US high court slams patent office over attorney fees

The U.S. Supreme Court took the U.S. Patent and Trademark Office to task Wednesday, unanimously voting to deny the department's claim for attorney fees incurred while defending a failed patent's appeal.

In an opinion written by Justice Sonia M. Sotomayor, the high court affirmed the U.S. Court of Appeals for the Federal Circuit's ruling the department could not shift its fees to NantKwest, a Culver City, California biotechnology company developing cancer immunotherapy treatments. Peter v. NantKwest, 2019 DJDAR 11497.

The biotech company filed a claim in federal court in 2013 under Section 145 of the Patent Act to appeal the department's denial of a patent on a new cancer treatment method. After winning summary judgment, the department then filed a motion in 2017 to reclaim its fees "for the first time in the 170-year history of [Section] 145," court documents show.

At issue is the provision in Section 145 specifying, "All the expenses for the proceedings shall be paid by the applicant" and if that supersedes the long-held "American Rule" that presumes parties "are responsible for paying their own fees ... unless a statute or contract provides otherwise," court documents show.

The high court outright disagreed with the department's argument the American Rule only applies to statutes awarding fees to prevailing parties, wrote Sotomayor. "This court has never suggested that any statute is exempt from the presumption against fee shifting [,nor] has it limited its American Rule inquiries to prevailing party statutes," she wrote.

Rather, the Supreme Court has authored a "line of precedents ... addressing statutory deviation from the American Rule that do not limit attorney's fee awards to the 'prevailing party,'" Sotomayor continued in the opinion.

The high court also chided the department for its interpretation of Section 145, writing the use of the word "expenses" doesn't clearly include attorney fees, nor does its use of "all" expand its reach to include fees, according to Wednesday's high court opinion.