District Court May Consider New Evidence in Section 146 Proceeding: Federal Circuit | Practical Law

District Court May Consider New Evidence in Section 146 Proceeding: Federal Circuit | Practical Law

In Troy v. Samson Manufacturing Corp., the US Court of Appeals for the Federal Circuit held that the US Supreme Court's Kappos v. Hyatt decision extends to district court Section 146 proceedings and that the district court erred by refusing to consider new evidence that had a junior party had not previously raised in an underlying interference proceeding before the Board of Patent Appeals and Interferences (BPAI).

District Court May Consider New Evidence in Section 146 Proceeding: Federal Circuit

Practical Law Legal Update 9-574-4406 (Approx. 4 pages)

District Court May Consider New Evidence in Section 146 Proceeding: Federal Circuit

by Practical Law Intellectual Property & Technology
Published on 14 Jul 2014 • USA (National/Federal)
In Troy v. Samson Manufacturing Corp., the US Court of Appeals for the Federal Circuit held that the US Supreme Court's Kappos v. Hyatt decision extends to district court Section 146 proceedings and that the district court erred by refusing to consider new evidence that had a junior party had not previously raised in an underlying interference proceeding before the Board of Patent Appeals and Interferences (BPAI).
On July 11, 2014, in Troy v. Samson Manufacturing Corp., the US Court of Appeals for the Federal Circuit vacated the US District Court for the District of Massachusetts's ruling in a 35 U.S.C. § 146 case in which the district court refused to hear new priority evidence and therefore affirmed the Board of Patent Appeals and Interferences' (BPAI) cancellation of all of the junior party's patent claims in a prior interference proceeding (now called a derivation proceeding under the Leahy-Smith America Invents Act (AIA)) (No. 2013-1565, (Fed. Cir. Jul. 11, 2014)).
Before the AIA's enactment, the BPAI (now the Patent Trial and Appeal Board (PTAB)) declared an interference between Troy's US Patent No. 7,216,451 ('451 patent) and a patent application owned by Samson Manufacturing Corp. (Samson). The BPAI named Troy the junior party in the interference and Troy filed a priority motion asserting earlier conception and reduction to practice. The BPAI rejected Troy's priority claims and cancelled all of the '451 patent's claims.
Troy challenged the BPAI's decision in the District of Massachusetts under 35 U.S.C. §146, which permitted a losing party to challenge the BPAI's priority determination in district court. In the district court case, Troy introduced new evidence and arguments that he had not presented to the BPAI in the interference, including evidence of:
  • Prior conception and reduction to practice supported by declarations and deposition testimony.
  • A state court action in which Troy had proven that Samson submitted one of Troy's drawings to the US Patent and Trademark Office (USPTO) and violated its confidentiality agreement with Troy, which the district court conceded may have shown inequitable conduct by Samson.
The district court refused Troy's new evidence and arguments, however, and affirmed the BPAI's decision to cancel all of his patent's claims.
The Federal Circuit vacated and remanded to the district court with instructions to consider Troy's new evidence and arguments. The Federal Circuit held that:
  • The US Supreme Court's decision of Kappos v. Hyatt (Hyatt), in which it held that there is no limit on the admissibility of evidence in a 35 U.S.C. § 145 proceeding challenging the BPAI's denial of a patent, except those limits in the Federal Rules of Evidence and Federal Rules of Civil Procedure, also applies to Section 146 proceedings (132 S.Ct. 1690 (2012)).
  • The district court erred by refusing to consider Troy's new evidence of priority and inequitable conduct that had not been before the BPAI.
In reaching its holding, the Federal Circuit:
  • Rejected the USPTO's amicus argument that the Supreme Court's Hyatt affirmance was limited to address raising new evidence, but not entirely new issues, not presented to the BPAI.
  • Made clear that to the extent that any of its earlier precedent held that district courts must generally reject new evidence not previously presented to the BPAI, that precedent was overruled by the Supreme Court's Hyatt decision.
  • Explained that there is no reason to distinguish the types of evidence admissible in Section 145 and 146 proceedings.
This decision should resolve ambiguity concerning admissibility in a Section 146 proceeding of evidence and arguments not raised with the BPAI in an underlying interference or derivation proceeding.