{"id":1614,"date":"2017-06-23T12:52:05","date_gmt":"2017-06-23T16:52:05","guid":{"rendered":"https:\/\/patents.harnessip.com\/?p=1614"},"modified":"2017-06-25T11:54:28","modified_gmt":"2017-06-25T15:54:28","slug":"a-%c2%a7145-may-not-be-as-appealing-as-a-trip-to-the-federal-circuit","status":"publish","type":"post","link":"https:\/\/patents.harnessip.com\/?p=1614","title":{"rendered":"A \u00a7145 Action May Not Be As Appealing as a Trip to the Federal Circuit"},"content":{"rendered":"

In Nantkwest, Inc. v. Matal<\/a>, [2016-1794] (June 23, 2017), the Federal Circuit reversed the denial of attorneys fees to the USPTO in successfully defending civil action under 35 USC \u00a7145 brought by a patent applicant. \u00a0The statute provides that the applicant\u00a0must pay \u201c[a]ll of the expenses of the proceeding . . . regardless of the outcome.\u201d The district court held that “expenses” did not include attorneys fees.<\/p>\n

The Federal Circuit found that\u00a0the ordinary meaning of “expenses” as defined in\u00a0dictionaries and the Supreme Court\u2019s interpretation of\u00a0this term lend significant weight to the conclusion that\u00a0when Congress used the phrase \u201call expenses,\u201d it meant to\u00a0include attorneys\u2019 fees. \u00a0Accordingly, the Federal Circuit held \u201c[a]ll expenses of the proceedings\u201d
\nunder \u00a7 145 includes the pro-rata<\/em> share of the\u00a0attorneys\u2019 fees the USPTO incurred to defend applicant\u2019s\u00a0appeal.<\/p>\n

The Federal Circuit remanded the\u00a0case for the district court to enter an additional\u00a0award of $78,592.50 in favor of the Director.<\/p>\n

Although it may seem unfair that an applicant losing an appeal has to pay the Office’s cost in successfully defending the appeal of a rejection, as the Federal Circuit pointed out, this is how Congress chose to allocate the cost of an appeal to the district court. \u00a0What is unfair, however, is that this is how Congress chose to allocate the cost of an applicant’s successful<\/em> appeal of an improper rejection as well. \u00a0Thus, an applicant faced with an improper rejection who brings an action under \u00a7145 and wins, is still on the hook for the Patent Office’s attorneys fees. \u00a0This unfair result alone might suggest that Congress did not intent to include attorneys’ fees in “expenses,” otherwise Congress is putting a high price on justice.<\/p>\n

So why would an applicant chose to take a PTAB decision to district court, rather than appeal to the Federal Circuit? \u00a0The principal reason is that the PTAB may have pointed out an evidentiary defect in the applicant’s case. \u00a0If the applicant appeals to the Federal Circuit the record is fixed, and if the PTAB was correct about the defect, the Federal Circuit will simply affirm the PTAB. \u00a0However, in an action under \u00a7145 the applicant can introduce additional evidence, for example a declaration by the inventor, or by an expert, or perhaps even evidence of objective indicia of non-obviousness. \u00a0This could allow the applicant to obtain a patent, when an appeal would otherwise be futile. \u00a0Depending upon the importance of the invention, this might well be worth an additional $78,000 or so.<\/p>\n

However is a\u00a0\u00a7145 action the only way to obtain this result? \u00a0Perhaps not. \u00a0One might assume that if you do not appeal the PTAB decision that it becomes final and res judicata <\/em>will prevent the application from ever getting the claims that the were the subject of the appeal.\u00a0<\/em>This would be a good reason to pursue the\u00a0\u00a7145 action. \u00a0However, the underlying assumption may be wrong. \u00a0In In re Donohue<\/em>,\u00a0226 USPQ 619 (Fed. Cir. 1985), the Federal Circuit held that the Patent Office should not apply res judicata where the applicant made a different record, for example by supplying a new affidavit or declaration:<\/p>\n

Appellant has made a record different from that in Donohue I by submitting the Fields affidavit. This new record presents a new issue of patentability with respect to whether the previously sustained anticipation rejection can still be maintained. In view of this new issue, the PTO properly declined to make a formal res judicata rejection . . .<\/p><\/blockquote>\n

226 USPQ 621. \u00a0As long as Donohue<\/em> remains good law, a patent applicant can file an RCE or even a continuation, supplement its records, and continue to prosecute claims whose rejection was affirmed by the PTAB (and not have to spend $80,000 on the the USPTO’s expenses in a\u00a0\u00a7145 action.<\/p>\n

It is still unfair that a successful applicant in a\u00a0\u00a7145 action has to pay for the unsuccessful efforts of the USPTO in defending an improper rejection, but at least the applicant has an alternative route to continue to pursue the claims after an unsuccessful appeal to the PTAB.<\/p>\n","protected":false},"excerpt":{"rendered":"

In Nantkwest, Inc. v. Matal, [2016-1794] (June 23, 2017), the Federal Circuit reversed the denial of attorneys fees to the USPTO in successfully defending civil action under 35 USC \u00a7145 brought by a patent applicant. \u00a0The statute provides that the … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[62,61,44,63],"tags":[],"class_list":["post-1614","post","type-post","status-publish","format-standard","hentry","category-62","category-appeal","category-attorneys-fees","category-prosecution"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1614"}],"version-history":[{"count":2,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1614\/revisions"}],"predecessor-version":[{"id":1616,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1614\/revisions\/1616"}],"wp:attachment":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}