
stance protects agency authority and promotes judicial
efficiency. Although we agree that encouraging full
disclosure to administrative tribunals is sound policy,
Congress—not the Federal Circuit—must decide how best
to do this. Congress heard extensive testimony on the
advantages and disadvantages of providing applicants
with a civil action to obtain a patent. In fact, Congress
heard testimony on this very issue: the former Assistant
Commissioner of Patents argued that § 4915 “should be
cut out entirely for ex parte applications,” to force an
applicant to introduce “all the testimony pertinent to his
case” to the Patent Office. To Amend Section 52, 69th
Cong., 1st Sess., at 76. This was a policy decision commit-
ted to the sole discretion of Congress; we may not replace
Congress’ judgment with our own.
The Director asserts that if we do not limit an appli-
cant’s right to introduce new evidence in a § 145 action,
applicants will inevitably choose this route of review over
a direct appeal under § 141 or will withhold evidence from
the Patent Office to avoid generating adverse prosecution
history. To deter applicants from exactly the type of
procedural gaming that concerns the Director, Congress
imposed on the applicant the heavy economic burden of
paying “[a]ll the expenses of the proceedings” regardless
of the outcome. 35 U.S.C. § 145. An applicant has every
incentive to provide the Patent Office with the best evi-
35 HYATT v. KAPPOS
dence in its possession, to obtain a patent as quickly and
inexpensively as possible. “It would be counterintuitive
for an applicant to deliberately withhold non-cumulative
evidence that would help persuade the BPAI to reverse
the examiner’s rejection, and instead . . . present it later
on in a civil action when the party (as plaintiff) would be
obligated to pay all the expenses -- including the defen-
dant PTO’s expenses.” NYIPLA Br. at 13; see also IPO
Br. at 17 (“applicants proceeding before the PTO strike a
strategic balance, submitting evidence likely sufficient to
obtain a patent while avoiding overburdening the PTO”).
Indeed, the fact that the vast majority of applicants
pursue an on-the-record appeal instead of a § 145 action
indicates that applicants generally consider the evidence
before the Patent Office to be sufficient. Where an appli-
cant decides to pursue a § 145 action, this may reflect a
belief that the application at issue is or could be especially
commercially significant; in such a case, the applicant
likely believes that the additional cost of a § 145 action
may be merited. See AIPLA Br. at 1.
Next, the Director asserts that interpreting § 145 to
allow applicants to freely introduce new evidence before
the district court would disturb the rule that arguments
waived in administrative proceedings may not be raised
for the first time in federal court. We have held that, in
general, parties may not raise issues in the district court
that were not raised during the proceedings before the
Patent Office or by the Board’s final decision. Conser-
volite, 21 F.3d at 1102 (listing exceptions where courts
may allow new evidence on new issues). However, this
rule does not preclude parties from introducing additional
evidence as to issues that were raised before the Patent
Office. Here, the issue is written description—the subject
of Mr. Hyatt’s excluded declaration—and was raised
HYATT v. KAPPOS 36
before the Patent Office. Therefore, the doctrine of waiver
is not applicable to this case.
D.
We hold that new evidence is admissible in a civil ac-
tion under 35 U.S.C. § 145, subject only to the Federal
Rules of Evidence and Federal Rules of Civil Procedure.
We now consider whether, under this standard, the
district court abused its discretion in excluding Mr.
Hyatt’s declaration.
The district court found that Mr. Hyatt’s failure to ex-
plain why he did not submit his declaration to the Patent
Office was negligent. Stating that it “need not consider
evidence negligently submitted after the end of adminis-
trative proceedings,” the court excluded Mr. Hyatt’s
declaration. Hyatt, 2005 U.S. Dist. LEXIS 45319, at *26.
The district court erred in determining that Mr. Hyatt’s
negligence affected admissibility and therefore abused its
discretion in excluding the declaration. 4
CONCLUSION
For the reasons stated herein, the district court
abused its discretion in excluding Mr. Hyatt’s declaration.
We therefore vacate the judgment of the District Court for
the District of Columbia and remand for further proceed-
ings consistent with this opinion.
VACATED AND REMANDED
4 Nothing in In re Alton, 76 F.3d 1168 (Fed. Cir.
1996) is inconsistent with our decision today. An appli-
cant may respond to a written description rejection in
whatever way the applicant deems effective.
United States Court of Appeals
for the Federal Circuit
__________________________
GILBERT P. HYATT,
Plaintiff-Appellant,
v.
DAVID KAPPOS, DIRECTOR, PATENT AND
TRADEMARK OFFICE,
Defendant-Appellee.
__________________________
2007-1066
__________________________
Appeal from the United States District Court for the
District of Columbia in Case No. 03-CV-901, Judge Henry
H. Kennedy, Jr.
__________________________
NEWMAN, Circuit Judge, concurring in part, dissenting in
part.
I join the en banc court’s holding that new evidence may
be provided in a civil action brought in the district court
under 35 U.S.C. §145. However, the court also holds that
when no new evidence is provided, the findings and rulings
of the PTO receive the same deferential treatment in the
district court as would apply if the cause were not a civil
action under section 145, but instead were an Administra-
tive Procedure Act direct appeal to the Federal Circuit
under 35 U.S.C. §141. That is not the statutory plan.
HYATT v. KAPPOS 2
The statutory plan is designed to differ from such a du-
plicative procedure, not to create it. Nonetheless, the court
today holds that for those issues for which the applicant
relies on the same evidence as was before the patent exam-
iner, the ruling of the PTO is not determined de novo but is
reviewed with APA deference, identically to the section 141
appeal, except that the decision is initially made by one
judge in the district court, en route to three-judge review if
appeal is then taken to the Federal Circuit. No party pre-
sented or even contemplated such a redundant procedure,
and no amicus discussed it. It is contrary to statute, to
precedent, and to almost two centuries of legislative policy.
Section 145 requires the district court to determine
whether “such applicant is entitled to receive a patent for
his invention . . . as the facts in the case may appear.” Since
it is a de novo proceeding, the PTO findings and fact-based
rulings are not reviewed on the deferential “substantial
evidence” standard, and the methodology of analysis of the
evidence does not depend on whether the PTO had also
received the same evidence. Although an applicant who
chooses a section 145 civil action is quite likely to present
new evidence as to some issues, on other issues the appli-
cant may choose to reargue the evidence that was before the
PTO.
Usually the evidence before the PTO consists of refer-
ences cited during examination—with the applicant argu-
ing, in a section 145 action, that the PTO misweighed or
misapplied or misunderstood the evidence. Such issues are
often present in a section 145 action, where they receive de
novo determination, whether or not new evidence is adduced
in the district court. The purpose of the section 145 pro-
ceeding is to achieve fresh judicial determination of pat-
entability issues that had been decided by the Patent Office,
and to conduct this determination de novo on the evidence
3 HYATT v. KAPPOS
before the court, whether or not the same evidence or all of
it was before the examiner. Thus, although this court’s
affirmation of the principle of the de novo section 145 action
is salutary, somehow a new flaw has crept in. The court’s
promulgation of a different intellectual mechanism, depend-
ing on whether an issue did or did not receive evidence in
addition to that which was before the examiner, creates a
convoluted analytical process, a burden on the court as well
as on objective analysis.
As the en banc court explains, the legislative purpose of
the equity action was to assure that the courts had the last
word as to entitlement to a patent. For a brief period after
patent examination was renewed in 1836, only priority
contests between competing inventors had judicial recourse.
The Patent Act of 1839 extended judicial participation to
“all cases where patents are refused for any reason what-
ever.” As the patent statutes continued to receive legisla-
tive attention, the Court explained in Butterworth v. Hoe,
112 U.S. 50, 61 (1884):
It is thereby provided that the applicant may have
remedy by bill in equity. This means a proceeding
in a court of the United States having original eq-
uity jurisdiction under the patent laws, according to
the ordinary course of equity practice and proce-
dure. It is not a technical appeal from the patent-
office . . . confined to the case as made in the record
of that office, but is prepared and heard upon all
competent evidence adduced, and upon the whole
merits.
The Court observed that “such de novo determination has
been the uniform and correct practice in the circuit courts.”
Id.; see, e.g., Ex parte Squire, 22 F. Cas. 1015, 1016
(C.C.E.D. Mo. 1877) (“[T]he hearing is altogether independ-
HYATT v. KAPPOS 4
ent of that before the commissioner, and takes place on such
testimony as the parties may see fit to produce agreeably to
the rules and practice of a court of equity.”).
The Court’s decision in Dickinson v. Zurko, 527 U.S. 150(1999), applying the Administrative Procedure Act’s stan-
dard of review to direct appeals to the Federal Circuit on the
administrative record, did not deal with the section 145 civil
action. Indeed, the APA recognized the preservation of
previously existing judicial review mechanisms including
those that provided for a trial de novo, stating that “[t]he
form of the proceeding for judicial review is the special
statutory review proceeding relevant to the subject matter
in a court specified by the statute.” 5 U.S.C. §703. The APA
states that nothing in the judicial review provisions of the
APA “limit[s] or repeal[s] additional requirements imposed
by statute or otherwise recognized by law.” 5 U.S.C. §559.
