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Nantkwest, Inc. v. Matal

PTO May Recover Attorneys’ Fees Following Successful Defense in § 145 Appeal

Nantkwest, Inc. v. Matal, (Fed. Cir. June 23, 2017) (PROST, Dyk, Stoll (dissenting)) (E.D. Va.: Lee) (3 of 5 stars)

Fed Cir reverses denial of attorney fees motion. The case was a § 145 appeal to the Eastern District of Virginia from the PTO’s rejection of a patent application assigned to Nantkwest. The district court erred in reasoning that the “all expenses” provision of § 145 did not authorize payment of attorneys’ fees, particularly against the backdrop of the American Rule (in which litigants generally pay their own attorneys’ fees, win or lose). The opinion expresses “substantial doubts” that the American Rule applies to § 145 proceedings. Baker Botts, 135 S. Ct. 2158 (2015), does not mean that the American Rule’s specific requirements must apply to all fee statutes irrespective of a prevailing party. But even if the American Rule were to apply, § 145’s reference to awarding “expenses” includes attorneys’ fees. The opinion cites various dictionaries, as well as historical versions of the Patent Act and Taniguchi, 132 S. Ct. 1997 (2012), as demonstrating that “expenses” is a broader term than “costs,” and includes attorneys’ fees. The opinion also rejects Nantkwest’s argument that the PTO’s attorneys’ fees were not “expenses of the proceedings” because the PTO was represented by its own full-time employees, whose salaries it was obligated to pay regardless of the suit. Citing regional circuit authority and Raney, 222 F.3d 927 (Fed. Cir. 2000), the opinion reasons that the PTO can recover an apportionment of its lawyers’ salaries “because the litigation required the lawyers to divert their time away from other pending matters.” Op. at 14.

Dissent: Judge Stoll would have concluded that § 145 lacked the specificity necessary to overcome the American Rule’s general bar against shifting attorneys’ fees.

KEYWORDS: SECTION 145; ATTORNEYS’ FEES; AMERICAN RULE