Federal Circuit Restores Evidentiary Sense to Challenges of BPAI Decisions in Hyatt v. Kappos

In what should be good news for patent applicants, an en banc Federal Circuit has reversed course and will now allow introduction of new evidence in district court actions that follow final decisions in the patent examination process.  The ruling in Hyatt v. Kappos expands the post-appeal ability of patent applicants to challenge denials of rights at the United States Patent & Trademark Office (“USPTO”).

Those who track patent applications as they wind their way through examination at the USPTO have no doubt noticed the growing importance of, and reliance upon, decisions of the Board of Appeals and Interferences (“BPAI”).  More and more applicants resort to administrative appeals inside the USPTO for a determination of whether patent rights will be granted. United States law permits a patent applicant to challenge the BPAI’s decisions after exhausting all administrative avenues at the USPTO.

Two options are available for applicants wishing to challenge BPAI decisions. Patent applicants may choose to either appeal BPAI decisions directly to the Federal Circuit, or to proceed to a district court first under 35 U.S.C. § 145. Until now however, patent applicants in such post-BPAI § 145 actions have been restricted from introducing new evidence that had not been presented before the BPAI or during examination.

In the case itself, prolific inventor Gilbert Hyatt exhausted the BPAI process and brought a § 145 action to challenge the rejection of certain claims in U.S. Patent Application No. 08/471,702. The district court in that case refused to allow Hyatt to introduce new evidence in the form of a declaration that had not been presented to the BPAI. Hyatt’s declaration was related to issues that both the examiner and BPAI had considered. The district court reasoned that Hyatt could have presented the declaration earlier, ether before the examiner or the BPAI, and found that Hyatt had no explanation for why he previously failed to do so. The court excluded the evidence based on Hyatt’s negligence.

The Federal Circuit initially upheld the lower court’s decision. After an en banc rehearing, the full Federal Circuit reversed, saying that new evidence could indeed be presented, even if it had been available to the applicant at the USPTO level. The en banc panel held “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.” Therefore, the district court’s refusal to allow introduction of Hyatt’s new evidence was improper.

All new evidence in district court § 145 actions will be reviewed de novo. Despite this, the Federal Circuit noted that deference would be given to evidence that the USPTO did indeed consider. As with evidence generally, other procedural rules may limit the admissibility of such new evidence, and the court noted that the Administrative Procedure Act also imposed restrictions on the admission of new evidence in a § 145 action.

The ruling provides hope for further challenge of BPAI decisions where new evidence may help determine whether claims are indeed patentable, and therefore whether powerful rights should be granted. While the ruling’s applicability is limited to § 145 actions, it does represent an improvement to the post-BPAI options available. And, it continues what appears to be a growing trend towards pro-patentee behavior at both the USPTO and in the courts. Which should be welcome news indeed to patent holders and patent applicants alike.