PETER, DEPUTY DIRECTOR, PATENT AND TRADEMARK OFFICE v. NANTKWEST, INC.

PTO Cannot Recover Salaries of its Legal Personnel under 145

Wednesday, December 11, 2019

An interesting decision and case where the Dep Director of the USPTO tried to recover salaries of legal personnel when the PTO decision was disputed. Seemed like a petty interpretation by the PTO to go for lawyers time in this dispute. SC also did some work on discussing the American Rule as it applies to litigants bearing the burden of costs for litigation.

TAGS:American Rule, Trademark, USPTO, PTO, Attorneys Fees,

Key Ideas From Case

Challenging Adverse Decisions by PTO

The Patent Act provides two mutually exclusive methods for challengingan adverse decision by the Patent and Trademark Office (PTO). A dissatisfied applicant may appeal directly to the Federal Circuit, 35 U. S. C. §141, or, as relevant here, may file a new civil action againstthe PTO Director in the United States District Court for the Eastern District of Virginia, §145. Under this second proceeding, the applicantmust pay [a]ll the expenses of the proceedings. Ibid.


The American Rule as applied to attorneys fees

The American Rule-the bedrock principle that [e]ach litigant pays his own attorneys fees, win or lose, unless a statute or contract provides otherwise, Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 253-provides the starting point for assessing whether §145authorizes payment of the PTOs legal fees. Contrary to the Governments view, this Court has never suggested that any statute is exempt from the presumption against fee shifting or limited its American Rule inquiries to prevailing party statutes.

 


Presumption Against Fee-Shifting

The presumption against fee shifting is particularly important here because reading §145 to permit an unsuccessful government agency to recover attorneys fees from a prevailing party would be a radical departure from longstanding fee-shifting principles adhered to in a wide range of contexts. Ruckelshaus v. Sierra Club, 463 U. S. 680, 683. Pp. 3-6.

 


Statutory Analysis Confirm Congress Understands Diff between Expenses and Attorneys Fees

The appearanceof expenses and attorneys fees together across various statutes indicates that Congress understands the terms to be distinct and not inclusive of each other. See, e.g., 11 U. S. C. §363(n).


141 Proceeding means No New Evidence

The Patent Act creates two mutually exclusive pathwaysto challenge an adverse decision by the PTO. The first permits judicial review by direct appeal to the United States Court of Appeals for the Federal Circuit. §141. There is no opportunity for the applicant to offer new evidence in a §141 proceeding, and the Federal Circuit must review thePTOs decision on the same administrative record that was before the [agency]. Kappos v. Hyatt, 566 U. S. 431, 434 (2012); 35 U. S. C. §144.


145 Hearing alllows new evidence BUT applicant required to pay All Expenses

The second pathway allows applicants to file a new civilaction against the Director of the PTO in federal district court. §145. Unlike §141, §145 permits the applicant topresent new evidence . . . not presented to the PTO. Kappos, 566 U. S., at 435. The district court acts as a factfinder when new evidence is introduced in a §145 proceeding and must make de novo determinations that take into account both the new evidence and the administrative record before the PTO. Id., at 444, 446. The parties may appeal thedistrict courts final decision to the Federal Circuit. 28 U. S. C. §1295(a)(4)(C).

Because §145 does not limit an applicants ability to introduce new evidence to challenge the denial of a patent, Kappos, 566 U. S., at 439, it can result in protracted litigation. As a condition for permitting such extensive review,the Patent Act requires applicants who avail themselves of§145 to pay [a]ll the expenses of the proceedings. 35 U. S. C. §145.


PTO tried to recover pro rata salaries FOR THE FIRST TIME

The PTO moved for reimbursement of expenses that included-for the first time in the 170-year history of §145-the pro rata salaries of PTO attorneys and a paralegal who worked on the case.


Presumption Against Fee Shifting Applies to ALL STATUTES

Sebelius v. Cloer, 569 U. S. 369 (2013), confirms that the presumption against fee shifting applies to all statutes-even those like §145 that do not explicitly award attorneysfees to prevailing parties.


Expenses DOES NOT include Legal Fees

Reading the term expenses alongside neighboringwords in the statute, however, supports a conclusion excluding legal fees from the scope of §145. The completephrase expenses of the proceeding is similar to the Latin expensæ litis, or expenses of the litigation. This term has long referred to a class of expenses commonly recovered inlitigation to which attorneys fees did not traditionally belong. See Blacks Law Dictionary 461 (1891) (defining expensæ litis to mean generally allowed costs); 1 J. Bouvier, Law Dictionary 392 (1839) (defining the term to mean thecosts which are generally allowed to the successful party); id., at 244 (excluding from the definition of costs the extraordinary fees [a party] may have paid counsel). These definitions suggest that the use of expenses in §145 would not have been commonly understood to include attorneysfees at its enactment.


PTO Cannot Recover Pro Rate Salaries under 145

For the foregoing reasons, we conclude that the PTO cannot recover the pro rata salaries of its legal personnel under§145 and therefore affirm the judgment of the Court of Appeals for the Federal Circuit.


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Law Office of Scott L Nielson - PTO Cannot Recover Salaries of its Legal Personnel under 145

PETER, DEPUTY DIRECTOR, PATENT AND TRADEMARK OFFICE v. NANTKWEST, INC.