Neither the APA nor Zurko obliterated the purpose or
changed the structure of the section 145 action as a full de
novo proceeding. In preserving this traditional path, anal-
ogy is seen to tax refund suits in the district courts or the
Court of Federal Claims, where “a refund suit is a de novo
proceeding.” Democratic Leadership Council, Inc. v. United
States, 542 F. Supp. 2d 63, 70 (D.D.C. 2008); see Vons Cos. v.
United States, 51 Fed. Cl. 1, 5 (2001) (“We begin with the
axiomatic principle that tax refund cases are de novo pro-
ceedings. Lewis v. Reynolds, 284 U.S. 281, 283 (1932).
Factual issues in such cases ‘are tried . . . with no weight
given to subsidiary factual findings made by the Service in
its internal administrative proceedings.’ Cook v. United
States, 46 Fed. Cl. 110, 113 (2000). See also Dixon v. United
States, 381 U.S. 68, 74–75 (1965).”).
Such a de novo path, whether or not on the same evi-
dence that was before the examiner, has long characterized
5 HYATT v. KAPPOS
section 145 actions and its predecessor bills in equity. See,
e.g., Bernardin v. Northall, 77 F. 849, 851 (C.C.D. Ind. 1897)
(“The constitution and laws give a property right in his
invention or discovery to an inventor, and it was the mani-
fest legislative intent that such inventor should not be
deprived of his property right in his invention until he had
had his day in a court in which the party aggrieved by the
determination of an executive officer might pursue his
remedy judicially, according to the practice of a court of
chancery.”).
Legislation concerning the bill of equity/civil action con-
sistently recognized that the proceeding is a “new suit.” For
example, in connection with the Patent Act of 1927 the
Chairman of the House Committee on Patents, Congress-
man Albert H. Vestal, stated “if a party feels aggrieved, he
can bring his suit in the equity court, but it is not an appeal.
It is the bringing of a new suit.” To Amend Section 52 of
Judicial Code and Other Statutes Affecting Procedure in
Patent Office: Hearings on H.R. 6252 and H.R. 7087 Before
the H. Comm. on Patents, 69th Cong., 1st Sess. 36 (1926).
The issues of patentability are determined in accordance
with the laws of patentability, on original jurisdiction undis-
turbed by whether the same evidence was previously before
the patent examiners. As summarized by Emerson String-
ham, Patent Interference Equity Suits §7942, at 69 (1930):
“A suit by a defeated applicant is an action de novo for the
purpose of securing a patent.”
No rule or protocol requires that the civil suit cannot re-
ceive de novo adjudication based on the same documentary
evidence that was before the Patent Office. See Central Ry.
Signal Co. v. Jackson, 254 F. 103, 105 (E.D. Pa. 1918)
(observing that although the purpose of a proceeding under
section 4915 “is to secure the issue of a patent, the issue of
which has been refused, it does not seek that issue through
HYATT v. KAPPOS 6
a reversal of the ruling first made, but through an inde-
pendent finding that the applicant is entitled upon the
merits of his application to a patent”). The Court has re-
peatedly confirmed this understanding. See In re Hein, 166
U.S. 432, 439 (1897) (“The bill in equity provided for by
section 4915 is wholly different from the proceeding by
appeal from the decision of the commissioner . . . . The one
is in the exercise of original, the other of appellate, jurisdic-
tion.”); Gandy v. Marble, 122 U.S. 432, 439 (1887) (“[T]he
proceeding by bill in equity, under section 4915, on the
refusal to grant an application for a patent, intends a suit
according to the ordinary course of equity practice and
procedure, and is not a technical appeal from the patent-
office, nor confined to the case as made in the record of that
office, but is prepared and heard upon all competent evi-
dence adduced, and upon the whole merits . . . .” (citing
Butterworth, 112 U.S. at 61)).
The applicant may not wish, or need, to present new
evidence as to every issue of patentability. P.J. Federico
observed in his definitive article, “Evolution of Patent Office
Appeals,” that “[t]he bill in equity is not a technical appeal
from a decision of the Patent Office, but is ‘a suit according
to the ordinary course of equity practice and procedure.’” 22
J. Pat. Off. Soc’y 838, 937 (1940). Such “ordinary course”
takes up the issues that the examiner had decided adversely
to the applicant, on whatever evidence the applicant and the
Patent Office present to the district court. I have come upon
no legislative or precedential hint that there should be
judicial deference in the equity action to the examiner’s
findings for those issues upon which no new evidence is
presented to the court.
The history of section 145 differs from that for priority
contests between competing inventors, as discussed in
Morgan v. Daniels, 153 U.S. 120 (1894), now relied on by
7 HYATT v. KAPPOS
this court as meaning that in the absence of new evidence
“the district court reviews the Patent Office fact findings for
substantial evidence (i.e., according to the court/agency
standard of review).” Maj. Op. 25. That interpretation is
contrary to Morgan v. Daniels itself, for the Court there
recognized that it was dealing with a different statute,
“where the question decided in the Patent Office is one
between contesting parties as to priority of invention.” 153
U.S. at 125. Judicial review of priority contests is now
codified at 35 U.S.C. §146, which expressly provides for
admission of the PTO record to “have the same effect as if
originally taken and produced in the suit.” There is no
similar provision in section 145, which instead requires the
district court to adjudge entitlement to a patent “as the facts
in the case may appear.” Section 145 calls upon the inde-
pendent judgment of the district court, whether the evi-
dence before the court augments or simply repeats the
evidence that was before the Patent Office. 1
This court’s new dual standard of evidentiary analysis
in section 145 actions will not only come as a surprise to
practitioners, but raises new problems of adjudication, for
the weight of findings on various issues often must be
balanced, in reaching the ultimate determination of pat-
entability. I must, respectfully, dissent from this additional
and unnecessary encumbrance on the patenting process.
1 The PTO Solicitor and my colleagues in dissent ar-
gue that applicants will deliberately withhold evidence in
their possession, in order to spring it on the district court
under section 145. I share the view of the amici curiae that
it is unlikely that applicants will withhold winning evidence
from the examiner, in favor of a multi-year and expensive
civil action in the district court.
United States Court of Appeals
for the Federal Circuit
__________________________
GILBERT P. HYATT,
Plaintiff-Appellant,
v.
DAVID KAPPOS, DIRECTOR, PATENT AND
TRADEMARK OFFICE,
Defendant-Appellee.
__________________________
2007-1066
__________________________
Appeal from the United States District Court for the
District of Columbia in case No. 03-CV-901, Judge Henry
H. Kennedy, Jr.
ON PETITION FOR REHEARING EN BANC
__________________________
DYK, Circuit Judge, with whom GAJARSA, Circuit Judge,
joins, dissenting.
In my view today’s majority decision reflects a re-
markable departure from settled principles of administra-
tive law. The majority holds today that a patent
applicant may decline to present his evidence supporting
a patent application to the Patent and Trademark Office
(“PTO”), the expert agency charged by Congress with
reviewing patent applications. Instead, he may elect to
present that evidence to a district court in a de novo
proceeding. As the majority itself states, “We hold that 35
HYATT v. KAPPOS 2
U.S.C. § 145 imposes no limitation on an applicant’s right
to introduce new evidence before the district court, apart
from the evidentiary limitations applicable to all civil
actions . . . .” Maj. op. at 5 (emphasis added). Moreover,
when the district court considers that new evidence, it
owes no deference to the PTO’s resolution of the fact
issues. Rather, the district court makes de novo findings
of fact. See id.The established administrative law standard, embod-
ied in section 706 of the Administrative Procedure Act
(“APA”), 5 U.S.C. § 706, requires judicial review on the
agency record and submission of all relevant evidence to
the agency. In general, it permits supplementation in
court only when agency procedures are inadequate. See
Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402,
414–20 (1971). Here, the agency procedures are inade-
quate only insofar as they do not provide for live testi-
mony.
There is no question that Hyatt’s affidavit evidence
here could have been submitted to the Patent Office
during the examination. The PTO rules specifically
provide that “[w]hen any claim of an application . . . is
rejected or objected to, any evidence submitted to traverse
the rejection or objection on a basis not otherwise pro-
vided for must be by way of an oath or declaration under
this section.” 37 C.F.R. § 1.132. The Manual of Patent
Examining Procedures recognizes that section 1.132 “sets
forth the general policy of the Office consistently followed
for a long period of time of receiving affidavit evidence
traversing rejections or objections.” MPEP § 716 (8th ed.
Rev. 7, Sept. 2008). 1 But the examination proceedings are
1 The PTO rules also provide that affidavits may be
submitted after final rejection “upon a showing of good
and sufficient reasons why the affidavit or other evidence
3 HYATT v. KAPPOS
based on a paper record (except for interviews with the
examiner). There is no provision for the receipt of live
testimony from witnesses.
