Nantkwest, Inc. v. Matal

STOLL, Circuit Judges.

Dissenting opinion filed Circuit Judge STOLL.

PROST, Judge. Chief Nantkwest, appeals Inc. from a decision of the United States District Virginia District granting-in- Eastern part and denying-in-part the United States (“USPTO”) Patent Trademark Office order, motion fees. In Director’s court granted district the Director’s re- quested witness’ fees but the re- denied quested attorneys’ ap- fees. The Director peals the court’s denial of We reverse.

I Klingemann Dr. Hans filed a patent application to a directed method treating by administering cancer natural years killer cells. After several of examina- tion, rejected Klingem- the USPTO Dr. (2010). grounds. Apply- 176 L.Ed.2d 998 application on obviousness aim’s Rule, Trial Board in order Appeal Patent found that “ (“PTAB”) rejec the examiner’s recover must [defendants affirmed these Nantkwest, assignee provision be able articulate a tion clearly district court them to appealed explicitly the allows application, provided recovery attorneys’ § 145. We have Plaintiff.” 35 U.S.C. summary pro and the technology of the 3-4. The district court concluded that a J.A. court ceedings expenses” provision at the USPTO and district the of the statute “[a]Il Nant companion appeal. sufficiently specific explicit neither nor in Nantkwest’s was Kwest, Lee, K. 2015- attorneys’ Inc. v. Michelle No. for enough the authorization of 864, 865-68, 2095, 2017 WL Fed.Appx. appeal, 686 fees under this Rule. Id. the On (Fed. 2017). 3,May argues 1735330 Cir. Director the district court by excluding erred the attor- USPTO’s applicant that an provides Section 145 jurisdic- fees under 145. We have may the PTAB’s decision dissatisfied with 1295(a)(4)(C). tion under 28 U.S.C. Dis directly to the United States appeal of Court for the Eastern District trict II this appeal immediate

Virginia lieu of The further 35 U.S.C. 145. statute court. on whether principal appeal issue applicant pay “[a]ll that the must provides § 145’s proceedings” “[a]ll the id., proceeding,” the of the of the USP- provision authorizes award outcome,” Kap “regardless Hyatt of the v. TO’s fees under this section.2 (Fed. 2010) 1320, 1337 Cir. pos, 625 F.3d We a in review district court’s (en banc), remanded, 566 U.S. aff'd de terpretation of a statute novo. Weather 431, 1690, 182 704 132 S.Ct. L.Ed.2d Interior, 1379, by Dep’t v. the 466 F.3d (2012). prevailing After the district (Fed. 2006). construing “In Cir. merits, on the Director filed regulation, by inspect or we begin statute $111,696.39 motion to recover of the USP- language plain meaning.” its Meeks provi § 145 expense TO’s fees under the 1363, (Fed. West, v. 216 F.3d Cir. $78,592.50 in (seeking sion. See J.A. 84 (citation omitted). 2000) In the absence of fees) (including paralegal term, give a definition of a courts fees).1 $33,103.89 expert “ordinary, contemporary, their com words Although granted the district court meaning.” Taylor, mon Williams v. fees, request- it denied its expert USPTO’s 120 S.Ct. 146 L.Ed.2d U.S. fees, citing “American ed (2000). Rule, liti- Rule.” J.A. 10-11. Under this Under U.S.C. pay win or gants their own lose, applicant unless or contract the deci- provides [a]n a statute dissatisfied with may, ap- Standard sion of the ... unless [PTAB] otherwise. Hardt Reliance Co., 242, 252-53, 130 peal Ins. been taken the United States Life value, Throughout briefing, 1. To arrive at this USPTO calculat- the Director rou- tinely "per- refers these fees as pro-rata ed the of the of the two share salaries See, expenses.” e.g., Appellant’s Br. 3. sonnel attorneys paralegal and one who worked on genuine dispute Because there is no that the appeal. did not J.A. 83-84. Nantkwest "personnel expenses" "attorneys' terms challenge expended the number of hours or interchangeable are fees” within the context pro-rata prof- of salaries share the USPTO appeal, "attorneys’ this we refer them as fered at district court. J.A. 138-40. throughout opinion. fees” Appeals Circuit, Federal Court of Cir- Fourth we have substantial cuit, remedy by against action have civil doubts provision that this implicates even Director United States