Troy v. Samson Mfg. Corp.

Addressing the scope of permissible new issues and evidence admissible in 35 U.S.C. § 146 district court proceedings, the U.S. Court of Appeals for the Federal Circuit vacated and remanded a lower court’s conclusion that the U.S. Patent and Trademark Office’s (PTO’s) Board of Patent Appeals and Interferences (Board) properly cancelled claims, finding that Kappos v. Hyatt (IP Update, Vol. 15, No. 4) permits new evidence to be admitted without regard to whether the issue was raised before the Board.  Troy v. Samson Mfg. Corp., Case No. 13-1565 (Fed. Cir., July 11, 2014) (Moore, J.).

The dispute began when the Board declared an interference between Stephen P. Troy Jr.’s patent and Samson’s patent application.  Mr. Troy submitted a priority motion, which included inurement and derivation theories.  He also argued that he reduced his invention to practice in February 2004.  The Board concluded that he failed to prove actual reduction to practice and that Troy failed to prove derivation and inurement because he did not show prior conception.  The Board entered judgment against Troy, cancelling the claims of his patent.

Pursuant to § 146, Troy challenged the Board’s decision in district court.  He offered new evidence of conception, new evidence of reduction to practice in February 2004 and new evidence of reduction to practice in July 2004.  Troy also introduced evidence that a state court found Samson to have misappropriated Troy’s technical drawings.

The district court affirmed the Board’s decision.  In doing so, the district court excluded Troy’s evidence related to new issues.  The district court noted that parties are generally barred from raising issues in a § 146 proceeding that were not raised before the Board.  Accordingly, the court did not consider the July 2004 reduction to practice evidence or the misappropriation evidence.  Troy appealed.

The Federal Circuit vacated the district court’s evidentiary ruling based largely on the Supreme Court’s Kappos v. Hyatt decision.  There, the Supreme Court held that a party may introduce new evidence in a § 145 district court proceeding, subject only to the rules of civil procedure and evidence.  The Supreme Court rejected the argument that administrative law should govern the admissibility of evidence in federal court.  Applying this holding and reasoning to a § 146 proceeding, the Court concluded that a § 146 proceeding participant may also introduce new evidence and issues.  The Court overturned its prior precedent to the extent it held to the contrary.