Posts Tagged: "fee shifting"

Recovering Fees and Expenses For U.S. Discovery Compliance in Foreign Litigation – Improbable Even When Possible

Under 28 U.S.C. Section 1782, parties engaged in (or expected to engage in) foreign litigation are empowered to  seek discovery in the United States for use in the foreign litigation. Specifically, under § 1782, foreign litigants may apply directly to any district court in the U.S. where a person or entity with information relevant to the foreign litigation can be located or found, and that court can order such discovery. If discovery is granted (which is usually the case), the party providing the discovery will typically bear the costs of providing it. As with any other discovery in the United States, the compliance costs are considered a “normal cost of doing business” and are not usually shifted to the party seeking discovery. However, Rule 45(d)(2)(B) does allow for nonparties to shift costs for discovery compliance in certain circumstances—i.e., where there is a “significant expense” arising from a specific order “compelling production or inspection.”  Yet, despite a fee-shifting mechanism for nonparties, courts have granted a very limited number of requests for the recovery of fees and costs for compliance in a § 1782 proceeding under Rule 45.

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.”

Filling in the Holes: The CASE Act is Where Good Intention Meets Good Policy

While there are a number of falsehoods being spread about the CASE Act by those who philosophically oppose any legislation that will help the creative community, there are a few honest critiques that are based on simple misunderstandings about the bill rather than malice. Take, for instance, an article published earlier this week on this blog which characterizes the CASE Act’s intentions as noble, but argues that there are “three gaping holes” that make for bad policy…. The CASE Act will not bring an end to copyright infringement, nor is it intended to. Subversive parties that intend to infringe and skirt the law are unlikely to be brought to justice under the CASE Act. But the CASE Act is good policy for achieving what it is intended to do: provide an alternative to federal court where consenting parties who presently cannot afford to, might finally get their day in court.

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.

Lincoln loved our patent system, Let’s not tear it down

Abraham Lincoln once called the patent system one of the three greatest advances in human history, along with the discovery of America and the printing press… The result is a patent system in crisis, which threatens our economic future. Small businesses received 30 percent of U.S. patents in 2000. Last year the number plummeted to 19.5 percent. Small companies undertake the risk and expense of developing breakthrough technologies that made us the most prosperous nation in history. When they lose confidence in the patent system the country will suffer.