Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

U.S. Supreme Court Reaffirms the American Rule In De Novo Challenges to the PTO

By Jonathan Moskin
February 01, 2020

In 2013, the Patent and Trademark Office (PTO) adopted a new policy under which any party commencing a de novo proceeding challenging a PTO decision would be responsible to pay a pro rata share of the salaries of the government attorneys working on the matter, based on a new interpretation of language that has appeared in the Patent Act for 175 years — and more recently was included in the Lanham Act as well. That language requires the plaintiff seeking de novo review to pay "all expenses of the proceedings," win or lose. However, the term expenses had always in practice been construed (until recently) to mean only lesser costs — not attorneys' fees. On Dec. 11, 2019, the Supreme Court rejected the PTO's new interpretation of the Patent Act in Peter v. NantKwest, Case No. 18-801, slip op., which held that the American Rule, a centuries-old principle under which each party bears its own attorneys' fees, does apply to this statute. The Court further concluded that the actual language of the statute itself simply does not support shifting fees.

Background

An applicant for a patent wishing to challenge the ultimate decision of the PTO has two options. The applicant can either appeal directly to the Federal Circuit or, alternatively, under 35 U.S.C. §§141 and 145, can commence a civil action in the U.S. District Court for the Eastern District of Virginia, effectively suing the PTO for relief. A Federal Circuit appeal is confined to the existing administrative record, whereas a civil action in the district court allows de novo review, meaning that the applicant can introduce new evidence supplemented by new discovery. However, Section 145 provides that in exchange for choosing this option, the applicant must pay "[a]ll the expenses of the proceedings."

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
New York's Latest Cybersecurity Commitment Image

On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.

Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office Image

A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.

Bit Parts Image

Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights

The Bankruptcy Hotline Image

Recent cases of importance to your practice.

How AI Has Affected PR Image

When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.