As discussed below, while section 145 contemplates
the introduction of live testimony (because that testimony
could not be submitted to the PTO), section 145 does not
provide for a trial de novo or excuse the applicant from
submitting affidavit evidence to the PTO. Limiting new
evidence in the section 145 action to evidence, such as live
testimony, that could not be presented to the PTO in the
first instance would recognize that section 145 is fully
consistent with traditional administrative law standards.
Allowing a trial de novo in the district court deni-
grates the important expertise of the PTO, is contrary to
established principles of administrative law, finds no
support in the language of the statute, and is contrary to
decisions of at least five other circuits. The majority
opinion invites applicants to deliberately withhold evi-
dence from the PTO in favor of a more hospitable district
court forum. Today’s decision reflects yet another mis-
guided effort to craft special rules for patent cases that
the Supreme Court in other cases has held to be imper-
missible. See eBay v. MercExchange, LLP, 547 U.S. 388(2006) (overturning this court’s special test for issuing
permanent injunctions in patent cases); MedImmune v.
Genetech, Inc., 549 U.S. 118 (2007) (rejecting this court’s
Declaratory Judgment Act test). The majority decision is
all the more remarkable because the Court has previously
rejected our efforts to craft a special rule for review of
PTO decisions in Dickinson v. Zurko, 527 U.S. 150, 152
(1999), holding that review under section 141 must pro-
is necessary and was not earlier presented.” 37 C.F.R. §
1.116(e).
HYATT v. KAPPOS 4
ceed under the established administrative law substantial
evidence standard. I respectfully dissent.
I
The majority speaks hardly at all to the important ex-
pert role that the PTO plays in patent examination pro-
ceedings. The statute provides a variety of grounds for
rejecting a patent application. In each case the inquiry is
either entirely factual or has factual components. For
example, questions involving anticipation, obviousness,
indefiniteness, written description, and enablement
typically involve fact questions that are beyond the
knowledge of an ordinary layman, and must be addressed
by those skilled in the particular art.
The PTO examiner corps and the Board of Patent Ap-
peals and Interferences (“Board”) possess such expertise,
and the examination process is carefully structured to
utilize that expertise. For example, when a patent appli-
cation is received, the proposed invention is classified so
that it can be given to the proper art unit, which then
determines whether the application “properly belongs” in
the unit and assigns the application to an examiner
within the art unit with the expertise necessary to con-
duct a field search of the prior art. See MPEP §§ 903.02,
903.08, 904 (8th ed. Rev. 7, Sept. 2008). With respect to
the Board, its Standard Operating Procedures state that
the Chief Judge should “designate judges as the merits
panel to decide ex parte appeals based upon their legal
and technical expertise.” B.P.A.I., Standard Operating
Procedure 1 (Revision 13) (2009), available at
http://www.uspto.gov/web/offices/dcom/bpai/sop1.pdf.
The importance of PTO expertise in the examination
process is confirmed by the history of the statute. Al-
though the original patent act provided for examination of
patents, Act of Apr. 10, 1790, ch. 7, 1 Stat. 109, 112, three
5 HYATT v. KAPPOS
years later, Congress abolished the examination of pat-
ents, and for the next three decades the United States
operated under a regime of patent registration. See Act of
Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318; P.J. Federico,
Evolution of Patent Office Appeals, 22 J. Pat. Off. Soc'y
838 (1940). This approach was found to be entirely unsat-
isfying.
The legislative history of the 1836 Act, substituting
an examination system for the registration system, cites
the following evils of the existing registration system:
[1] A considerable portion of all the patents
granted are worthless and void . . . ; [2] The coun-
try becomes flooded with patent monopolies, em-
barrassing to bona fide patentees, whose rights
are thus invaded on all sides . . . ; [3] Out of this
interference and collision of patents and privi-
leges, a great number of lawsuits arise, which are
daily increasing in alarming degree, onerous to
the courts, ruinous to the parties, and injurious to
society; [4] It opens the door to frauds, which have
already become extensive and serious.
S. Rept. No. 24-338, at 3 (1836). In the new law in 1836,
Congress created the Patent Office and the post of Com-
missioner of Patents, and this was intended to “establish
a check upon the granting of patents, allowing them to
issue only for such inventions as are in fact new and
entitled, by the merit of originality and utility, to be
protected by law.” Id. at 4.
The system created by Congress relied heavily on the
expertise of the Commissioner and his staff who were
responsible for evaluating the merits of patent applica-
tions. See Act of July 4, 1836, ch. 357 at §§ 2, 7, 5 Stat.
HYATT v. KAPPOS 6
117, 118–20. As the legislative history reveals, the pur-
pose of the act was to bring specialized expertise to bear
on questions of patentability:
The duty of examination and investigation neces-
sary to a first decision at the Patent Office, is an
important one, and will call for the exercise and
application of much scientific acquirement and
knowledge of the existing state of the arts in all
their branches, not only our own, but in other
countries. Such qualifications in the officers
charged with the duty, will be the more necessary
and desirable, because the information upon which
a rejection is made at the office, will be available
in the final decision. It becomes necessary, then,
to give the Patent Office a new organization, and
secure to it a character altogether above a mere
clerkship. The competency and efficiency of its of-
ficers should correspond with their responsibility,
and with the nature and importance of the duties
required of them.
S. Rep. No. 24-338, at 4 (emphases added). An applicant
dissatisfied with the Commissioner's decision could ap-
peal to a “board of examiners” appointed by the Secretary
of State. In creating the Board, Congress also drew on the
expertise of those skilled in the art. At least one board
member was “to be selected, if practicable and convenient,
for his knowledge and skill in the particular art, manufac-
ture, or branch of science to which the alleged invention
appertains.” Act of July 4, 1836, ch. 357 at § 7, 5, Stat.
117, 119–20. The de novo standard in today’s decision
will allow applicants to bypass the PTO expertise that
7 HYATT v. KAPPOS
Congress viewed as critical to effective patent examina-
tion. 2
II
Today’s decision not only departs from the Congres-
sional design for the examination of patents. It also
departs from settled principles of administrative law
applicable to expert agency review generally and to the
PTO in particular. The Supreme Court has emphasized
that in general the PTO should be treated like other
administrative agencies; that patent cases are subject to
the same general administrative law principles under the
APA; and that departure from those principles requires
clear statutory language––language that is absent here.
See Zurko, 527 U.S. at 161–65; In re Comiskey, 554 F.3d
967, 974 (Fed. Cir. 2009).
2 Allowing the applicant to bypass PTO expertise is
particularly problematic where, as here, the applicant
submitted multiple applications over a long period with
multiple claims and multiple rejections. The ’702 applica-
tion at issue in this case is one of at least 39 identical
applications filed by Hyatt in 1995. Appellee’s Brief at 3.
Indeed, Hyatt appears to have a long history before the
Board as well as this court. See, e.g., Hyatt v. Dudas, 492
F.3d 1365, 1371 (Fed. Cir. 2007) (rejecting Hyatt’s claim
that the examiner failed to establish a prima facie case for
a lack of written description); In re Hyatt, 211 F.3d 1367,
1371 (Fed. Cir. 2000) (rejecting Hyatt’s claim that the
Board failed to analyze the claims on an element-by-
element and claim-by-claim basis and affirming the
Board’s anticipation determination); In re Hyatt, No. 87-
1597, 1988 WL 57813. at *2 (Fed. Cir. 1988) (holding that
the examiner raised substantial questions concerning
enablement, shifting the burden to applicant, who failed
to offer any competent evidence to overcome the exam-
iner’s prima facie case).
HYATT v. KAPPOS 8
Except in very rare circumstances, judicial review of
administrative action is based on the agency record. See,
e.g., Camp v. Pitts, 411 U.S. 138, 141–42 (1973); Overton
Park, 401 U.S. at 414–20; Axiom Res. Mgmt., Inc. v.
United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009) (“The
focus of judicial review of agency action remains the
administrative record, which should be supplemented
only if the existing record is insufficient to permit mean-
ingful review consistent with the APA.”); 33 Wright &
Koch, Federal Practice and Procedure: Judicial Review of
Administrative Action § 8306 (2006) (“[E]xcept in the rare
case, review in a federal court must be based on the
record before the agency and, hence, a reviewing court
may not go outside the administrative record.”).
As the Supreme Court stated in Overton Park, the cir-
cumstances under which de novo review of factual issues
is appropriate are “narrow” indeed. 401 U.S. at 414. One
example of such an exception is when “the agency fact-
finding procedures are inadequate.” 3 Id. at 415. This
same standard could apply to PTO review. As noted
earlier, the PTO in examination proceedings generally
can receive affidavit evidence but cannot receive live
testimony. The PTO agrees that in such circumstances
live testimony in district court may be appropriate.
Appellee’s Brief at 9 (noting an applicant can introduce
new evidence that “the applicant could not reasonably
3 Another exception enumerated in Overton
Park is not applicable here. De novo review is also au-
thorized “when issues that were not before the agency are
raised in a proceeding to enforce nonadjudicatory agency
action.” 401 U.S. at 415. This exception does not apply to
section 145 cases because new issues cannot be raised in a
section 145 action. See Newman v. Quigg, 877 F.2d 1575,
1579 (Fed. Cir. 1989) (citing DeSeversky v. Brenner, 424
F.2d 857, 858 (D.C. Cir. 1970)).