PTO Cannot Recover Salaries of its Legal Personnel under 145

Wednesday, December 11, 2019

An interesting decision and case where the Dep Director of the USPTO tried to recover salaries of legal personnel when the PTO decision was disputed. Seemed like a petty interpretation by the PTO to go for lawyers time in this dispute. SC also did some work on discussing the American Rule as it applies to litigants bearing the burden of costs for litigation.

TAGS:American Rule, Trademark, USPTO, PTO, Attorneys Fees,

Key Ideas From Case

Challenging Adverse Decisions by PTO

The Patent Act provides two mutually exclusive methods for challengingan adverse decision by the Patent and Trademark Office (PTO). A dissatisfied applicant may appeal directly to the Federal Circuit, 35 U. S. C. §141, or, as relevant here, may file a new civil action againstthe PTO Director in the United States District Court for the Eastern District of Virginia, §145. Under this second proceeding, the applicantmust pay [a]ll the expenses of the proceedings. Ibid.


The American Rule as applied to attorneys fees

The American Rule-the bedrock principle that [e]ach litigant pays his own attorneys fees, win or lose, unless a statute or contract provides otherwise, Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 253-provides the starting point for assessing whether §145authorizes payment of the PTOs legal fees. Contrary to the Governments view, this Court has never suggested that any statute is exempt from the presumption against fee shifting or limited its American Rule inquiries to prevailing party statutes.

 


Presumption Against Fee-Shifting

The presumption against fee shifting is particularly important here because reading §145 to permit an unsuccessful government agency to recover attorneys fees from a prevailing party would be a radical departure from longstanding fee-shifting principles adhered to in a wide range of contexts. Ruckelshaus v. Sierra Club, 463 U. S. 680, 683. Pp. 3-6.

 


Statutory Analysis Confirm Congress Understands Diff between Expenses and Attorneys Fees

The appearanceof expenses and attorneys fees together across various statutes indicates that Congress understands the terms to be distinct and not inclusive of each other. See, e.g., 11 U. S. C. §363(n).


141 Proceeding means No New Evidence

The Patent Act creates two mutually exclusive pathwaysto challenge an adverse decision by the PTO. The first permits judicial review by direct appeal to the United States Court of Appeals for the Federal Circuit. §141. There is no opportunity for the applicant to offer new evidence in a §141 proceeding, and the Federal Circuit must review thePTOs decision on the same administrative record that was before the [agency]. Kappos v. Hyatt, 566 U. S. 431, 434 (2012); 35 U. S. C. §144.


145 Hearing alllows new evidence BUT applicant required to pay All Expenses

The second pathway allows applicants to file a new civilaction against the Director of the PTO in federal district court. §145. Unlike §141, §145 permits the applicant topresent new evidence . . . not presented to the PTO. Kappos, 566 U. S., at 435. The district court acts as a factfinder when new evidence is introduced in a §145 proceeding and must make de novo determinations that take into account both the new evidence and the administrative record before the PTO. Id., at 444, 446. The parties may appeal thedistrict courts final decision to the Federal Circuit. 28 U. S. C. §1295(a)(4)(C).

Because §145 does not limit an applicants ability to introduce new evidence to challenge the denial of a patent, Kappos, 566 U. S., at 439, it can result in protracted litigation. As a condition for permitting such extensive review,the Patent Act requires applicants who avail themselves of§145 to pay [a]ll the expenses of the proceedings. 35 U. S. C. §145.


PTO tried to recover pro rata salaries FOR THE FIRST TIME

The PTO moved for reimbursement of expenses that included-for the first time in the 170-year history of §145-the pro rata salaries of PTO attorneys and a paralegal who worked on the case.


Presumption Against Fee Shifting Applies to ALL STATUTES

Sebelius v. Cloer, 569 U. S. 369 (2013), confirms that the presumption against fee shifting applies to all statutes-even those like §145 that do not explicitly award attorneysfees to prevailing parties.


Expenses DOES NOT include Legal Fees

Reading the term expenses alongside neighboringwords in the statute, however, supports a conclusion excluding legal fees from the scope of §145. The completephrase expenses of the proceeding is similar to the Latin expensæ litis, or expenses of the litigation. This term has long referred to a class of expenses commonly recovered inlitigation to which attorneys fees did not traditionally belong. See Blacks Law Dictionary 461 (1891) (defining expensæ litis to mean generally allowed costs); 1 J. Bouvier, Law Dictionary 392 (1839) (defining the term to mean thecosts which are generally allowed to the successful party); id., at 244 (excluding from the definition of costs the extraordinary fees [a party] may have paid counsel). These definitions suggest that the use of expenses in §145 would not have been commonly understood to include attorneysfees at its enactment.


PTO Cannot Recover Pro Rate Salaries under 145

For the foregoing reasons, we conclude that the PTO cannot recover the pro rata salaries of its legal personnel under§145 and therefore affirm the judgment of the Court of Appeals for the Federal Circuit.


All information available throughout this website should be considered Attorney Advertising and is provided for informational purposes only.
NO INFORMATION ON THIS WEBSITE SHOULD BE CONSTRUED AS LEGAL ADVICE OR RELIED UPON AS SUCH IN ANY WAY.