Posts Tagged: "Peter v. Nantkwest"

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.”

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.”

Next week, the Supreme Court will hear the first of six IP cases granted cert last term. On Monday, the Court will hear Peter v. NantKwest, in which the question presented 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 Court will heard other IP cases in November and December, while Google v. Oracle, Berkheimer v. HP, and Hikma v. Vanda await a decision on cert, and petitions in Straight Path IP Group, LLC v. Apple Inc., et al. and Athena Diagnostics v. Mayo Collaborative Services have the patent world holding its collective breath.

When a patent or trademark applicant loses in front of the U.S. Patent and Trademark Office (USPTO), they can either appeal to a court of appeals or develop a fuller record by starting a district court action. If the applicant goes to district court, then the applicable statute says that the applicant-appellant pays “[a]ll the expenses of the proceedings,” and everyone at one time agreed that those expenses did not include fees for the government’s attorneys. That changed in 2013, when the USPTO unilaterally started including its attorney and support staff fees amongst the expenses. On the first Monday of October—the first day of arguments in the Supreme Court’s 2019 term—the Court will hear argument in Peter v. NantKwest, No. 18-801. The question in that case is whether the word “expenses” includes the government’s attorneys’ fees. On July 22, we filed an amicus brief on behalf of the American Intellectual Property Law Association (AIPLA) arguing that it does not.

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.