On October 7, 2019, the Supreme Court heard oral argument in Peter v. NantKwest Inc., a case which considers 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 application 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.
Thereafter, the Supreme Court granted certiorari to consider whether the phrase “[a]ll the expenses of the proceedings” in 35 U.S.C. § 145 encompasses the personnel expenses the PTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation.
To discuss the case, we have Robert J. Rando, Founder and Lead Counsel, The Rando Law Firm P.C.*
*Please note that Mr. Rando is co-Counsel on an Amicus brief filed on behalf of the Association of Amicus Counsel in this case.
As always, the Federalist Society takes no particular legal or public policy positions. All opinions expressed are those of the speakers.