SCOTUS Opinion: Court Enforces The “American Rule” Of Costs Against The Patent And Trademark Office

The Patent Act provides that when an applicant for a patent brings suit against the Patent and Trademark Office (PTO) when the Office rejects the applicant’s patent, the applicant must pay “[a]ll the expenses of the proceedings.” In Peter v. Nantkwest, Inc., a patent applicant sued the PTO under the Act when the PTO denied its application for a method of treating cancer. The applicant lost in the district court and the Federal Circuit. The PTO then, under the Act, requested that the applicant pay for all of the PTO’s pro-rata salaries of its attorneys and a paralegal that worked on the case. The district court denied the request on the basis that the word “expenses” was not clear enough to rebut the “American Rule” that all parties are responsible for their own attorneys’ fees. An en banc Federal Circuit affirmed. The Court, in a unanimous opinion by Justice Sotomayor, affirmed again, emphasizing that the presumption of the American Rule applies to all statutes, and that the Act’s requirement to pay all “expenses” was not a “specific and explicit” directive by Congress to override that Rule. The Court also noted that this was the first time in the 170-year history of the Patent Act that the PTO had ever requested its attorneys’ fees, which was also a strong indicator that such an award was not intended.

A link to the opinion is here.