The Supreme Court has granted cert to Iancu in Iancu v. NantKwest, Inc. to resolve the question of whether all expenses incurred by the USPTO must be paid for by the applicant in a district court action under 35 U.S.C. 145 regardless of the outcome.
§145 allows for de novo review of an adverse PTAB decision in district court, instead of the direct appeal to the Federal Circuit under §141, but also states that “”[a]ll the expenses of the proceedings shall be paid by the applicant.” In this case, NantKwest’s patent application claims were rejected as obvious by the examiner at the PTO, which was upheld by the PTAB. NantKwest filed for review by the district court under §145. In a decision upheld by the Federal Circuit, the district court granted a motion for summary judgment for obviousness. Despite the USPTO’s custom of only requesting costs in both §145 and §141 appeals, the USPTO invoked the “all expenses” language to request both costs and attorney’s fees.
While NantKwest’s argument relies heavily on the “American System” and the 170 years of USPTO custom of not asking for attorney’s fees to inform the interpretation, the USPTO points to the Lanham Act and the historical meaning of expenses. Under the Lanham Act, a similar de novo review is available which also provides for “expenses” and was specifically and intentionally modeled after §145. In 2015, the 4th Circuit ruled that the Lanham Act allowed for the recovery of attorney’s fees, creating a seeming circuit split on the issue.
After being denied attorney’s fees in the district court, the Federal circuit granted them on appeal, only to be followed by a sua sponte en banc review where the panel was overturned. This led to the now granted petition for certiorari to the Supreme Court. How this case is decided will likely impact the future choices for appellate review between §141 and §145 and bares watching as the case moves forward.
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