Dis- Focarino, Rule. See Shammas v. trict District Eastern (4th 2015), F.3d Cir. cert. denied — Virginia.... All the pro- sub nom. Shammas v. Hirshfeld, ceedings paid by applicant. shall -, 194 L.Ed.2d 360 added). (2016) Id. (emphasis (concluding nearly that a identical statutory provision governing Trademark outset, At the we observe that we have (15 1071(b)(3)) appeals does not previously portions construed other “operate! against backdrop ] See, e.g., Hyatt, 625 F.3d at 1322. American Rule” provision because that Although Hyatt resolved a different issue made no to prevailing parties). reference here, than the we presented one based our recognition holding, part, on our of the In response government’s the argu expenses” provision breath of “all the and ments, Nantkwest relies Baker on Botts the appli- substantial financial burden that L.L.P. v. support ASARCO LLC to its initiating cants must 145 ap- bear position the American Rule applies peals. applicants Id. at 1337. “To deter litigant whenever a seeks to recover attor exactly type the procedural gam- — U.S.-, 2158, fees. Director, that concerns the 2164, 192 (2015).3 Botts, L.Ed.2d 208 Baker imposed applicant heavy on the eco- however, does not for a general stand paying nomic the expenses burden ‘[a]ll proposition that apply courts must proceedings’ regardless the out- specific American Rule’s explicit re (alteration original) (citing come.” Id. 35 quirements to all fee irrespective statutes 145). way, Put another of a prevailing party as Nantkwest con all applicants unconditionally intended that Rather, tends. it that a demonstrates stat seeking assume this financial burden when ute must these requirements meet before a directly in review district court—whether party may recover its fees attempt when win, they or lose. We thus concluded that ing to its ancillary extend reach to litiga provision drafted this without tion Congress never intended. See id. at degree requiring any of success on the Nevertheless, despite 2165. our doubts as (much prevailing party) merits less a as a to the applicability of the American Rule necessary shifting precedent here, analyze we 145’s “[a]ll “heavy appli- economic burden” onto the proceeding” provision assuming the cant. Id. Rule applies, we conclude that even Rule, under this at issue here A include the fees. USPTO’s determining Before whether 145 au- an thorizes award the USPTO’s attor- B neys’ fees, govern- first we address Rule, argument ment’s that the American Rule Under “the apply proceedings. prevailing ordinarily does not to these not litigant Like entitled case, related, performed although 3. the statute made no fees for work but adversarial, prevailing parties, Congress litigation. reference to Id. at fee-defense 2166. provision apply exclusively By applying proceeding drafted the fees this statute to a Con- instance, bankruptcy proceedings. gress contemplated to non-adversarial never first Nevertheless, effectively sought Id. at 2163-65. Baker Botts Baker Botts its fees in the provision altogether. used as a basis recover its absence of a fee statute summarily dismisses these attorneys’ fee from The dissent a reasonable to collect definitions, “they Serv. Co. are Alyeska Pipeline declaring loser.” 240, 247, Soc’y, Wilderness contemporaneous Congress’s with intro- (1975). L.Ed.2d 141 Courts S.Ct. into ‘expenses’ of the word duction to this uniformly recognize exception an Dissenting Op. Act in 1839.” Patent when general proposition, however: Century dictionar- Relying on Nineteenth “explic- “specific[ally]” and statute itself instead, the that “the ies dissent concludes it[ly]” award of authorizes ‘cost,’ ‘expense,’ ‘damage’ were words may to collect be entitled prevailing party synonymous around the time of considered In agree- Id. at Id. at 1363. Not the 1839 Amendments.”5 circuits, we conclude ment two other specifically Patent Act of 1836 so. The here includes these three terms. distinguished among Shammas, at 222-23 784 F.3d fees. See July Act of ch. Compare covers that the term (holding 117, § into (“Moneys received Stat. fees); United USPTO’s Treasury under this act shall constitute a Corp., Tenants States v. 110-118 Riverside payment