9 HYATT v. KAPPOS
have provided to the agency in the first instance”). For
example, in a narrow class of cases under section 145, the
outcome will hinge on credibility determinations, such as
where there is a question about the date of reduction to
practice. In such circumstances, PTO procedures may be
inadequate and it makes sense to permit the district court
to take live testimony under Overton Park to resolve
credibility issues. Where credibility issues are not pre-
sented, however, there is nothing inadequate about the
PTO factfinding process, and under general administra-
tive law principles, the district court should be confined to
the record presented to the PTO where the applicant
could have presented the evidence in the first instance. 4
The necessity of presenting evidence to the adminis-
trative agency in the first instance when the agency can
receive the evidence is supported as well by principles of
4 While the PTO states that “[w]e do not contend
that an applicant’s ability to introduce new evidence is
limited to situations in which ‘agency factfinding proce-
dures are inadequate,’” Appellee’s Brief at 19 n.4, there is
little difference between the standard for the receipt of
new evidence urged by the PTO and the standard I think
is appropriate. The PTO agrees that new evidence that
could not be submitted to the PTO may be introduced in
district court. Id. at 29. In exceptional circumstances,
the PTO apparently would allow other evidence in district
court where there was a reasonable excuse for not submit-
ting it to the PTO in the first instance and the evidence
would be conclusive. See id. Those circumstances seem
to be limited to situations where the evidence “in charac-
ter and amount carries thorough conviction that the
agency’s decision was mistaken.” Id. (internal quotation
omitted). That describes situations where the failure to
submit the evidence to the PTO would be harmless error.
Where new evidence is discovered after the PTO proceed-
ing and is presented to the district court, the district court
in most instances should remand to the agency for its
initial consideration.
HYATT v. KAPPOS 10
administrative exhaustion, which require that evidence
and arguments both be presented in the first instance to
the agency. The ordinary rule is that “no one is entitled
to judicial relief for a supposed or threatened injury until
the prescribed administrative remedy has been ex-
hausted.” McKart v. United States, 395 U.S. 185, 194
(1969) (internal quotation omitted); see Woodford v. Ngo,
548 U.S. 81, 90 (2006). “Exhaustion concerns apply with
particular force when the action under review involves
exercise of the agency’s discretionary power or when the
agency proceedings in question allow the agency to apply
its special expertise.” McCarthy v. Madigan, 503 U.S. 140,
145 (1992) (citing McKart, 395 U.S. at 194) (emphasis
added). The majority ignores these important principles
of administrative law, adopting a rule that effectively
allows a patentee to decline to present his evidence sup-
porting patent issuance to the PTO in the first instance.
III
The majority’s approach also finds no support in the
language of the statute. Section 145 provides:
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 District of Co-
lumbia if commenced within such time after such
decision, not less than sixty days, as the Director
appoints. The court may adjudge that such appli-
cant is entitled to receive a patent for his inven-
tion, 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
11 HYATT v. KAPPOS
and such adjudication shall authorize the Director
to issue such patent on compliance with the re-
quirements of law. All the expenses of the pro-
ceedings shall be paid by the applicant.
35 U.S.C. § 145 (emphasis added). 5
Contrary to the majority, the language of section 145
providing for district court review does not in any way
suggest that the proceedings should be de novo rather
than generally on the agency record. Even before the
1946 enactment of the APA, see Act of June 11, 1946, ch.
324, 60 Stat. 237, the Supreme Court had held that
5 The comparable provision for interference pro-
ceedings, section 146, provides:
Any party to an interference dissatisfied with the
decision of the Board of Patent Appeals and Inter-
ferences on the interference, may have remedy by
civil action, if commenced within such time after
such decision, not less than sixty days, as the Di-
rector appoints or as provided in section 141 of
this title, unless he has appealed to the United
States Court of Appeals for the Federal Circuit,
and such appeal is pending or has been decided.
In such suits the record in the Patent and Trade-
mark Office shall be admitted on motion of either
party upon the terms and conditions as to costs,
expenses, and the further cross-examination of the
witnesses as the court imposes, without prejudice
to the right of the parties to take further testi-
mony. The testimony and exhibits of the record in
the Patent and Trademark Office when admitted
shall have the same effect as if originally taken
and produced in the suit.
35 U.S.C. § 146 (emphasis added).
HYATT v. KAPPOS 12
provisions for district court or trial court review of agency
action would not be read to imply the power to go outside
the agency record. For example, in Tagg Bros. & Moor-
head v. United States, 280 U.S. 420 (1930), the Court held
that although the Packers and Stockyards Act of 1921, 7
U.S.C. §§ 181–229, provided for suits to be brought in
federal district court to enjoin the enforcement of agency
orders, this did not imply a trial de novo. 280 U.S. at444–45. The Court explained:
A proceeding under section 316 of the Packers and
Stockyards Act is a judicial review, not a trial de
novo. The validity of an order of the Secretary, like
that of an order of the Interstate Commerce Com-
mission, must be determined upon the record of the
proceedings before him . . . . On all other issues his
findings must be accepted by the court as conclu-
sive, if the evidence before him was legally suffi-
cient to sustain them and there was no
irregularity in the proceeding. To allow his find-
ings to be attacked or supported in court by new
evidence would substitute the court for the admin-
istrative tribunal as the rate-making body. Where
it is believed that the Secretary erred in his find-
ings because important evidence was not brought
to his attention, the appropriate remedy is to ap-
ply for a rehearing before him or to institute new
proceedings.
Id. at 443–45 (emphases added; footnote omitted; cita-
tions omitted).
The Court disposed of similar arguments in the con-
text of district court actions authorized by the judicial
review provision of the Communications Act of 1934, 47
U.S.C. § 402(a). See Nat'l Broad. Co. v. United States,
13 HYATT v. KAPPOS
319 U.S. 190, 227 (1943). The statute initially provided
for “suits in equity” to “enjoin, set aside, annul, or sus-
pend any order or requirement of the Commission . . . .” 6
Communications Act of 1934, ch. 652, Title IV, § 402(a),
48 Stat. 1064, 1093. The Court held that such suits were
not de novo, and the review was limited to the agency
record: “The court below correctly held that its inquiry
was limited to review of the evidence before the Commis-
sion. Trial de novo of the matters heard by the Commis-
sion and dealt with in its Report would have been
improper.” Id. at 227 (emphasis added).
After enactment of the APA in 1946, the Supreme
Court and other courts of appeals have repeatedly held
that broad, general language such as “bill in equity” or
“civil action” providing for trial court review does not
create trial de novo, and that much more specific lan-
guage is required. For example, in United States v. Carlo
Bianchi & Co., 373 U.S. 709 (1963), the Court held that
“suit[s]” brought in the Court of Claims under the
Wunderlich Act, Pub. L. No. 83-356, 68 Stat. 81 (1954), 7
6 This statute was later amended to transfer juris-
diction to three-judge panels of the district courts under
the Urgent Deficiencies Act of 1913, 38 Stat. 208, 219. A
proceeding to set aside an order of the Commission under
that act was also considered “a plenary suit in equity.”
Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407,
415 (1942).
7 The statute provides:
No provision of any contract entered into by the
United States, relating to the finality or conclu-
siveness of any decision of the head of any de-
partment or agency or his duly authorized
representative or board in a dispute involving a
question arising under such contract, shall be
pleaded in any suit now filed or to be filed as lim-
iting judicial review of any such decision to cases
HYATT v. KAPPOS 14
were not trials de novo. 373 U.S. at 713–15 (1963). The
Court noted that “the standards of review adopted in the
Wunderlich Act—‘arbitrary,’ ‘capricious,’ and ‘not sup-
ported by substantial evidence’—have frequently been
used by Congress and have consistently been associated
with a review limited to the administrative record.” Id. at
715. The Court gave the following general rule:
[T]he reviewing function is one ordinarily limited
to consideration of the decision of the agency or
court below and of the evidence on which it was
based. Indeed, in cases where Congress has simply
provided for review, without setting forth the stan-
dards to be used or the procedures to be followed,
this Court has held that consideration is to be con-
fined to the administrative record and that no de
novo proceeding may be held.
Id. at 715 (emphases added). Similarly, in Anderson v.
District of Columbia, 877 F.2d 1018 (D.C. Cir. 1989), the
District of Columbia Circuit held that under the Individu-
als with Disabilities Education Act, which explicitly
provides for a “civil action” in which the district court can
hear “additional evidence at the request of a party,” 20
U.S.C. § 1415(i)(2), “[t]he authority of the district court to
receive new evidence does not transform the review
proceedings into a trial de novo,” 877 F.2d at 1025.
where fraud by such official or his said represen-
tative or board is alleged: Provided, however,
[t]hat any such decision shall be final and conclu-
sive unless the same is fraudulent or capricious
or arbitrary or so grossly erroneous as necessar-
ily to imply bad faith, or is not supported by sub-
stantial evidence.
