Peters v. NantKwest

This morning, the U.S. Supreme Court will hear oral argument in Peters v. NantKwest Inc.  The question presented is "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."  As I wrote in June 2017 (and quoted again in March 2019):

The examiner and the PTAB rejected the inventor's patent application on nonobviousness grounds, and rather than immediately appealing to the Federal Circuit (which is one option under these circumstances) the applicant initiated a lawsuit against the director in the U.S. District Court for the Eastern District of Virginia (which is another, less commonly invoked, option).  The district court ruled in favor of the director, and in May the Federal Circuit affirmed (here).  The district court also awarded the director expert witness fees but denied a request for attorney's fees. On appeal of this matter, the Federal Circuit (in an opinion by Chief Judge Prost) concludes that the relevant statute--which in the present context is not 35 U.S.C. § 285, but rather 35 U.S.C. § 145--requires the court to award both expert and attorneys' fees--and, although it isn't at issue in this case, since the director won--the rule applies regardless of outcome.  Here is the relevant statute (35 U.S.C. § 145): 

An applicant dissatisfied with the decision of the Patent Trial and Appeal Board in an appeal under section 134(a) may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the Eastern District of Virginia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Patent Trial and Appeal Board, as the facts in the case may appear and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.

The Federal Circuit later decided sua sponte to rehear the case en banc, and concluded that the statute does not authorize awards of attorneys' fees to the USPTO.  Then in March 2019 the Supreme Court granted cert.  I was a little surprised, because to my knowledge § 145 actions are rare.  (R Street Institute's Supreme Court amicus brief states at p.17 that "There appear to be only eight such actions of colorable merit filed since 2011.")  On the other hand, the Federal Circuit's en banc opinion created a conflict with the Fourth Circuit's interpretation of the analogous statute applicable in trademark matters, so that may explain the Supreme Court's interest.  If it were up to me, I would have let it go, but for what it's worth the argument is today.  Scotus Blog has a good write-up by Professor Ronald Mann, and links to the briefs here.  Discussion also on IPWatchdog here.

Update:  Here's the oral argument transcript.