fund for the of salaries (2d 1989) (observing Cir. 886 F.2d for, provided and clerks herein officers “expenses fees are expenses all other of the Patent Office.” of the Internal proceedings” under 6342 (“[W]hen- added)), § 14 (emphasis with id. Code).4 Revenue ever, any damages in action for for mak- thing or whereof ing, using, selling the by any right patent is secured exclusive and explanations The definitions ..., ..., verdict rendered it a shall be and treatises legal standard dictionaries power to of the court render shall support “expense” for the term any for above the amount judgment sum Feder- Wright Miller on this conclusion. & by actual found such verdict as the dam- Procedure, example, al and for Practice ..., exceeding not ages sustained three “includ[ing] term as all defines this thereof, according the amount to times actually litigant in expenditures by made (em- case, circumstances of the with costs.” action,” including “at- connection with the added)). The historical statute that phases et Wright Alan torney’s fees.” Charles not simply sup- relies on does the dissent al., Practice and Procedure Federal anything, conclusion. If port its statute 1998). (3d Similarly, ed. Black’s support majority’s position lends Dictionary defines as “ex- “expenses” Law characterizing the expressly salaries of time, labor, money, or re- penditure[s] of as officers and clerks and “ex- USPTO accomplish a result.” Black’s sources 2014) (10th Id. 9. The penses.” has Dictionary ed. Law added). (“Black’s”) the distinction between “ex- (emphasis observed party’s position purports dermines the it 4. The court in Riverside relied on "expenses language of this arguing section’s Specifically, advance. proceedings" provision when [foreclosure] fees, attorneys' include does not Nantkwest awarding Apartment Corporation its at- dictionary cited the same and definitions that ("The attorneys' id. torneys' fees. See now the dissent concludes bear no relevance selling ... for ... are in incurred the shares interpretation Appel- of this statute. See ' category the same of foreclosure (relying Br. 27-28 on the 2014 Black’s lee's proceedings....”). and sale term, Dictionary "ex- Law definition pense”). position only here not lacks The dissent's briefing, directly support un- but also recently, an providing “expenses” and “costs” the term penses” categorically excludes interpretation comports with the mod- disregards. the dissent

ern definitions that argues Nantkwest here that the term requisite lacks the specificity to Saipan, Kan Taniguchi Pacific the presumption overcome of the American Ltd., recognized the Court the distinction party pay Rule that each will its own fees; determining between costs and attorneys’ fees. Although Nantkwest does “expenses term “fees” includes borne deny supplies this term sufficient by litigants attorneys.” breath to cover the USPTO’s L.Ed.2d 903 fees, it contends that the American Rule (2012). There, distinguished the Court “ex demands more. In particular, argues term from the more limited penses” own, ‘expenses’ “[o]n its the term is ambig- “costs,” only which represent fraction Appellee’s uous.” Br. As support, Nant- expenses, relying specifically on the 1998 heavily kwest relies on fact that other Wright & Miller treatise cited above. federal statutes under various titles illus- Although everyday meaning costs has trate that employed synonymous expenses, concept term authorize of taxable costs ... is more limited.... fees either addition to (e.g., relatively Taxable costs are limited to fees), “expenses or as a minor, expenses[;] ... such incidental component “expenses them (e.g., in- fees, fees, court reporter items as clerk cluding attorneys’ words, In other fees).6 witnesses, ex- printing “expenses,” contends, the term Nantkwest exemplification copies, penses for can either include or exclude compensation docket of court- and, thus, on depending the statute appointed Taxable are experts.... costs is “far Appellee’s the term from clear.” Br. fraction expenses a of the nontaxable Reviewing the list of statutes that by litigants attorneys, experts, borne provides, however, Nantkwest we conclude consultants, investigators. and