Lost Before the Patent Office? Get New Evidence in Front of the District Court

July 11, 2014

Hunter Keeton

What This Means to You

  • If you are dissatisfied with the outcome of a prosecution, interference, or derivation proceeding before the PTO, you can introduce new evidence in a proceeding before a district court.
  • This takes longer than a direct appeal from the PTO to the Federal Circuit, but is the only option if you genuinely could not get the necessary evidence in front of the PTO.

Overview

In Stephen P. Troy, Jr. v. Samson Manufacturing Corp., the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) confirmed that when a party is dissatisfied with the outcome of an interference or derivation proceeding before the U.S. Patent and Trademark Office (PTO), it can file an action in district court, and submit new evidence and arguments that were not before the PTO. The Federal Circuit extended prior cases allowing a patent applicant dissatisfied with the outcome of patent prosecution to submit new evidence and arguments in such a proceeding.

Case Background

Troy and Samson worked together on a modular firearm hand-guard, but had a falling out over who invented what. They both filed patent applications, which led to the PTO declaring an interference. Samson claimed priority to a slightly earlier provisional application than Troy. The PTO found that, based on the evidence before it, Troy had failed to prove that he had conceived of his invention or put it into practice in February 2004. The PTO thus invalidated Troy’s patent.

Instead of appealing to the Federal Circuit, Troy started a new action in the District of Massachusetts under 35 U.S.C. § 146. As part of that action, he submitted new evidence that he had put his invention into practice in July 2004, relying on a third-party affidavit and deposition evidence that was not before the PTO. Troy also cited an intervening state court proceeding finding that Samson had misappropriated his trade secrets.

The district court found that Samson won again. It also refused to consider any of Troy’s new evidence, since it had not been raised before the PTO. Troy appealed.

Decision Analysis

The Federal Circuit held that the district court should have considered Troy’s new evidence. Relying on a 2012 U.S. Supreme Court decision (Hyatt) allowing parties to submit new evidence and arguments in front of a district court under 35 U.S.C. § 145, the Federal Circuit found that the same logic allows the submission of new evidence and arguments under Section 146. In fact, the language of Section 146 is even stronger in allowing the submission of new evidence. The Federal Circuit remanded the case to the District of Massachusetts to consider Troy’s evidence that he conceived the invention in February 2004 and put it into practice in July 2004.

Takeaways

If you do not like the outcome before the PTO in a prosecution, interference, or derivation proceeding, you have the option of starting a new action in district court. Doing so gives you the opportunity to add to the record with new evidence and arguments you did not or could not present to the PTO.

That said, parties usually want to win before the PTO. They will try to present their best evidence, and directly appealing from the PTO’s Board decision to the Federal Circuit is the fastest way to reach final resolution, as compared to starting a new proceeding in front of a district court. Starting such district court actions generally makes sense when you just were not able to get the right evidence in front of the Board, either due to late discovery or the nature of the evidence.

This case is also an unusual instance of the Federal Circuit finding that the Supreme Court had overruled the Federal Circuit’s precedent by implication. While the Supreme Court’s 2012 Hyatt decision only addressed district court actions under Section 145, the Federal Circuit found that the logic also applies to actions under Section 146. To the extent that earlier Federal Circuit decisions said new evidence or arguments should be excluded from the district court action if they had not been raised before the Patent Office, Hyatt overrules them.