SCOTUS Strikes Down Controversial US Patent and Trademark Office Policy of Recoupment of Attorneys’ Fees
Intellectual property owners have one fewer issue to worry about if they decide to bring a civil action against the US Patent and Trademark Office as a result of a denial of a patent or trademark application. On December 11, 2019, in Peter v. Nantkwest, Inc., the US Supreme Court unanimously struck down a controversial US Patent and Trademark Office (“USPTO”) rule requiring petitioners taking the USPTO to court to pay the USPTO’s attorneys’ fees, win or lose. Noting that the USPTO violates the traditional “American Rule” that litigants must pay for their own attorneys in absence of legislation stating otherwise. Justice Sonia Sotomayor said that the USPTO’s rule would be “a radical departure from long-standing fee-shifting principles adhered to in a wide range of contexts.”
The USPTO had sought attorneys’ fees against Nantkwest Inc., a pharmaceutical manufacturer after Nantkwest filed and lost a civil action it brought appealing the USPTO’s denial of its patent application. After losing the bid for fees at the district court and Federal Circuit, the USPTO appealed to the Supreme Court, taking the position that Section 145 of the Patent Act allowed for the recovery of attorneys’ fees because the statute states that the applicant must pay “all the expenses of the proceedings.” The Court disagreed that the use of the word “expenses” applied to attorneys’ fees because there was no specific or explicit indication that Congress intended for “expenses” to include “attorneys’ fees” when Section 145 was enacted.
The federal law governing trademarks contains a similar provision regarding payment of expenses, and the USPTO had taken the position that trademark applicants would also have to pay attorneys’ fees, so this Supreme Court of the United Sates decision appears to be good news for both patent and trademark applicants who want to press on by appealing denials to the courts.
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