Congress that that made clear it meant to award fees under the broader (citations added) (emphasis at 2006 and Id. term within the context of omitted). pro- The quotation marks Court particular proceedings. these analysis in direct of its support vided above, holding ordinary that resolved the breadth of tax- As noted the meaning as in able costs under U.S.C. 1920. Id. at defined dictionaries the Supreme and Notably, interpretation neither the dissent Court’s of this term lend contrary authority significant weight nor Nantkwest to provide conclusion that the. Congress phrase that when Supreme where has held used the “all ex- remaining support approximately twenty provisions 6. Nantkwest such cites Nantkwest’s significant position is neither nor reliable statutory provisions covering range a wide proceedings. within the context of 145 Sim- including: bankruptcy, areas of law adminis- ilarly, provides own the dissent list of procedure, judicial proceedings, trative and statutes, federal more than half of which actu- management. Appellee's financial Br. 32-34. ally majority’s view support the as well. Dis- Some of these statutes list fees in Op. Notably, senting neither 1363-65. the dis- expenses addition to while others list attor- any sent nor Nantkwest regarding indication neys’ part expenses. Roughly fifty fees as any—of provi- which—if these cited support percent of those statutes cited do not Congress prior Supreme sions enacted Appellee’s they attor- view because treat "specif- "explicit” Court’s creation of the expenses. part that as Id. The fact ic” criteria under the American Rule. preme include conclusion the use of to Court’s that penses,” meant dissent and Nant- “litigation The fact that the the term costs” overcomes fees. compiled statutory provi- a list of kwest to a American Rule. While reference Congress on occasion em- for which sions party” may “usually” appear in “prevailing “expenses” to authorize ployed the term statutes, id., fee-shifting expenses fees in addition suggested never such a Court has that be sufficient to dis- other contexts cannot requirement shifting, reference is a for fee ordinary mean- lodge the reasonable contrary argues. to what the dissent See especially true ing of term. This Dissenting Op. (“Nothing 145] in [§ particular pro- context of this pre- the award of to a confines author- Congress explicitly vision where vailing party.”). compensation “[a]ll ized Congress law neither confines best, 145.At proceedings.” any particular phrase or use of term examples Congress these demonstrate satisfy American re- specificity Rule’s single to a or will not confine itself word requires em- quirement Congress nor referencing attorneys’ when phrase words, “fee,” ploy “compensation,” or view, narrow Yet under Nantkwest’s “attorney” to meet it. The term “ex- statute could not meet costs,” penses,” “litigation like is another heightened using Rule’s demands without example authorized fee where precise fees” or words including awards “fees” without the words equivalent. example, For when asked some “compensation” or Nant- the statute. during propose oral lan- argument other kwest the dissent too simply demand could have guage employed much. Rule, satisfy the American Nantkwest Our that this conclusion term authorizes compensation cited “reasonable of attor- im- particularly the USPTO’s fee award is neys” the only alternative.7 The dissent portant 145’s all here context view, stating restating shares this This provision. unique provision the statute cannot award requires applicants uniformly name employ because did these as defendant to their suits. In Director See, Dissenting words. e.g., Op. exact interests, (“Section representing the USPTO’s ‘attorneys’ neither mentions personnel on Director relies from the Of- congressional nor fees’ reflects intent n (“The them.”); fice of the Solicitor. 