41 U.S.C. § 321 (emphasis in original).
15 HYATT v. KAPPOS
There is only one feature that distinguishes actions
under section 145 from agency review in other contexts.
Congress has provided for a dual avenue of review—
review in this court under section 141 based on the
agency record and review under section 145. This sug-
gests that the two types of review proceedings are differ-
ent, and that evidence that could not be submitted to the
PTO may be received in section 145 actions. But it does
nothing to suggest that district court review may proceed
on an entirely new record or hold de novo proceedings, or
that Congress intended to do anything more than permit
evidence to be presented in district court that could not be
presented before the Patent Office.
The APA contemplates that statutes providing for de
novo proceedings will specifically use that language.
Under 5 U.S.C. § 706(2)(F), a reviewing court may “set
aside agency action, findings, and conclusions” if “unwar-
ranted by the facts[,] to the extent that the facts are
subject to trial de novo by the reviewing court.” Other
federal statutes that have been held to provide for de novo
review provide for such review explicitly. See, e.g., Food
Stamp Act, 7 U.S.C. § 2023(a)(15) (“The suit in the United
States district court or State court shall be a trial de novo
by the court in which the court shall determine the valid-
ity of the questioned administrative action in issue . . .
.”). 8 This distinction has been repeatedly recognized. For
example, in Ibrahim v. U.S., 834 F.2d 52 (2d Cir. 1987),
the court held that,
8 See also 19 U.S.C. § 1592(e) (providing that, for
review of customs penalties for negligence or fraud,
“[n]otwithstanding any other provision of law, in any
proceeding commenced by the United States in the Court
of International Trade for the recovery of any monetary
penalty claimed under this section . . . all issues, includ-
ing the amount of the penalty, shall be tried de novo”).
HYATT v. KAPPOS 16
[t]he Food Stamp Act's de novo review provision
embodies a different and broader scope of review
than that available under the APA . . . [Cases re-
quiring review on the agency record are different
because there,] no statute or regulation provided
for de novo review. The APA therefore governed.
Here, in contrast, the Food Stamp Act specifically
provides that review of FNS determinations ‘shall
be a trial de novo.’ 7 U.S.C. § 2023(a). 9
Id. at 53–54.
As these statutes demonstrate, when Congress in-
tends review by de novo trial, Congress explicitly author-
izes de novo trial. In the absence of specific statutory
authorization, “de novo review is generally not to be
presumed.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607,
619 n.17 (1966). Section 145 does not include language
providing for “de novo” review or the equivalent.
The majority is unable to point to any Supreme Court
authority that has construed a statute not providing
explicitly for de novo review or the equivalent as provid-
ing for such review. To be sure, the majority claims that
Chandler v. Roudebush, 425 U.S. 840 (1976), recognizes
de novo review based solely on the provision for a district
court “civil action.” See Maj. op. at 31 (“Where the statute
permits a ‘civil action’ in relation to agency actions, the
9 See United States v. Ford Motor Co., 463 F.3d
1286, 1298 (Fed. Cir. 2006) (finding that even the explicit
language of § 1592(e) should interpreted narrowly as
providing for de novo review only of certain aspects of the
customs determination, not to “permit an importer to end-
run the protest provisions”).
17 HYATT v. KAPPOS
Supreme Court has held that this amounts to a trial de
novo.”). That is not accurate.
The Chandler Court found that the plain language
(and legislative history) of that particular statute did
provide for de novo review. Chandler, 425 U.S. at 844–46.
The Civil Rights Act of 1964 provided for “civil action[s]”
in district courts to redress discrimination against gov-
ernment employees. Id. at 844. Significantly, the statute
also provided that “the provisions of section 706(f)
through (k) as applicable shall govern civil actions
brought hereunder.” Id. at 844 (quoting 42 U.S.C. §
2000e–16(d) (1970 ed., Supp. IV)). Those sections, dealing
with civil actions involving private employees, had re-
peatedly been interpreted as providing for a trial de novo
based on specific language in the private employee provi-
sion. Id. at 844–45. The Court held that the incorpora-
tion of the private employee standard for a de novo trial
meant that there was to be a trial de novo in government
employee cases by virtue of the plain language of the
statute. Id. at 845–46. The Court reasoned that the
“terminology employed by Congress” in providing for a
“civil action” in section 706, relating to private sector
employees, “indicates clearly that the ‘civil action’ to
which private-sector employees are entitled . . . is to be a
trial de novo.” Id. “Since federal-sector employees are
entitled by § 717(c) to ‘file a civil action as provided in
section 706 [for private-sector employees]’ . . . [and] the
civil action provided in § 706 is a trial de novo, it would
seem to follow syllogistically that federal employees are
entitled to a trial de novo . . . .” Id. Thus, based on that
plain language of the statute and its legislative history, it
found the general presumption against de novo review
inapplicable because “here . . . there is a ‘specific statutory
authorization’ of a district court ‘civil action,’ which both
the plain language of the statute and the legislative
HYATT v. KAPPOS 18
history reveal to be a trial de novo.” Id. at 862. There is
no support for reading “civil action” language, standing
alone, as requiring a trial de novo. The Supreme Court’s
decision in Chandler supports that well-established rule.
IV
Additionally, the legislative history of the predecessor
of section 145, when enacted in 1927, provides no support
for the majority’s interpretation of the statutory text. The
majority relies wholly on hearing testimony. As the
Supreme Court stated in Kelly v. Robinson, 479 U.S. 36(1986), the Court has declined “to accord any significance
to . . . statements” made in hearings. 479 U.S. at 51 n.13.
Earlier, in McCaughn v. Hershey Chocolate Co., 283 U.S.
488 (1931), the Court noted, “such individual expressions
[as statements made in committee hearings] are with out
weight in the interpretation of a statute.” Id. at 493–94.
The majority’s decision here flies in the teeth of this
established principle.
Even if the statements in Committee hearings could
be considered relevant legislative history, the materials
cited by the majority would be entitled to little weight.
The 1927 legislation was based initially on a proposal
drafted by the American Bar Association. To Amend
Section 52 of the Judicial Code and Other Statutes Affect-
ing Procedure in the Patent Office: Hearings on H.R. 6252
and H.R. 7087 Before the H. Comm. On Patents, 69th
Cong. 14 (February 1926) [hereinafter To Amend Section
52]. The purpose of the proposal was to simplify the
appeals procedure both within the Patent Office and in
the courts. Id. at 3. Under section 4915 (section 145’s
predecessor) as it then existed, an appeal could be taken
from the Patent Office decision to the Supreme Court of
the District of Columbia. Act of March 2, 1927, ch. 273, §
11, 44 Stat. 1335, 1336–37. Thereafter a “bill in equity”
19 HYATT v. KAPPOS
proceeding could be brought to set aside the Patent Office
decision in district court. Id. The bills initially proposed
to eliminate the appeal to the Supreme Court of the
District of Columbia and to rely entirely on the bill in
equity as the form of judicial review. To Amend Section
52, at 9.
Hearings were initially held in February of 1926 in
the 69th Congress, First Session, on two separate bills.
Id. at 1–2; see To Amend the Statutes of the United States
as to Procedure in the Patent Office: Hearings on H.R.
7563 and H.R. 13487, 69th Cong. 5 (Dec. 1926) (explain-
ing the prior hearings) [hereinafter Procedure in the
Patent Office]. The quotes from the majority are taken
entirely from the February 1926 hearings on bills that
were not enacted into law insofar as they concerned
revisions to section 4915. 10 The Commissioner of Patents
objected to various provisions of the bill, and new bills
were drafted reflecting substantial changes, including the
creation of two alternative avenues for review—an appeal
to the Court of Appeals for the District of Columbia based
on the Patent Office record and the “bill in equity” proce-
dure that would receive the full Patent Office record but
allow supplementation. 11 Those February 1926 hearings
10 The only bill that was enacted (H.R. 6252) con-
cerned amendments to the jurisdictional rules in Section
52 of the judicial code and allowed parties in a 4915
action, if they resided in different districts, all to bring
suit in the Supreme Court of the District of Columbia.
Act of March 3, 1927 ch. 364, 44 Stat. 1394.
11 A.C. Paul, Chairman of the Legislation Committee
of the Patent Section of the American Bar Association
explained, “We had a hearing before the committee on
February 4, 1926. At that time some provisions of the bill
were objected to by the commissioner, and after a hearing,
as chairman of the legislation committee of the patent
section of the American Bar Association, I undertook to
see if we could get together and reconcile the views of the
HYATT v. KAPPOS 20
were unlikely to be considered by members of Congress
voting on a new and quite different bill in the subsequent
session.
New hearings were held in December 1926 on the bill
that ultimately became law (S. 4812 and H.R. 13487). In
those hearings, both proponents of section 4915 (from the
bar) and opponents (from the Patent Office) described the
motivation for the new legislation in identical terms.
While the bill in equity was characterized by some as a
“de novo” proceeding or as “starting all over,” 12 those
statements did not suggest that the Patent Office could be
bypassed in the presentation of evidence. Indeed, the
proponents viewed section 145 proceedings as involving
review of PTO decisions. A.C. Paul, the Chairman of the
legislation committee of the patent section of the Ameri-
can Bar Association viewed it as “practically another
appeal.” See, e.g., Procedure in the Patent Office, at 8.
