On December 11, 2019, the Supreme Court unanimously decided that the term “expense” under §145 of the Patent Act does not include the salaries of the USPTO’s legal personnel, and put an end to the USPTO’s attempts to recover attorneys’ fees in court challenges to its decisions.
The Peter v. NantKwest, Inc. dispute arose after the USPTO denied NantKwest’s patent application for a method to treat cancer in 2013. NantKwest unsuccessfully appealed the USPTO’s decision in 2017, and the U.S. District Court for the Eastern District of Virginia awarded the USPTO its experts’ fees, but not attorneys’ fees. The district court held that the so-called “American Rule” includes a presumption that litigants pay their own attorneys’ fees. The USPTO challenged this decision and tried to recoup its “expenses,” arguing that the “expenses” mentioned in 35 U.S.C. § 145 included the salaries of its attorneys and paralegals involved in the case. Sitting en banc, the Federal Circuit agreed with the district court on July 27, 2018, and the USPTO appealed to the Supreme Court. The Supreme Court granted the USPTO’s petition for certiorari.