Posts Tagged: "American Rule"

CAFC Dismisses USPTO’s Appeal on Expert Witness Fees in Hyatt II Based on Supreme Court NantKwest Analysis

On August 18, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Hyatt v. Hirshfeld (Hyatt II), the latest in a line of court rulings regarding a series of much maligned patent applications filed by prolific inventor Gil Hyatt with the U.S. Patent and Trademark Office (USPTO) in the 1990s. While the Federal Circuit’s most recent decision, which denied the USPTO’s request to shift expert witness fees even while the appellate court vacated attorney’s fees awarded to Hyatt, could be seen as a mixed victory for Hyatt, it continues to shine a light on an unfortunate legal situation in which an independent inventor continues to be denied patent rights despite strong evidence that the USPTO dragged their feet on examining Hyatt’s patents.

SCOTUS Holds in NantKwest that USPTO Cannot Be Reimbursed for Salaries of Legal Personnel

The Supreme Court ruled in Peter v. NantKwest today that the U.S. Patent and Trademark Office (USPTO) cannot recover the salaries of USPTO attorneys and paralegals who work on civil actions against the USPTO Director in the Eastern District of Virginia. The Court held that the language of Section 145 of the Patent Act, which says that applicants must pay all the expenses of the proceedings for a civil action, “does not overcome the American Rule’s presumption against fee shifting.” The USPTO argued that the Federal Circuit’s en banc 2018 decision holding “all expenses” does not include “expenses that the USPTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation,” is inconsistent with the ordinary meaning of  “expenses” and Section 145’s “history and purpose.”

Peter v. NantKwest: Government Counsel Struggles to Make the Case for Recovering Attorneys’ Fees

Justices Breyer, Kavanaugh, Ginsburg and Gorsuch and Chief Justice Roberts were among the most active questioners of Malcolm Stewart, representing the government of the United States, and Morgan Chu of Irell & Manella, representing NantKwest, during yesterday’s oral argument in Peter v. NantKwest at the Supreme Court. The question presented in the case is “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.” The government’s argument at yesterday’s hearing seemed shaky at best. Stewart himself admitted repeatedly that there was “no good explanation” for the fact that the U.S. Patent and Trademark Office (USPTO) had, as noted in NantKwest’s reply brief “until now…never even sought, much less been awarded, attorneys’ fees under § 145 in the nearly two centuries since its passage.”

NYIPLA Urges Supreme Court Not to Award USPTO Staff Attorney Salaries as ‘Expenses’ in Patent Appeals to ED of Virginia

On June 25, 2019, the New York Intellectual Property Association (NYIPLA) filed an Amicus Brief in support of the Respondent in Peter v. NantKwest, Inc., No. 18-801, pending before the Supreme Court.  NantKwest raises the issue of whether patent applicants who are dissatisfied with U.S. Patent and Trademark Office (USPTO) decisions and subsequently appeal to the U.S. District Court of the Eastern District of Virginia must pay USPTO staff attorney salaries as part of “[a]ll the expenses of the proceedings” under 35 U.S.C. Section 145, which allows applicants to pursue a civil action against decisions of the USPTO Director.

En banc CAFC: Patent applicant Not required to pay PTO attorney fees in District Court appeal

NantKwest filed suit in district court under 35 U.S.C. § 145 to contest the PTO’s rejection of its patent application. The USPTO prevailed and filed a motion for reimbursement of all of its litigation expenses, including attorney’s fees. 35 U.S.C. § 145 requires that “all expenses of the proceeding be paid by the applicant,” which the USPTO claimed included their fees and costs… While Congress can create fee-shifting statutes, 35 U.S.C. § 145 did not reflect explicit congressional authorization for fee-shifting that would displace the American Rule.