37 C.F.R. phrase authorize id. at 1361 See 11.40(b). Solicitor, attorneys—the ‘attorneys’ is not mentioned These [in fees’ 145]....”). deputy, his supporting associates—and fixed com- paralegals receive salaries as Court, hand, Supreme on the other government pensation for their As work. provided other suitable alternatives they indi- employees, salaried do not bill using any without of these words. In Baker work, they vidual for their do hours nor instance, recognized Botts for the Court those they repre- collect fees from whom term as “litigation costs” one such context, sent. In we this characterize example. Clearly, “litiga- at 2164. with more overhead associated their work phrase tion costs” not include does “expense” precisely govern- as an Yet the dissent offers fees.” Compare to justify little its conflict with the Su- ment than a “fee.” Black’s 698 12:42-13:17, "attorneys’ Argument http:// “rea- 7. Oral ence between fees” and the example oralarguments.cafc.uscourts.gov/mp3/2016- compensation attorneys” of sonable 1794.mp3. practical provided. perceive no differ- Nantkwest We as (defining “expense” “expenditure^ of other attorneys. Raney salaried v. Fed labor, time, money, Prisons, or resources to accom- eral Bureau for example, we of result”), (defining Black’s plish a awarded salaried attorneys union ap an “attorney’s charge “[t]he fee” as to client portionment their salaries because the client, such performed for services litigation required lawyers to divert fee, fee, hourly contingent an a flat or a as away their time pending other mat fee”). (Fed. Under the dissent and Nantkwest’s 2000). ters. F.3d Cir. view, must use Second, the word “fee” our sister circuits have recognized remu- instead for the USPTO receive the costs associated with these diversions neration. not view We do awarded to salaried employees as otherwise, narrowly. See, Shammas, Rule so To conclude e.g., well. 784 F.3d at 223 would interpretation our force (recognizing the USPTO “incurred ex position selecting into the untenable penses attorneys when its were required applied in an word must be unconven- to defend the Director in the district court imprecise tional and manner in context proceedings, engagement because their di these unique proceedings.8 verted PTO’s resources from other endeavors”); Indus., Wisconsin Hotline Given the Court’s construction (7th 2000) Inc., F.3d 365-66 Cir. guidance dictionary “expenses,” (holding government that salaried employ term, on provide treatises and the ees could recover they their relate it, applied context which we government’s opposition to an im conclude that the term includes case). proper removal of a state the USPTO’s fees under 145 proceedings similarly Section impact the USPTO’s resources. These costs are argu- Nantkwest makes additional here, particularly relevant where the USP- regarding ment whether the USPTO’s at- seventy percent TO attributes over of its torneys’ “expenses proceed- fees are of the ($78,592.50 total ings.” 145. It contends $111,696.39)to Nantkwest provision does a basis appeal filed its district court and en- would fees because USPTO joyed pro-applicant benefits of that pay portions had to full- have of these Hyatt, See forum. 625 F.3d 1336-37 employees’ salaries regardless time (obtaining ability de novo review with the Nantkwest’s suit. evidence). to introduce new Under Nant- First, view, disagree. government’s recovery

We we have accorded kwest’s past relief in the to certain only similar context would be limited ad hoc Congress's contrasting expenses” place use of the term "at- other broader torneys' "expenses,” already provides fees” under 35 U.S.C. 285 term includes which There, point. Relying premise, further this Con- flawed evidence to these fees. on a gress simply theory— chose not to award all dissent dismisses—even as a prevailing party, only attorneys’ but The could have intended a that broader distinction, appears ignore § compensation dissent this in- under to scheme 145 than requiring Congress indisputably stead that recite the has the 285. authori- phrase "attorneys' ty employ fees” to least a a over cover at to broad word other narrow- "expenses” simply may subset of because if it And these er alternatives so chooses. it do portions employ phrase. irrespective many other Title 35 of how times it amended so portions Dissenting Op. way, employed 1361-62. Put another other of Title 35 or nar- view, Congress rigid- under the must alternatives for sections of dissent’s rower other ly "attorneys’ employ phrase such a Code. travel, have re- e.g., expert wit- considered. Nantkwest’s printing, We expenses, costs, ignor- maining arguments appeal Br. in this but find while Appellee’s ness unpersuasive as well. majority them ing the vast proximate cause of incurred as USPTO Conclusion subscribe appeal. We cannot

