In a sua sponte en banc order, the Federal Circuit has announced its intent to reevaluate the NantKwest decision permitting the PTO to recoup its attorney fees in defending a Section 145 civil action.
Issue: Did the panel in NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017) correctly determine that 35 U.S.C. § 145’s “[a]ll the expenses of the proceedings” provision authorizes an award of the United States Patent and Trademark Office’s attorneys’ fees?
After being finally rejected by both the examiner and the PTAB, a patent applicant can then take its case to court. The Statute provides two options – either (1) a direct appeal to the Federal Circuit or (2) filing a civil action in district court to pursue a trial on the merits under 35 U.S.C. 145.
An oddity of Section 145 civil action is the last line which states: “All the expenses of the proceedings shall be paid by the applicant.” In 2010, the en banc Federal Circuit ruled that the statute means what it says – expenses are to be paid by the applicant “regardless of the outcome.” Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010) (en banc). In NantKwest, the panel ruled that the “expenses” include attorney fees.
The panel decision was split – with Judges Prost and Dyk in majority and Judge Stoll in dissent and arguing that the term “expenses” is not sufficient to overcome the traditional american rule regarding attorney fees.