Three features are significant. First, the statute, unlike
the existing provision, allowed the Patent Office record to
be received in section 4915 interference proceedings, and
the hearings noted the benefits of using the Patent Office
record in the bill of equity proceeding. For instance, Otto
Barnett explained that the bill “for the first time . . .
provided that in [the bill of equity proceeding] you may
use the testimony taken in the Patent Office” and that the
new law was preferable because “under the present law it
commissioner and the members of the committee, and we
had negotiations extending over a number of months.”
Procedure in the Patent Office, at 5.
12 Procedure in the Patent Office, at 11 (statement of
Hon. Thomas E. Robertson, Comm’r of Patents); Amend-
ing the Statutes of the United States as to Procedure in
the Patent Office: Hearings on S. 4812, 69th Cong. 10
(December 1926) (statement of Thomas E. Robertson,
Comm’r of Patents) [hereinafter Senate Hearings].
21 HYATT v. KAPPOS
is all lost, and you have to start a new record.” Senate
Hearings, at 13 (Statement of Otto R. Barnett).
Second, even more significantly, the purpose of the
bill was described as permitting the presentation of live
testimony in the bill in equity proceeding because it could
not be submitted before the Patent Office. 13 For example,
Edward S. Rogers explained,
There was a faction . . . who were in favor of doing
away with section 4915 [the predecessor of section
145] . . . . It was thought inadvisable to do so, be-
cause the court, in hearing cases, will see the wit-
nesses. The testimony in the Patent Office
hearings is all taken by deposition, and you cannot
take the bearing of a man in a deposition, and fre-
quently there are clashes in the testimony and
lapses of memory, if not actual perjury. So it
seems quite necessary to have the men who are to
testify put on the stand in court.
Senate Hearings, at 15 (statement of Edward S. Rogers)
(emphasis added). Similarly, Commissioner of Patents
Robertson noted,
My own preference would be to repeal entirely
section 4915 . . . but the bar unquestionably wants
that section 4915 to continue, because it does
13 The prevailing situation had been described in the
earlier hearing as follows: “[E]ach applicant [in interfer-
ence proceedings] is allowed to put in as much testimony
as he wishes, but they do not have the same cross-
examination privileges that they have in open court . . . .
In ex parte cases, there is no testimony except affidavits.”
To Amend Section 52, at 37 (statements of Alexander J.
Wedderburn, Patent Att’y & Karl Fenning, former Assis-
tant Comm’r of Patents).
HYATT v. KAPPOS 22
permit bringing the witnesses in open court which
we can not have under the present procedure in the
Patent Office and so we have all agreed . . . .
Procedure in the Patent Office, at 11 (statement of Thomas
E. Robertson, Comm’r of Patents) (emphasis added). 14
The purpose of the new legislation would be entirely
served by allowing in the trial court only evidence that
could not have been submitted to the Patent Office, such
as live testimony.
Third, there was no suggestion in the December 1926
hearings, as there was in the February 1926 hearing, that
applicants in the bill in equity could “bring[] in evidence
that they could have brought in before [the Patent Office]
but did not.” To Amend Section 52, at 81 (statement of
Thomas E. Robertson, Comm’r of Patents). That latter
statement was made by the Commissioner of Patents only
in February 1926 in his opposition to the bill. The omis-
sion of such statements in later hearings could well be
explained by the Commissioner’s receiving assurances in
negotiations over the bill that it did not go that far. In
any event, the earlier statement cannot be afforded any
weight. As the Supreme Court noted in Bryan v. United
States, 524 U.S. 184 (1998), "the fears and doubts of the
opposition are no authoritative guide to the construction
of legislation. In their zeal to defeat a bill, they under-
14 Commissioner Robertson also stated that “[t]he
judges who decide these cases have never seen the wit-
nesses [but if you] want a trial de novo under section 4915
you can force your opponent to come under section 4915 so
that the witnesses can be seen in court and have the
testimony decided by the judges who actually see the
witnesses as they testify.” Procedure in the Patent Office,
at 14 (statement of Thomas E. Robertson, Comm’r of
Patents) (emphasis added).
23 HYATT v. KAPPOS
standably tend to overstate its reach." 524 U.S. at 196(citations, brackets, and quotation marks omitted).
Far more pertinent than the committee hearings in
connection with the 1927 Act is the history of the 1952
codification. As I discuss below, at the time of the 1952
codification the courts had uniformly rejected a de novo
standard in interpreting section 4915. It is fair to assume
that Congress approved that interpretation in codifying
the section. Congress explicitly stated that codification of
section 145 made “no fundamental change in the various
appeals and other review of Patent Office action . . . .” S.
Rep. No. 82-1979 (1952), reprinted in 1952 U.S.C.C.A.N.
2394, 2400. The Supreme Court has recognized that the
“evaluation of congressional action . . . must take into
account its contemporary legal context,” Cannon v. Univ.
of Chi., 441 U.S. 677, 698–99 (1979), and that “Congress
is presumed to be aware of an administrative or judicial
interpretation of a statute and to adopt that interpreta-
tion when it re-enacts a statute without change,” Loril-
lard v. Pons, 434 U.S. 575, 580 (1978).
V
The earlier Supreme Court cases relied on by the ma-
jority do not suggest a different construction. None of the
cases cited by the majority held that any and all evidence
could be admitted without regard to whether it was
submitted to the Patent Office. Hoover Co. v. Coe, 325
U.S. 79 (1945), merely states that section 145 allows for
an action “on proof which may include evidence not pre-
sented in the Patent Office.” 325 U.S. at 83 (emphasis
added). Similarly, Gandy v. Marble, 122 U.S. 432 (1887),
merely noted that section 4915 was “not a technical
appeal from the patent-office, nor confined to the case as
made in the record of that office” and did not explicitly
HYATT v. KAPPOS 24
state there were no limits on the evidence introduced.
122 U.S. at 439.
The majority, however, places emphasis on language
in Butterworth v. Hoe, 112 U.S. 50 (1884), stating that in
an action under section 4915 of the Revised Statutes
(section 145’s predecessor):
Further provision, covering such and also all
other cases in which an application for a patent
has been refused, either by the commissioner of
patents or by the supreme court of the district, is
found in Revised Statutes, § 4915. It is thereby
provided that the applicant may have remedy by
bill in equity. This means a proceeding in a court
of the United States having original equity juris-
diction under the patent laws, according to the
ordinary course of equity practice and procedure.
It is not a technical appeal from the patent-office,
like that authorized in section 4911, confined to
the case as made in the record of that office, but is
prepared and heard upon all competent evidence
adduced, and upon the whole merits. Such has
been the uniform and correct practice in the cir-
cuit courts. Whipple v. Miner, 15 Fed. Rep. 117;
Ex parte Squire, 3 Ban. & A. 133; Butler v. Shaw,
21 Fed. Rep. 321.
Butterworth, 112 U.S. at 61 (emphasis added).
In fact, Butterworth is no help to the majority for sev-
eral reasons. First, Butterworth and the cases that it
cited were all interference cases. Pre-1927 decisions of
the Supreme Court and other courts in interference
proceedings concerning the ability and necessity of creat-
25 HYATT v. KAPPOS
ing a new record in bill in equity proceedings are of no
value in interpreting the 1927 legislation. That legisla-
tion worked a major change on interference proceedings.
The 1927 law explicitly provided that, for the first time,
the PTO record would be received in the bill in equity
interference proceedings and that “when admitted shall
have the same force and effect as if originally taken and
produced in the suit.” Act of March 2, 1927, ch. 273, § 11,
44 Stat. 1335, 1337 (1927). Previously in the bill in equity
proceedings, the Patent Office record, because of the
informal procedures followed in the Patent Office, was
viewed as having secondary value, and it was necessary to
create a new duplicate record in the trial court. 15 This
was recognized both in the hearings on the 1927 legisla-
tion (as noted above) and in subsequent court cases. As
the Third Circuit explained,
[T]he evidence given in the interference proceed-
ings could be introduced only as secondary evi-
dence, after proper foundation laid. The
competency of such evidence had to be determined
according to the principles of equity jurispru-
dence. In other words, the witnesses who had tes-
tified in the interference proceedings had to
testify anew in the suit in the district court. If
they did not so testify their absence had to be ac-
counted for in the usual way if the testimony
taken in the interference was to be received as
secondary evidence. The [1927] amendment was
passed to avoid this arduous and expensive means
of reproducing the evidence of the interference
proceedings in the suit.
15To be sure, in some cases the case did proceed
based on the PTO record. See, e.g., Morgan v. Daniels,
153 U.S. 120, 124 (1894).
HYATT v. KAPPOS 26
Gen. Talking Pictures Corp. v. Am. Tri-Ergon Corp., 96
F.2d 800, 812 (3d Cir. 1938) (citations omitted). Under
these circumstances, pre-1927 court cases naturally
referred to the creation of a new record in the bill in
equity proceedings. Under the 1927 legislation the crea-
tion of a new record in interferences became unnecessary.