Nantkwest’s view. to this reasons, reverse foregoing For we case for the district court and remand the credibly disputed that the It cannot be enter it to an additional award time and resources dedicated USPTO $78,592.50in favor of the Director. litiga- attorneys the defense of this to REMANDED REVERSED AND applied have it could otherwise tion when to other matters. Without those resources Stoll, Judge, dissenting. Circuit concerns, acknowledging these Nantkwest Rule, party the American “each Under the- essentially a rule that would endorses ordinarily shall its own in a lawsuit bear an award if the oretically permit USPTO attorney’s express fees unless there is to its in- outside counsel defend retained contrary.” statutory authorization to the on proceed not if it elected to terests but Eckerhart, Hensley v. “of the Logically, meaning its own. (1983). It 76 L.Ed.2d 40 type turn on cannot proceedings” a fee- strong presumption against erects attorneys govern- retained to defend the shifting, explicit requiring provision an As we ob- previously ment’s interests. a from American permitting departure served, equally regard we must salaried of congressional Rule or other evidence account time and into “tak[e] to an intent make such award available. devoting costs opportunity involved Section neither mentions attorney time to one case when it could be congressional fees” nor intent to reflects Raney, devoted others.” F.3d I authorize them. Because believe conclude 145 enti- 934-35.9We thus necessary congression- fails to compensation tles USPTO al directive to overcome the diversion of its resources the defense of against shifting attorneys’ Rule’s bar appeals. § 145 I respectfully dissent. ex Accordingly, we hold that “[a]ll I.

penses proceedings” majority expresses includes the share the attor pro-rata “substantial regarding fees the incurred to defend doubts” whether the American USPTO applies Maj. But applicant’s appeal. Op. To conclude otherwise Rule 145. 1355. recog clear Hyatt, precedent would conflict where we makes with starting nized the that the American Rule marks the “heavy economic burden” electing any analysis applicants point 145 shifts onto shifts fees path. Hyatt, litigant one to another. Often referred appellate favorable principle,” F.3d at as a “bedrock the American itself, agency). Although shouldering applicant-funded Without these ruling essentially may appropriate re- in the context of other Nantkwest seeks quires ap- agency proceedings, does applicants other its own not accord fund Act, requirement applicant peal. Leahy-Smith See that the must America Invents our itself 112-29, 10, 284, appeals. Hyatt, 625 Pub. L. No. Stat. 316 bear the burden of these 125 (2011) exclusively (recognizing at 1337. the USPTO as F.3d

1361 pay[] Am., requires litigant Carpenters Rule & “[e]ach Joiners 456 U.S. fees, lose, attorney’s his own win or unless 717, 722-23, 102 2112, S.Ct. 72 L.Ed.2d 511 provides statute or contract otherwise.” (1982). —LLC, v. Baker Botts L.L.P. ASARCO 2164, -, 2158,

U.S. S.Ct. 192 135 II. (2015) (quoting L.Ed.2d v. Reli 208 Hardt It against is this backdrop we ana- Co., 242, ance Standard Ins. 560 U.S. Life lyze Congress whether expressed an intent 253, 2149, 130 176 998 S.Ct. L.Ed.2d “to set this longstanding aside (2010)). against shift presumption This fee law,” Runyon, rule of 185-86, 427 U.S. at litigation in American dates back more 2586, 96 attorneys’ S.Ct. and award Wiseman, than years 200 to Arcambel v. 3 145. In order to shift the PTO’s (3 Dall.) 306, (1796). 