In Nantkwest, Inc. v. Iancu, [2016-1794] (July 27, 2018), the en banc Federal Circuit affirmed the district court decision that an award of “all expenses” pursuant to 35 U.S.C. §145 did not include the USPTO’s attorneys’ fees in its unsuccessful defense of the rejection of Nantkwest’s application.

35 USC §145 permits a disappointed patent applicant to challenge
the PTAB’s decision in district court. However, applicants who invoke §145 are required by statute to pay “[a]ll the expenses of the proceedings” incurred by the U.S. Patent and Trademark Office in defending the Board’s decision, regardless of the outcome. Historically, the PTO sought recovery of travel and printing expenses, and more recently  expert witnesses fees.  Most recently, the PTO has interpreted §145 as including its attorneys’ fees.

Calling the American Rule a “bedrock principle” of this country’s jurisprudence, the majority of the Federal Circuit held that the American Rule prohibits courts from shifting attorneys’ fees from one party to another absent a “specific and explicit” directive from Congress. Contrary to the panel decision that sided with the PTO, the Federal Circuit affirmed the district court judgement denying the PTO’s request for attorneys fees.