The legislation provided that the Patent Office record
would be received and left it to the trial court to deter-
mine what additional cross examination and new testi-
mony could appropriately be received. 16
Second, Butterworth did not address the question
whether evidence was required to be submitted to the
Patent Office in the first instance if it was later to be used
in bill in equity proceedings. The sole issue decided in
16 Although sections 145 and 146 stem from the
same root, namely, R.S. § 4915, they are distinct because
they have different content and contain different proce-
dures for admitting evidence. In section 145 ex parte
proceedings, the Patent Office is a direct party to the
action whereas in section 146 interferences, the two
private parties to the interference are the parties in
interest. Section 146 explicitly addresses the optional
procedure for admitting the entire administrative record,
and such language is absent from section 145 because the
administrative record is automatically admitted in judi-
cial review proceedings. Thus, it is inaccurate to conflate
sections 145 and 146 with regard to admissibility. Section
145 could be construed as a “mongrel” cause of action in
the same sense that claim construction is “a mongrel
practice,” as Justice Souter noted in Markman v. West-
view Instruments, Inc., 517 U.S. 370, 378 (1996). Once
again, as in Zurko, the majority is attempting to develop a
distinction between patent administrative law and the
traditional administrative agency procedure. In doing so,
it fails to focus on the core of the matter, namely the
discretion of a district court regarding the admissibility of
evidence in a section 145 case.
27 HYATT v. KAPPOS
Butterworth was whether the Secretary of the Interior
could override the Patent Office decision approved by the
court in a proceeding under section 4915. 112 U.S. at 54,
62, 68–69. The language of Butterworth is at best am-
biguous. Like the other Supreme Court cases, it recog-
nizes that new evidence may be received and considered
in the trial court proceedings, id. at 61, but it says noth-
ing about whether that evidence had to be submitted to
the Patent Office in the first instance if such a submission
were possible.
The three cases cited in Butterworth are no more il-
luminating. Whipple simply held that the trial court
proceeding was an “original proceeding” and that the trial
court could generally not enjoin issuance of a patent
pending its outcome. 15 F. at 117–18. Butler held that
for interference cases the 4915 proceeding could be in-
voked without first appealing to the Supreme Court of the
District of Columbia, and noted that “the court may
receive new evidence and has the same powers as in other
cases in equity.” 21 F. at 326–27. Again, what new
evidence could be heard remained unclear. In the third
case the court rejected the contention that the court was
confined entirely to the record before the Patent Office,
holding that in addition to the Patent Office records “new
and additional testimony” could be received in the equity
proceedings. In re Squire, 22 F. Cas. at 1016. But again,
the court was considering only a proposed blanket bar on
new evidence; it did not consider whether the substance of
testimony could be withheld from the Patent Office in the
agency proceeding if the Patent Office could receive and
consider it. 17
17The language quoted by the majority is not in fact
from Squire itself but from the earlier case of Atkinson v.
Boardman quoted in Squire as part of the background
HYATT v. KAPPOS 28
Third, Butterworth’s reference to “the ordinary course
of equity practice and procedure” and “competent evi-
dence” suggests meaningful limits on the admissibility of
new evidence in section 4915 proceedings. See 112 U.S. at
61. As the Supreme Court explained in Morgan v.
Daniels, a bill in equity 18 in the context of section 4915
was
an application to the court to set aside the action of
one of the executive departments of the govern-
ment. The one charged with the administration of
the patent system had finished its investigations
and made its determination with respect to the
question of priority of invention. That determina-
tion gave to the defendant the exclusive rights of a
patentee. A new proceeding is instituted in the
courts—a proceeding to set aside the conclusions
reached by the administrative department, and to
give to the plaintiff the rights there awarded to
the defendant. It is something in the nature of a
description. See Atkinson v. Boardman, 2 F. Cas. 97(C.C.N.Y. 1851).
18 A “bill in equity,” also termed a “bill of complaint,”
was the initial pleading that invoked the jurisdiction of
the courts of equity. See Federal Equity Rule 25 (1913).
Equity courts recognized various species of bills, depend-
ing on the nature of the relief sought. The “bill of review”
was a type of bill in equity seeking a reversal or modifica-
tion of a prior decree or judgment. See, e.g., Kingsbury v.
Buckner, 134 U.S. 650, 671–72 (1890); Thompson v.
Maxwell, 95 U.S. 391, 395–96 (1877) (“It is manifest that
the object of this bill, especially after being amended, was
to set aside the decree made in the original cause, and to
substitute therefor a new decree supposed to be more
advantageous to the complainants, upon the same mat-
ters which were before the court and under its considera-
tion in the said cause. Under the guise of a bill for
quieting title it was in reality a bill of review.”).
29 HYATT v. KAPPOS
suit to set aside a judgment, and, as such, is not to
be sustained by a mere preponderance of evidence.
153 U.S. 120, 124 (1894) (emphases added); see also
Fregeau v. Mossinghoff, 776 F.2d 1034, 1037 (Fed. Cir.
1985) (applying Morgan to section 145 and noting that
“an action under § 145 is . . . in essence a suit to set aside
the final decision of the board, like the bill in equity from
which it was derived”). Under settled principles of federal
equity practice, a court presented with a bill to set aside a
prior judgment would not rehear arguments or evidence
that had been adjudicated in the prior proceeding, nor
would it consider evidence that could have been produced
during that proceeding in the exercise of reasonable
diligence. Rather, the court would limit its review to (1)
legal errors apparent on the face of the decree and (2) new
evidence of such compelling character as to call into doubt
the outcome of the prior proceeding. See, e.g., Beard v.
Burts, 95 U.S. 434, 436 (1877); Scotten v. Littlefield, 235
U.S. 407, 411 (1914).
In Beard, the Court explained:
To sustain a bill of review, there must be errors of
law apparent on the face of the decree, or some
new matters of fact material in themselves, and
discovered after the rendition of the decree. This is
the general rule in equity . . . . The facts are not
open for a re-trial, unless the bill asserts that new
evidence has been discovered, not obtainable be-
fore the first trial by the exercise of reasonable
diligence.
HYATT v. KAPPOS 30
Beard, 95 U.S. at 436 (emphasis added). 19 Thus, federal
courts in equity rejected attempts to litigate, through a
bill of review, factual questions that could have been
raised in the prior proceeding. See id. at 436; Purcell, 71
U.S. (4 Wall.) at 521 (rejecting petitioner’s bill in equity
because the complainant “offers no new evidence, but
what he might as well have produced before”). These
basic principles of equity practice would have been famil-
iar to Congress in 1836, when it first authorized a “rem-
edy by bill in equity” for applicants aggrieved by the final
determination of the Commissioner of Patents. See Act of
July 4, 1836, ch. 357, § 17, 5 Stat. 117, 124. Thus, the
ordinary rules of equity practice tolerated nothing like the
de novo relitigation that the majority adopts.
Finally, and most significantly, none of the cases sub-
sequent to Butterworth has interpreted it, or the cases
that it cited, to require de novo review under the 1927
legislation. The Supreme Court has never directly ad-
dressed the de novo review issue. The only Supreme
Court case to address the scope of section 145 after pas-
sage of the 1927 Act, Dickinson v. Zurko, 527 U.S. 150(1990), does not address the issue of the scope of section
145 with regard to new evidence. Zurko involved the
19 See also Scotten, 235 U.S. at 411 (explaining that
a bill of review encompassed only manifest legal errors
and “new facts discovered since the decree, which should
materially affect the decree and probably induce a differ-
ent result”); Purcell v. Miner, 71 U.S. (4 Wall.) 519, 521
(1866) (“By Lord Chancellor Bacon's rules, it was de-
clared: ‘No bill of review shall be admitted except it con-
tain either error in law appearing in the body of the
decree without further examination of matters in fact, or
some new matter which hath arisen in time after the
decree; and not on any new proof which might have been
used when the decree was made.”); Whiting v. Bank of
United States, 38 U.S. (13. Pet.) 6, 13–14 (1839).
31 HYATT v. KAPPOS
question of what was the proper standard of review on
direct appeal to the Federal Circuit under 35 U.S.C. §
141. Id. at 152–53. Although the Supreme Court noted
that a section 145 claimant can "present to the court
evidence that the applicant did not present to the PTO,"
the Court said nothing about when or under what circum-
stances such evidence could be introduced. See id. at 164.
The decision in Zurko in fact undermines the majority’s
holding both by recognizing the importance of applying
traditional administrative law principles to the PTO and
in recognizing that the “PTO is an expert body” that “can
better deal with the technically complex subject matter” of
patent applications than the federal courts. Id. at 160.
As will be seen in the next section, Butterworth has never
been seen by other courts of appeals as barring limita-
tions on new evidence that could have been presented to
the Patent Office under the 1927 Act.
VI.
The majority opinion is, in fact, contrary to decades of
circuit authority under the 1927 legislation, after Butter-
worth, recognizing limits on the admissibility of new
evidence in section 145 and section 146 proceedings. One
of the more influential cases on the admissibility of evi-
dence is Barrett Co. v. Koppers Co., 22 F.2d 395 (3d Cir.
