USPTO Decision to Disclose Unpublished Patent Application is Judicially Reviewable

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Federal Circuit Review – Issue No. 65-03
PTO’s Determination of “Special Circumstances” to Justify Disclosure of Confidential Information in Unpublished Applications Under Section 122(a) is Judicially Reviewable

Hyatt v. Lee, No. 2014-1596, 2015 U.S. App. LEXIS 14611 (Fed. Cir. Aug. 20, 2015) )(Before Moore, Mayer, and Linn, J.) (Opinion for the court, Moore, J.). Click Here for a copy of the opinion.

Hyatt owns at least 75 issued patents and nearly 400 pending patent applications, all of which were filed on or before June 8, 1995, the effective date of the Uruguay Round Agreements Act. In other words, any patents issued from the pending applications will have a term of seventeen years from the date of issuance. Hyatt’s pending applications consisted of about 12 distinct families. Each application, on average, contained approximately 300 claims. The applications also claimed priority back to a network of earlier-filed applications dating back to the 1970s.

During examination, the PTO issued formal Office Actions called Requirements. Each Requirement addressed one family, and a copy of the Requirement was made a part of the prosecution history of each application within that family. Each Requirement imposed certain obligations on Applicants (e.g., select the number of claims, identify the earliest applicable priority date, etc.) and also contained information about other applications in the family to help explain the PTO’s decision. Because these applications were filed before November 9, 2000, the 18-month publication provision (35 U.S.C. § 122(b)(1)(A)) was not applicable here. Therefore, an application’s prosecution history would remain confidential until the application issues as a patent or an issued patent claims priority from the application.

Hyatt petitioned the PTO to expunge confidential information of unpublished applications in the Requirements. Hyatt relied on 35 U.S.C. § 122(a), which provides that:

Applications for patents shall be kept in confidence by the [PTO] and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of an Act of Congress or in such special circumstances as may be determined by the Director.

The PTO denied Hyatt’s petition, declaring that the confidential information disclosed in the Requirements was necessary for examination of the applications. In addition, the Office also determined that “the circumstances surrounding these applications including the number of related applications filed, the number of claims filed, and the number of applications to which benefit of priority is claimed, qualify as ‘special circumstances’ under section 122.”

Hyatt subsequently filed claims in the district court against the PTO and its Director under the Administrative Procedure Act (“APA”), alleging violation of 122(a). The court dismissed Hyatt’s complaint for lack of subject matter jurisdiction under 5 U.S.C. 701(a)(2). In the alternative, the court held that §122 did not prohibit disclosure of the Requirements, such that the PTO would be entitled to summary judgment. Hyatt appealed.

The Federal Circuit held that the structure and language of §122(a) “indicate that Congress intended the exceptions to confidentiality to be narrow and reviewable.” §122(a) contains two portions: a mandatory clause follows by two exceptions. The word “shall” in the first portion of the provision made it mandatory for the PTO to maintain the confidentiality of patent applications. In addition, the word “necessary” in the first exception indicated a narrow exception and afforded the agency no discretion. In light of this, coupled with the language of the second exception, the Court concluded that the PTO’s determination of “special circumstances” in the second exception is reviewable.

The Court distinguished §122 from other statutory provisions that do not permit judicial review, particularly those involving national security. According to the Court, “Congress often grants an agency acting in the interest of national security more discretion, so that decision-makers at the agency are able to act in ways that will best protect the safety of the public.” No such national security interest was at issue here, which supported the Court’s reviewability conclusion. The Court also rejected the PTO’s argument that §122(a) is not reviewable because “it contains no meaningful standard” for review. According to the Court, the language of §122(a) provided one concrete, reviewable requirement: “the Director must determine that there are ‘special circumstances.’”

With respect to the scope of review, the Court disagreed with both parties’ positions and adopted its own, requiring that “[t]he PTO must not only determine that special circumstances exist, but also that the special circumstances justify the specific content to be disclosed.” In other words, the information disclosed must be linked to the “special circumstances” justifying the disclosure.

Here, Hyatt’s applications all contained large numbers of claims coupled with complex priority structure, making the circumstances “unique.” Given the extraordinary number and duplicative nature of the applications, it was “reasonable for the PTO to be concerned that the claims did not ‘differ substantially from each other’ and that some claims were ‘unduly multiplied.’” Therefore, the PTO was justified in issuing the Requirements. In addition, much of the alleged confidential information had already been disclosed in previous issued patents, so the newly disclosed information was limited to claim language and amendments of certain unpublished applications. The Court concluded that such disclosure of confidential information was necessary to “help the public understand the claimed scope” of the applications and to “explain the requirements the PTO imposed upon Mr. Hyatt and any further constraints it places upon his applications.” Because “special circumstances” exception justified the disclosure of the Requirements, the Court affirmed the granting of summary judgment to the PTO.


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