Majority Found No Overt Congressional Expression To Cover Fees, While Dissenting Faction Found “Expenses” Meant All Expenses Inclusive Of Attorney’s Fees.
In Nantkwest, Inc. v. Iancu, 2016-1794 (Fed. Cir., en banc, July 27, 2018) (precedential), the Federal Circuit considered the question of whether attorney’s fees were recoverable under a federal statute applicable to “all expense of the proceeding incurred” by the party. The majority, on a 7-4 vote, decided the Congressional intent was not express enough to override the application of the American Rule that each side bear their own fees unless a statute or contract compels otherwise.
The precise issue involved a situation applicable to patent applicants, where the U.S. Patent and Trademarks’ Patent Trial and Appeal Board affirms an examiner’s rejection of a patent application. Under section 145 of the Patent Act, the disappointed applicant can challenge that decision in a district court de novo action, with applicant needing to pay “all expenses of the proceeding incurred” by the USPTO in defending the Board’s decision regardless of outcome as a condition to the district court action. The USPTO has been allowed recovery of travel, printing, and expert witness costs under the fee-shifting provision. However, the Federal Circuit had to face whether attorney’s fees were within the definition of “expenses.”
The Federal Circuit en banc majority concluded that the “expense” language was not displaced by the American Rule after an analysis of analogous areas where Congress knew when to make fee recovery more explicit. The dissent believed that “expenses” meant just that—all expenses, inclusive of fees in favor of the USPTO, fearing that the majority decision resulted in an unnecessary conflict before the federal circuit court of appeals.
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