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On Dec 11, 2019  the Supreme Court decided Peter v. NantKwest Inc., a case considering whether a party opting to bring a challenge in federal district court to an adverse decision of the U.S. Patent and Trademark Office’s (PTO) Patent Trial and Appeal Board (PTAB) must pay the PTO’s resulting attorney’s fees. 

When a patent applicant is rejected by the PTO, and the PTAB affirms that decision on appeal, the aggrieved applicant may either pursue further (but relatively constrained) review in the U.S. Court of Appeals for the Federal Circuit--or the applicant may file a more expansive challenge in federal district court.  The latter option is authorized by 35 U.S.C. § 145, but the statute also provides that “[a]ll the expenses of the proceedings shall be paid by the applicant.”

Here, NantKwest challenged an adverse PTAB decision in federal district court, but lost.  After the judgment was affirmed by the Federal Circuit, the PTO sought reimbursement of its expenses from NantKwest, including nearly $80,000 in attorneys’ fees.  The district court denied recovery based on the “American Rule” that parties in federal court typically bear their own fees unless otherwise directed by Congress.  A divided en banc panel of the Federal Circuit ultimately affirmed the district court.  This decision, however, was in tension with the U.S. Court of Appeals for the Fourth Circuit’s construction of similar language in the Lanham Act.

By a vote of 9-0, the Supreme Court affirmed the judgment of the Federal Circuit. Justice Sotomayor, writing for a unanimous Court, held that the plain text of §145 did not provide the requisite “specific and explicit” indication that Congress had intended to depart from “the American Rule’s presumption against fee shifting.”  Accordingly, the PTO could not recover attorneys’ fees from NantKwest under §145.

To discuss the case, we have Robert J. Rando, Founder and Lead Counsel, The Rando Law Firm P.C.*

As always, the Federalist Society takes no particular legal or public policy positions. All opinions expressed are those of the speakers.

 

*Please note that Mr. Rando is co-Counsel on an Amicus brief filed on behalf of the Association of Amicus Counsel in this case.