Term: 2019
Docket: 18-801
Peter v. Nantkwest Inc.
- Pro
18-801 PETER V. NANTKWEST, INC. DECISION BELOW: 898 F.3d 1177 CERT. GRANTED 3/4/2019 QUESTION PRESENTED: When the United States Patent and Trademark Office (USPTO) denies a patent application, the Patent Act gives the unsuccessful applicant two avenues for seeking judicial review of the agency's decision. The applicant may appeal directly to the Federal Circuit, 35 U.S.C. 141, which "shall review the decision from which an appeal is taken on the record before the [USPTO],” 35 U.S.C. 144. Alternatively, the applicant may bring a civil action against the Director of the USPTO in district court, where the applicant may present additional evidence. 35 U.S.C. 145. If the applicant elects to bring such an action, "[a]ll the expenses of the proceedings shall be paid by the applicant." Ibid. The question presented is as follows: Whether the phrase "[a]ll the expenses of the proceedings" in 35 U.S.C. 145 encompasses the personnel expenses the USPTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation. LOWER COURT CASE NUMBER: 2016-1794
In the case of Peter v. Nantkwest Inc., 2019, the United States Supreme Court unanimously ruled that a patent applicant who appeals a rejection from the Patent and Trademark Office (PTO) to a district court must pay for all expenses incurred by PTO during litigation, regardless of whether they win or lose. However, this does not include attorney's fees as part of those "expenses". The decision reversed an earlier ruling by the U.S. Court of Appeals for Federal Circuit which had held that NantKwest was liable for nearly $78,000 in legal fees after unsuccessfully suing PTO over its denial of their cancer treatment patent application. The Supreme Court found that under American law there is a longstanding “American Rule” presumption stating each litigant pays his own attorney’s fees unless specifically stated otherwise.
In the dissenting opinion for Peter v. Nantkwest Inc., Justice Sotomayor, joined by Justice Ginsburg, argued that the majority's interpretation of "all expenses" in Section 145 of the Patent Act was overly broad and inconsistent with historical practices. They contended that this phrase should not include attorney’s fees because it goes against American common law tradition where each party bears its own legal costs unless a statute or contract explicitly states otherwise (the "American Rule"). The dissent pointed out that Congress knows how to deviate from this rule when it wants to and has done so clearly in other statutes but did not do so here. Therefore, they believed there is no reason to believe Congress intended such a deviation within Section 145. Furthermore, they noted that allowing recovery of attorney's fees could deter future litigants from pursuing claims under Section 145 due to financial risk which would undermine access to justice.
