SCOTUS’ NantKwest ruling ‘common sense’, say lawyers
Litigants cannot be forced to pay the attorneys’ fees of the US Patent and Trademark Office (USPTO), the US Supreme Court has ruled.
In a highly-anticipated decision issued in Iancu v NantKwest yesterday, December 11, the Supreme Court reinforced the so-called ‘American Rule’ that requires litigants to pay their own attorneys’ fees.
Normally, the American Rule applies except where there is a specific exception in the law and in 2012, the USPTO dropped its long-standing policy of not seeking to recover attorneys’ fees.
The USPTO cited section 145 of the Patent Act, which says that parties can challenge a decision of the USPTO in court, but must pay “all the expenses of the proceedings”.
According to the Supreme Court, however, this provision does not include “specific and explicit” authorisation for the USPTO to recoup attorneys’ fees.
Karen Sebaski, counsel at Holwell Shuster & Goldberg, said that the Supreme Court had issued a “resounding rejection” of the USPTO’s recently-adopted policy.
“A ruling to the contrary could have had a chilling effect on appeals filed under section 145,” Sebaski said.
She said that yesterday’s decision would benefit both patent and trademark owners looking to file appeals under section 145 and a similar provision in the Lanham Act, which deals with trademark law.
“The NantKwest decision should facilitate such appeals from a cost perspective,” she added.
The dispute arose after immunotherapy research company NantKwest unsuccessfully brought a section 145 challenge against the USPTO in 2017.
The US District Court for the Eastern District of Virginia awarded the USPTO its experts’ fees, but not attorneys’ fees.
The USPTO fought the decision, taking its appeal all the way to the Supreme Court. In yesterday’s ruling, the US’ top court held that section 145 did not contain “specific and explicit” authorisation for the USPTO to recoup attorneys’ fees.
Speaking to WIPR, Josh Rich, partner at McDonnell Boehnen Hulbert & Berghoff, said that the Supreme Court’s ruling was “common sense”.
“The American Rule against fee shifting is so ingrained in US litigation that it really should require special clarity for an exception, and section 145 isn’t so clear,” he said.
“Section 145 proceedings are already expensive, and therefore very rare. If the applicant had to bear the USPTO’s attorney’s fees, the cost would become prohibitive and likely eliminate section 145 as an option for review of [USPTO] decisions,” Rich added.
Richard Weinblatt, attorney at Stamoulis & Weinblatt, told WIPR that the Supreme Court ruling was a win for inventors.
“Under the prior administration, the USPTO implemented several policies and procedures not favourable to inventors and patent owners, many of which continue today,” Weinblatt said.
“It is good to see the Supreme Court issue a ruling that is pro-inventor and that informs the USPTO that it has gone too far in its policies that are unfavourable to inventors and patent owners,” he added.
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