16 F.4th 855
Fed. Cir.2021Background:
- Gilbert Hyatt filed numerous, lengthy patent applications and challenged adverse PTAB decisions by suing under 35 U.S.C. § 145 (district-court de novo review allowing new evidence).
- The district court ordered the PTO to issue some patents and awarded Hyatt attorney’s fees under the EAJA, but denied the PTO’s request to recover its expert-witness fees under § 145.
- On appeal in a prior Federal Circuit decision (Hyatt I), the court vacated/remanded the district court’s patent-issuance ruling, meaning Hyatt is no longer a prevailing party for EAJA purposes.
- The central legal question on this appeal was whether § 145’s phrase “all the expenses of the proceedings shall be paid by the applicant” is a sufficiently specific and explicit statutory waiver of the American Rule to require applicants to pay the PTO’s expert witness fees.
- The court applied the Supreme Court’s American Rule framework (notably Peter v. NantKwest) and examined statutory text, historical definitions, congressional reenactment, and longstanding district-court practice.
- Holding: the court vacated the EAJA attorney-fee award (Hyatt not prevailing after Hyatt I) and affirmed the denial of expert-witness fees because § 145’s language is not specific and explicit enough to overcome the American Rule.
Issues:
| Issue | Plaintiff's Argument (Hyatt/applicant) | Defendant's Argument (PTO) | Held |
|---|---|---|---|
| Whether Hyatt was a prevailing party entitled to EAJA fees | Hyatt relied on the district-court victory and EAJA’s prevailing-party requirement | PTO contended the Federal Circuit’s vacatur/remand in Hyatt I means Hyatt is not a prevailing party | Vacated the attorney-fee award; Hyatt is not a prevailing party after Hyatt I |
| Whether 35 U.S.C. § 145 requires applicant to pay PTO expert-witness fees | Hyatt argued § 145’s “expenses” is not specific enough; American Rule bars shifting expert fees | PTO argued “all the expenses of the proceedings” (and longstanding practice) includes expert fees and is broader than “costs” | Affirmed denial of expert fees: § 145 does not specifically and explicitly shift expert witness fees under the American Rule |
Key Cases Cited
- Peter v. NantKwest, Inc., 140 S. Ct. 365 (2019) (applies American Rule to § 145; "expenses" not clear to shift attorney’s fees)
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (1975) (Congress must clearly authorize fee-shifting to overcome American Rule)
- Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. 121 (2015) (EAJA-like clarity required to deviate from the American Rule)
- West Virginia Univ. Hosps., Inc. v. Casey, 499 U.S. 83 (1991) (distinct analysis of attorney’s fees versus expert fees)
- Key Tronic Corp. v. United States, 511 U.S. 809 (1994) (statutory context can show intent to shift fees but specificity required)
- Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291 (2006) (no taxation of witness fees as costs unless statute explicitly refers to witness fees)
- Kappos v. Hyatt, 566 U.S. 431 (2012) (standard of review for PTAB factual findings on § 141 review)