Featured / Supreme Court Activity

This morning the Supreme Court issued its opinion in Peter v. NantKwest, holding that the Patent and Trademark Office does not get to recover the salaries of its attorneys and paralegal employees when a patent applicant files a civil action in the United States District of Virginia to challenge a rejection of its application.

Justice Sotomayor wrote the opinion for a unanimous court. In the introduction of her opinion, she summarized the question presented and the Court’s holding:

Section 145 of the Patent Act affords applicants “dissatisfied with the decision of the Patent Trial and Appeal Board” an opportunity to file a civil action in the United States District Court for the Eastern District of Virginia. 35 U. S. C. §145. The statute specifies that “[a]ll the expenses of the proceedings shall be paid by the applicant.” Ibid. The question presented in this case is whether such “expenses” include the salaries of attorney and paralegal employees of the United States Patent and Trademark Office (PTO). We hold that they do not.

In terms of the Court’s analysis, the opinion highlights three basic reasons why the USPTO does not get to recover these salaries. First, “[t]he reference to ‘expenses’ in §145 does not invoke attorney’s fees with the kind of ‘clarity we have required to deviate from the American Rule’” that parties bear their own attorney’s fees. Second, the “'[t]he record of statutory usage’ also illustrates how the term ‘expenses’ alone does not authorize recovery of attorney’s fees.” And, third, “the Patent Act’s history reinforces that Congress did not intend to shift fees in §145 actions.”

As we indicated in our argument recap, the outcome here is not surprising. That said, as we noted in our argument preview, this case has broader implications than simply in patent cases given that there is a similar statutory provision applying to trademark applicants.