USPTO can’t claim expert fees, Fed Circuit rules
The US Patent and Trademark Office (USPTO) can’t claim back expert witness fees it incurred defending patent rejections, the US Court of Appeals for the Federal Circuit ruled yesterday, August 18.
The USPTO appealed against a US District Court for the District of Columbia decision ordering it to pay its own expert witness fees in a case stemming from its rejection of four patent applications filed by inventor Gilbert Hyatt.
Legal convention in the US stipulates that all parties must ordinarily bear their own legal fees, a practice known as the ‘American Rule’. The USPTO argued that district courts had followed a decades-long exception to this rule in the case of expert fees. This is based on language in patent legislation known as section 145, which states that “all the expenses of the proceedings shall be paid by the applicant”.
But the Federal Circuit has now ruled that this exception does not have a strong enough legal basis to to be applied widely to these types of expenses. “We do not lightly overturn decades of practice in federal district courts,” wrote Circuit Judge Todd Hughes on behalf of a three-judge panel, explaining that section 145 does not “specifically and explicitly invoke expert witness fees”.
The panel based its decision on the US Supreme Court’s 2019 decision in NantKwest, which held that the USPTO couldn’t recoup attorney’s fees. In that case, the USPTO had abandoned its long-standing practice of not seeking to recover such fees, and cited the same text in section 145 to justify its position.
“The central logic of NantKwest is applicable to our decision here, indicating that § 145 does not shift expert witness fees,” Hughes wrote, adding: “The American Rule sets a high bar that vague definitions cannot overcome, particularly considering the many instances in which Congress has explicitly shifted expert fees.”
The key difference between NantKwest and this dispute, the USPTO had argued, was that district courts had awarded expert witness fees under the statute for “decades”, as opposed to NantKwest where the USPTO only began seeking attorneys’ fees for the first time. The USPTO told the court it should take Congress’s inaction on changing section 145 as an implicit endorsement of this practice.
But NantKwest was based on the language in the statute books rather than historical practice, and the same logic should apply here, Hughes wrote: “Longstanding practice is not enough to overcome the American Rule presumption … the premise that Congress is aware of a particular judicial interpretation is less compelling when the issue has been primarily uncontested.”
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
Today’s top stories
Wilson Sonsini hires veteran IP litigation lawyer
Russian publisher demands Telegram crackdown on book piracy
China’s Olympic body vows to protect star athletes’ trademarks
