The Federal Circuit’s 23 June decision to award attorneys’ fees to the USPTO was vacated and biotechnology company NantKwest’s request for an en banc rehearing was granted in a sua sponte rehearing en banc decision.
The principal issue at dispute is whether Section 145’s “[a]ll expenses of the proceedings” provision authorises an award of the USPTO’s attorneys’ fees.
In June, the Federal Circuit ruled that ‘all expenses’ contains “breath” and the provision places “substantial financial burden” on applicants of Section 145 appeals.
The Federal Circuit held: “Congress intended that all applicants unconditionally assume this financial burden when seeking review directly in district court—whether they win, or lose. We thus concluded that Congress drafted this provision without requiring any degree of success on the merits (much less a prevailing party) as a necessary precedent for shifting this ‘heavy economic burden’ onto the applicant.”
Circuit Judge Kara Farnandez Stoll dissented from the majority in June, arguing that Section 145 fails to provide the necessary congressional directive to overcome the American Rule’s bar against shifting attorneys’ fees.
Under the American Rule, “each party in a lawsuit ordinarily shall bear its own attorney’s fees unless there is express statutory authorisation to the contrary.”
The full Federal Circuit will now rehear the case.