1927), decided several months after the passage of the
1927 legislation. There, during interference proceedings
in the Patent Office, the Barrett Company instructed its
employees not to answer questions about certain of its
"commercial practices." Id. at 396. The Barrett Company
lost the interference, and then filed a bill in equity under
Revised Statutes § 4915 and sought to introduce before
the district court the exact testimony it had instructed its
employees not to provide during the interference. Id. The
Third Circuit found that the district court properly ex-
cluded this evidence, saying:
HYATT v. KAPPOS 32
The law gave the plaintiffs a day in court on the
issue of priority. That was the day the interfer-
ence was heard and if they chose not to avail
themselves of their full rights but to gamble on
the decision by giving only a part, and the weaker
part, of the evidence they had in hand, they did it
at their own risk. After losing on such evidence in
what otherwise would be a train of futile appeals
in the patent tribunals and Court of Appeals of
the District of Columbia they cannot come into a
District Court and say, now for the first time we
shall tell the true story of reduction to practice
and demand a patent.
. . . When, as in this case, a party has refused to
produce evidence for consideration by the Court of
Appeals of the District of Columbia and then in
the statutory action under section 4915, R.S., pro-
duces that very evidence to overcome the effect of
that court's decision, he comes very close to trifling
with the courts’ processes. If in this case the Court
of Appeals of the District of Columbia was wrong
it was because the plaintiffs purposely kept it in
the dark. If now this court were in effect to re-
verse the decision of that court on evidence
brought to light for the first time, we should be
assisting the plaintiffs to profit by their own tech-
nical wrong doing.
. . . Particularly are we anxious that no one should
think that we hold that any evidence not before
the Court of Appeals of the District of Columbia is
inadmissible in an action under section 4915, R.S.
Such a notion would destroy the action given by
section 4915, R.S. and throw overboard the whole
doctrine of Morgan v. Daniels. Specifically our de-
cision is that the plaintiffs in this action under
33 HYATT v. KAPPOS
section 4915, R.S., are estopped to offer evidence
which was wholly within their possession and con-
trol at the interference proceeding and which they
withheld from that proceeding and, therefore,
withheld from the other patent tribunals and the
Court of Appeals of the District of Columbia, and
thereby made it impossible for those tribunals and
that court to render what they, the plaintiffs, now
maintain is the right decision.
Id. at 397 (formatting altered; emphasis added).
Subsequent to Barrett, three circuits—the District of
Columbia, the Seventh, and the Eighth—have essentially
followed the Barrett rule. The District of Columbia Cir-
cuit in Cal. Research Corp. v. Ladd, 356 F.2d 813 (D.C.
Cir. 1966), adopted a negligence standard to limit the
introduction of new evidence in a section 145 proceeding
and explained that a section 145 action “may not be
conducted in disregard of the general policy of encourag-
ing full disclosure to administrative tribunals.” Id. at
821. The Seventh Circuit adopted a “reasonably diligent”
standard for determining whether evidence is admissible
in a section 146 interference proceeding. In Velsicol
Chem. Corp. v. Monsanto Co., 579 F.2d 1038 (7th Cir.
1978), it held “that absent special circumstances, the
proper question for the district court was whether the
failure of the proponent of the additional evidence to
uncover its existence earlier or to procure it for the inter-
ference proceeding occurred in spite of the proponent's
diligence in preparing his case before the Board.” Id. at
1046. The court cited the “policy of encouraging full
disclosure” to the administrative tribunal as the reason
for this limitation. Id.; see also Globe-Union v. Chi. Tel.
Supply Co., 103 F.2d 722, 728 (7th Cir. 1939) (“We do not
HYATT v. KAPPOS 34
dispute the soundness of the proposition that all pertinent
evidence, actually available, should be submitted in the
first instance. To permit partial presentation before the
Patent Office is to sanction the destruction of administra-
tive justice.” (emphasis added)).
The Eighth Circuit adopted the rule that “deliberate,
intentional, or willful withholding or suppression of
pertinent and available evidence from the Patent Office,
whether attended by reprehensible motives or not,
whether it be for tactical or other reasons, justifies exclu-
sion of such evidence in a section 146 proceeding.” Kir-
schke v. Lamar, 426 F.2d 870, 874 (8th Cir. 1970). The
court reasoned that a section 146 proceeding was not a
“full trial de novo; rather, allowance of evidence in addi-
tion to the Patent Office record must be tempered and
circumscribed to some degree to effectuate the policy
favoring full disclosure to administrative tribunals.” Id.Although subsequent to Barrett the Third and Second
Circuits limited the exclusion to testimony intentionally
suppressed, their holdings too are inconsistent with the
majority’s approach here. The Third Circuit continued to
hold that intentionally suppressed evidence must be
excluded. 20 The Second Circuit, which originally ap-
20 See Minn. Mining & Mfg. Co. v. Carborun-
dum, 155 F.2d 746, 748 (3d Cir. 1946) (distinguishing
Barrett and allowing expert testimony that was not
intentionally suppressed at the time of the Patent Office
proceedings). Although another later Third Circuit case,
Standard Oil Co. v. Montedison, S.P.A., 664 F.2d 356, 376
(3d Cir. 1981), stated that “new expert testimony is
clearly admissible in a section 146 proceeding without
[showing special circumstances explaining why the testi-
mony was not presented first to the Board] to the extent
that it aids the court in understanding issues presented to
the Board,” the court was apparently responding to an
35 HYATT v. KAPPOS
proved of Barrett, see Greene v. Beidler, 58 F.2d 207, 208–
09 (2d Cir. 1932), later suggested an exclusion might be
limited to evidence “suppressed,” not “merely neglected
through the plaintiff’s slackness in preparation,” Dowling
v. Jones, 67 F.2d 537, 538 (2d Cir. 1933).
Not a single court of appeals case has interpreted sec-
tion 145 as permitting the submission of any and all new
evidence. Although the cases suggest varying standards
for the admission of new evidence, they all acknowledge
the necessity of establishing significant limitations on the
admission of new evidence, and recognize that to provide
otherwise would undermine the requirement of adminis-
trative exhaustion. Today’s decision represents an
anomalous and unjustified departure from prevailing
circuit authority.
VII
The majority suggests that one should not be too con-
cerned about its special rule for patent cases because
general evidentiary principles will somehow allow the
district court to discount evidence not submitted to the
PTO and thus reach the same result at least in some
cases. See Maj. op. at 30–31. This approach is remarka-
bly similar to the argument rejected in Zurko where it
was suggested that there was no meaningful difference
between the APA substantial evidence standard and the
clearly erroneous standard for review of PTO decisions.
The Supreme Court concluded that while the differences
were “subtle” and might not affect many cases, the differ-
ences were nonetheless important. Zurko, 527 U.S. at161–65. Even if here the majority were right as to the
consequences, this would not support application of the
wrong law, as Zurko makes clear.
attempt by the objecting party to place the burden of
justifying the evidence on the party offering it.
HYATT v. KAPPOS 36
But the majority is not right as to the consequences,
and there is nothing subtle about the difference between
excluding evidence and admitting it. The evidentiary
cases cited by the majority offer no support for discount-
ing evidence not submitted to the PTO on grounds that it
would be too costly to do so, and the majority offers appli-
cants a ready made excuse––the costs of making a full
record before the PTO–– for the withholding of evidence
under such circumstances. 21 The rules of evidence do not
remotely offer a different path to the same result.
In conclusion, I note the quite arresting policy argu-
ment made by the majority for permitting applicants to
bypass the PTO––that the applicant would bypass the
PTO in favor of a de novo district court proceeding only in
cases where the patent is commercially significant and
the costs of a separate proceeding can be justified. See
Maj. op. at 30–31. But those are exactly the cases in
which PTO review is most important. In such cases,
contrary to the majority, it is not somehow fantastic to
imagine that applicants will elect to bypass the PTO in
21 The majority suggests that two cases from the
turn of the last century recognize that “courts have con-
sidered an applicant’s failure to introduce evidence before
the Patent Office in determining what weight to afford to
the evidence.” Maj. op. at 30. The limited holdings of
these cases impose no meaningful limits. The first simply
recognizes that a witness’ new explanation, not offered in
his Patent Office declaration, was not credible. W. Elec.
Co. v. Fowler, 177 F. 224, 228–29 (7th Cir. 1910). The
second recognizes that prior consistent declarations of a
witness in the PTO proceeding, only introduced in district
court after the witness had died, would be given little
weight in evaluating the witness’ earlier testimony.
Standard Cartridge Co. v. Peters Cartridge Co., 77 F. 630,
638 (6th Cir. 1896). These cases impose no limit on new
evidence presented by new witnesses whose declarations
were not supplied to the PTO.
37 HYATT v. KAPPOS
favor of a second bite at the apple in the district court.
They will do so exactly in those circumstances where an
expert agency would reject the evidence but a non-expert
district court might be convinced to accept it. A more
pernicious approach is difficult to imagine.