by Dennis Crouch
The Supreme Court has granted writ of certiori in Iancu v. NantKwest Inc. on the question:
Whether the phrase “[a]ll the expenses of the proceedings” in 35 U.S.C. § 145 encompasses the personnel expenses the United States Patent and Trademark Office incurs when its employees, including attorneys, defend the agency in Section 145 litigation.
When an examiner refuses to allow an applied-for patent, the applicant can appeal to the USPTO’s internal administrative board (PTAB). If still unsuccessful, the applicant then has a choice of either (1) filing a civil action in federal court or (2) appealing directly to the Court of Appeals for the Federal Circuit. 35 U.S.C. § 145.
The provision authorizing the civil action ends with the statement:
All the expenses of the proceedings shall be paid by the applicant.
In prior cases, the Federal Circuit has held that “all the expenses” means that applicant must pay the expenses win-or-lose, including the USPTO’s taxable costs. Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010) (en banc). In NantKwest, the USPTO asked also for its attorney fees as part of “all the expenses.” (Note, the USPTO doesn’t hire outside attorneys to handle these, but it calculated its in-house attorney time and requested $100,000+).
The original NantKwest panel sided with the USPTO — holding that “expenses” include USPTO attorney fees. However, a 7-4 split of the en banc court changed direction and held that “expenses” does not include attorney fees. In its decision, the Federal Circuit focused on the traditional presumptive “American rule” on attorney fees (each party pays for its own attorney fees) and found that the “all the expenses” language was not sufficiently “specific and explicit” to overcome the presumptive rule.
Petition Stage Briefing:
In a separate fees case, the Court today issued an opinion in Rimini Street Inc. v. Oracle USA Inc., holding that that the copyright act’s allowance of “full costs” only extends to traditional “taxable costs” and does not include, for instance, expert witness, e-discovery, or jury consultant fees.