Federal Circuit backs USPTO attorneys’ fees rule
The US Court of Appeals for the Federal Circuit has backed the US Patent and Trademark Office’s (USPTO) stance on attorneys’ fees.
In a precedential decision on Friday, June 23, the Federal Circuit ruled against biotechnology company NantKwest, ordering it to pay attorneys’ fees.
Dr Hans Klingemann filed a patent application in 2001, directed to a method of treating cancer by administering "natural killer cells”.
The USPTO rejected Klingemann’s application on obviousness grounds, and the Patent and Trial Appeal Board (PTAB) affirmed the examiner’s rejection.
NantKwest, as assignee of the application, appealed to the district court under 35 USC section 145.
Section 145 provides that an applicant dissatisfied with the PTAB’s decision may appeal directly to the US District Court for the Eastern District of Virginia in lieu of immediate appeal to Federal Circuit.
The statute also provides that the applicant must pay “[a]ll of the expenses of the proceeding”, “regardless of the outcome”.
After winning at the district court, the director of the USPTO filed a motion to recover $111,696.39 of the USPTO’s fees under the section 145 expense provision (seeking $78,592.50 in attorneys’ fees and $33,103.89 in expert fees).
Although the district court granted the USPTO’s expert fees, it denied its requested attorneys’ fees, citing the “American Rule”.
Under the rule, litigants pay their own attorneys’ fees, unless a statute or contract provides otherwise.
According to the Federal Circuit, the lower court had concluded that the "all expenses" provision of the statute was neither “sufficiently specific nor explicit enough for the authorisation of attorneys’ fees” under this.
On appeal, the USPTO argued that the district court had erred by excluding attorneys’ fees under the section, an argument that the Federal Circuit agreed with.
“Given the US Supreme Court’s construction of ‘expenses’, the guidance dictionary and treatises provide on this term, and the context in which Congress applied it, we conclude that the term ‘expenses’ includes the USPTO’s attorneys’ fees under section 145,” said Chief Judge Sharon Prost, on behalf of the court.
The Federal Circuit reversed the district court’s decision and remanded the case for the court to enter an additional award of $78,592.50 in favour of the director of the USPTO.
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