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Peter v. NantKwest

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Supreme Court of the United States
Peter v. NantKwest, Inc.
Term: 2019
Important Dates
Argument: October 7, 2019
Decided: December 11, 2019
Outcome
Affirmed
Vote
9-0
Majority
Chief Justice John G. Roberts • Clarence Thomas • Ruth Bader Ginsburg • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh


Peter v. NantKwest, Inc. is a case argued before the Supreme Court of the United States on October 7, 2019, during the court's October 2019-2020 term. The case came on a writ of certiorari to the United States Court of Appeals for the Federal Circuit. The case concerned whether applicants challenging a patent rejection under Section 145 of the U.S. Patent Act (35 U.S.C. § 145) must pay attorneys' fees for the United States Patent and Trademark Office (PTO).[1]

The court affirmed the decision of the Federal Circuit in a unanimous ruling, holding the "PTO cannot recover the salaries of its legal personnel under §145."[2]

HIGHLIGHTS
  • The case: The PTO rejected Dr. Hans Klingemann and NantKwest, Inc.'s, patent application. The Patent Trial and Appeal Board affirmed the rejection. Klingemann challenged the rejection under 35 U.S.C. § 145 in federal district court. The district court and the Federal Circuit Court of Appeals affirmed the PTO's patent rejection. The PTO filed a motion for reimbursement of attorneys' fees under § 145, which the district court denied. On appeal, a divided Federal Circuit panel reversed the district court's judgment. Sitting en banc, the Federal Circuit then vacated the panel's decision and affirmed the district court's initial rejection of the motion for attorneys' fees reimbursement.[1] The PTO appealed to the U.S. Supreme Court, arguing the Federal Circuit's en banc ruling "contravenes the ordinary meaning of 'expenses' and is inconsistent with Section 145’s history and purpose."[3]
  • The issue: Whether the phrase "[a]ll the expenses of the proceedings" in 35 U.S.C. 145 encompasses the personnel expenses the USPTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation.[4]
  • The outcome: In a unanimous opinion, the court affirmed the Federal Circuit's decision, holding the "PTO cannot recover the salaries of its legal personnel under §145."[2]


    • You can review the lower court's opinion here.

    Timeline

    The following timeline details key events in this case:

    • December 11, 2019: U.S. Supreme Court affirmed the U.S. Court of Appeals for the Federal Circuit's ruling.
    • October 7, 2019: Oral argument
    • June 28, 2019: The U.S. Supreme Court agreed to hear the case.
    • December 21, 2018: Andrei Iancu, the petitioner, filed a petition with the U.S. Supreme Court.
    • July 27, 2018: The U.S. Court of Appeals for the Federal Circuit affirmed the Eastern District of Virginia's ruling.

    Background

    In 2001, Dr. Hans Klingemann applied for a patent for a cancer treatment method. The application was assigned to NantKwest, Inc. The United States Patent and Trademark Office (PTO) rejected the application in 2010 and the PTO Patent Trial and Appeal Board affirmed the rejection in 2013.[1]

    Klingemann challenged the rejection under 35 U.S.C. § 145, filing a complaint in the U.S. District Court for the Eastern District of Virginia. The district court granted summary judgment to the PTO. On appeal, the United States Court of Appeals for the Federal Circuit affirmed the district court's ruling.[1]

    The PTO filed a motion for reimbursement under § 145, asking for $78,592.50 in attorneys' fees and $33,103.89 in expert witness fees. The district court denied the motion with respect to the attorneys' fees. The PTO appealed the denial and a divided panel of the Federal Circuit reversed the district court's judgment. Sitting en banc, the Federal Circuit vacated the panel's decision and affirmed the district court's initial rejection of the motion for attorneys' fees reimbursement.[1]

    The PTO appealed to the U.S. Supreme Court, arguing the Federal Circuit's en banc ruling "contravenes the ordinary meaning of 'expenses' and is inconsistent with Section 145’s history and purpose."[3]

    35 U.S.C. § 145

    Section 145 of the Patent Act (35 U.S.C. § 145) authorizes an applicant to challenge the PTO's rejection of a patent application in federal district court. The law stipulates, "All the expenses of the proceedings shall be paid by the applicant," meaning the applicant who challenges the PTO under § 145 must pay his or her own expenses and the PTO's expenses. The requirement applies regardless of the suit's outcome. When the U.S. Supreme Court heard the case in 2019, the PTO had used the provision to recover attorneys' travel expenses, printing expenses, court reporter fees, and fees for expert witnesses. According to the Federal Circuit, "For more than 170 years, however, the PTO never sought—and no court ever awarded—attorneys' fees under § 145."[1]

    Questions presented

    The petitioner presented the following question to the court:

    Question presented:

    Whether the phrase "[a]ll the expenses of the proceedings" in 35 U.S.C. 145 encompasses the personnel expenses the USPTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation.[4]

    Outcome

    In a unanimous opinion, the court affirmed the judgment of the United States Court of Appeals for the Federal Circuit, holding the "PTO cannot recover the salaries of its legal personnel under §145." Justice Sonia Sotomayor delivered the opinion of the court.[2]

    Opinion

    In her opinion, Justice Sotomayor wrote the court considered the principle known as the "American Rule," in which each litigant pays his or her own attorney's fees unless the law or a contract says otherwise. Sotomayor disagreed with the government's argument that the American Rule did not apply in this case.[2]

    Examining the language of §145, Sotomayor wrote, "The 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.'" She also argued the surrounding language in the law "supports a conclusion excluding legal fees from the scope of §145."[2]

    Text of the opinion

    Read the full opinion here.

    Audio

    Audio of oral argument:[5]



    Transcript

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 United States Court of Appeals for the Federal Circuit, Nantkwest, Inc. v. Iancu, decided July 27, 2018
    2. ↑ 2.0 2.1 2.2 2.3 2.4 Supreme Court of the United States, Peter v. NantKwest Inc., decided December 11, 2019
    3. ↑ 3.0 3.1 Supreme Court of the United States, Peter v. NantKwest, Inc.: "Petition for a writ of certiorari," accessed July 3, 2019
    4. ↑ 4.0 4.1 Supreme Court of the United States, Peter v. NantKwest: "Questions presented," accessed July 3, 2019
    5. ↑ Supreme Court of the United States, "Oral argument - Audio, Peter v. NantKwest, Inc.," accessed October 22, 2019
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