Fed. Cir. Limits Admissibility of Evidence Withheld During Examination at the PTO

Hyatt v. Acting Director, Patent and Trademark Office, No. 07-1066, August 11, 2009

Hyatt appealed a decision from the District Court for the District of Columbia that upheld the PTO's rejection of Hyatt's patent as not being supported by adequate written description. Hyatt's application was originally filed with a 238-page specification, 40 pages of drawings and 15 claims. The original 15 claims were subsequently cancelled, and 117 new claims were added.

The examiner objected to the amendments claiming that no support was provided in the specification, and further rejected the claims, among other things, for lack of adequate written description. For some of the rejected features, the examiner specified the deficiencies; for most other features, the examiner simply stated that they were "not enabled" or "not described in the specification."

Ultimately, the issue went up to appeal, where Hyatt presented 36 pages of general argument that the rejections should be reversed. However, Hyatt did not separately address—and did not indicate where in the specification support could be found for—any of the claim limitations the examiner determined lacked support. Hyatt also argued that lists of twenty-nine publications had been incorporated by reference into the specification and provided enabling disclosure. Hyatt did not correlate any of this information with particular limitations.

The BPAI sided with the examiner on most of the rejection. When Hyatt filed a request for rehearing, he provided extensive new arguments and citations purportedly detailing where disputed limitations derived written description support. The Board denied his request, holding that the new arguments "could and should have been presented during the original appeal briefing."

Hyatt filed a district court action pursuant to 35 U.S.C. § 145 against the Director, but the district court found Hyatt had been "negligent" in failing to submit the arguments to the PTO during examination or in a timely manner to the Board on appeal.

On appeal to the Federal Circuit, the court noted that "this court has never squarely addressed the issue of exactly what standard governs district courts in ruling on the admissibility of evidence withheld during examination in the PTO." According to Hyatt, plaintiffs in a § 145 action are entitled to submit additional evidence without limitation. The PTO argued that evidence not submitted to the PTO through the negligence, or at least the gross negligence, of the applicant is properly excluded.

After a painstaking review (35+ pages) of the legislative and judicial history of § 145, the court concluded:

[I]t has been the general practice of federal courts for over eighty years in certain circumstances to exclude evidence which a party could and should have introduced before the Patent Office but did not despite an obligation to do so. Our own cases likewise have not adopted a de novo standard for trial. We have said that "[c]learly, the applicant does not start over to prosecute his application before the district court unfettered by what happened in the PTO." . . . On the other hand, 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).

* * *

In light of the hybrid nature of § 145 actions, we have held that in the absence of new evidence, a district court must review the decision of the Board for substantial evidence, but for factual questions where new evidence is before the district court, the district court makes de novo findings. . . . However, admitting new evidence without restriction would defeat the purpose of the APA, as applicants could then always submit new evidence whenever they desired de novo review; allowing new evidence unnecessarily will convert deferential review "into effectively de novo review."

There is long history of excluding evidence not submitted to the PTO, and of a consensus that evidence may be excluded if it was not submitted to the PTO at least due to fraud, gross negligence, bad faith, or intentional suppression . . . The Director argues in favor of a negligence standard, although he also argues that Hyatt's conduct amounts to gross negligence.

[W]e note, however, that the terminology of negligence (and gross negligence) is somewhat inapposite to the issue of admissibility. Negligence (which is roughly the absence of diligence) implies a duty. While patent applicants do have certain duties to the PTO, including duties of disclosure, beyond a certain point, how much more evidence to submit is in large part a determination for which a patentee and his agents must use good judgment. While there are certainly many factors which could go into such a decision, a duty to the PTO may not necessarily be one of them. We believe a semantic shift away from negligence will help focus attention on the factors that are pertinent to whether an applicant should be allowed to introduce evidence before the district court over an objection by the Director.

Hyatt was obligated to respond to the examiner's written description rejection . . . by explaining where in the specification support for each of these limitations could be found . . . Hyatt could have declared where in his specification the written description support for each of the disputed limitations resided. After the examiner stated that he had read through the specification and could find no support for certain claim limitations, all Hyatt needed to do was show the examiner where in the specification support existed—something that should have been simple for him, the person most familiar with the specification. The Board noted, "It is far easier for appellant to describe where the limitation he wrote is disclosed than for the Office to prove that the limitation is not disclosed."

On these facts, the district court's exclusion of Hyatt's new evidence must be affirmed. The district court found that Hyatt was "negligent" in failing to submit the evidence disclosed in the Hyatt declaration to the PTO because he was obligated to do so, he had a fair opportunity to do so, and he failed to give an adequate explanation for his failure to submit it. . . . However, 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. Such a refusal to provide evidence which one possessed was grounds in Barrett to exclude the withheld evidence.

AFFIRMED

Judge Moore, DISSENTING:

"The majority takes away this patent applicant’s fundamental right to a "civil action to obtain [a] patent" as granted by Congress in 35 U.S.C. § 145. Today the majority decides that a patent applicant may not introduce the inventor’s declaration in a § 145 proceeding before the district court because the inventor had an "affirmative duty" or "obligation" to disclose this evidence to the PTO. His failure to fulfill his affirmative duty, by not disclosing evidence he could have disclosed to the PTO, results in such evidence being excluded from the district court § 145 proceeding. The district court made no fact findings indicating willful withholding or intentional suppression; in fact, the district court did not even conclude that Mr. Hyatt’s conduct amounted to gross negligence, but rather excluded the evidence under a negligence "could have" standard. Nor did the PTO even argue, at any stage of these proceedings, that Mr. Hyatt’s conduct in this case was willful or intentional. Nonetheless, the majority concludes that the applicant "owed," the PTO all evidence he possesses that is responsive to a rejection and that failure to fulfill this newly created "affirmative duty" amounts to willful withholding as a matter of law. There are only two possible ways to interpret the majority’s willful withholding determination. Either the majority is engaging in appellate fact finding or it is determining that breach of its newly created affirmative duty is willful withholding as a matter of law."