1 U.S. L.Ed. 613 attorneys’ fees to case, NantKwest States, United for a “[T]he law the but we must find the text of 145 a “specif- well-recognized exceptions present few explicit” ic and authorization from Con- [here], always explicit has been that absent gress. Alyeska 421 Pipeline, See U.S. at authorization, congressional attorneys’ fees 260, express 95 S.Ct. 1612. Without au- are not a cost of litigation.” recoverable thority, ordinary meaning of “ex- 160, 185, Runyon McCrary, 427 96 U.S. penses” legislative history or 145’s (1976) (footnote 2586, S.Ct. 415 49 L.Ed.2d it. A omitted). provide searching review exposes no such authorization. remains draft While free to for the attor- providing statutes award of A. any such deviation from the language ex- The of 145 does not “specific explicit- American Rule must be plicit,” any has not ly grant authority “extended us to shift roving authority Judiciary to allow requires patent fees. 145 appli- Section counsel or fees as costs otherwise whenev- electing to challenge cant the PTO’s unfa- er might the courts deem them warrant- pay vorable decision district Alyeska ed.” Serv. Co. v. Pipeline Wilder- .proceedings.” “[a]ll the of the 35 240, 260-62, Soc’y, ness 421 S.Ct. U.S. 95 added). (emphasis § 145 (1975) 1612, (citing 44 141 L.Ed.2d statuto- “attorneys’ mentioned, phrase fees” is not ry provisions containing phrase “attor- Congress’s use of is not ney’s examples fees” “specific “specific type explicit” language explicit of at- provisions allowance permits the award of fees”). torneys’ recog- Several cases have 722, Valley, See Summit 456 U.S. nized that a failure to statute’s reference (noting S.Ct. statute does not “attorneys’ always is not dispositive, fees” fees); expressly mention Key but the statute must “otherwise evinee[] Tronic, 814-15, U.S. at S.Ct. 1960 See, an intent for such fees.” (same); D. Rich F. Co. v. U.S. the Use States, e.g., Key Corp. v. Tronic United 116, Co., Indus. Lumber S.Ct. (1974) 40 L.Ed.2d 703 (1994). re- L.Ed.2d 797 This necessitates (same). ordinary sort to meaning phrase of the case, omission shift alleged fees and particularly telling. fees” 145 is history legislative pro- When wanted to make vision to see if such an intent exists. Id. at litigation, 817-19, 1960; patent in a Valley available knew Summit Indus. Inc. v. Bhd. how to so. Section the America Local United do 285 of of the American Congress’s knowledge provides: “The Act, example, Invents argu may award rea- force to this cases Rule lends even more exceptional par- 1973, prevailing Congress to the attorney early At least as sonable ment. fees added). (emphasis § 285 ty.” study attorneys’ 35 U.S.C. formed subcommittees Patent Act other sections Several ser affecting legal fees and other issues 285, those § and each of cross-reference Co., at 131 F. D. Rich 417 U.S. vices. See availability of “at- recognizes sections n.20, 2157. And when warrant & 94 S.Ct. See, e.g., § id. under 285. torney fees” ed, to over Congress has drafted statutes 273(f). 271(e)(4); Similarly, § Section § Hensley, 461 American Rule. See come the who has a customer permits the ALA 429, (stating that S.Ct. 1933 U.S. at promoter by an invention defrauded been Attorney’s Rights enacted Civil Congress attorneys’ costs and “reasonable to recover response of 1976 in Fees Awards Act damages in- to other in addition fees,” explicit authori provide American Rule to 297(b)(1) § Id. by the customer. curred fees). attorneys’ As shifting zation for added). (emphasis Attorney’s Fees Rights the Civil did with statutory principle of 1976, a fundamental It is could have Awards Act of that, Congress in- interpretation “[w]here expressly provide § 145 to revised in one section of language particular cludes Congress, howev award of it in another section but omits a statute er, Congress’s defer to did not. We should Act, generally presumed it is the same Servs., v. FBL Fin. decision. See Gross intentionally pur- acts Inc., 167, 174, 129 557 U.S. inclusion or exclu- disparate posely (2009) (“When Congress L.Ed.2d States, 464 U.S. Russello v. United sion.” statutory provision but not amends one (1983) 78 L.Ed.2d another, in presumed it is to have acted Bo, Wong Kim States v. (quoting United tentionally.”). 1972)). (5th Con- Cir. 472 F.2d “attorney fees” decided to exclude gress B. type § exact § 145 but not 285—the explicit § specific 145 lacks Because ordinarily pre- exclusion we disparate statutory authority to shift intentional.1 The omission sume to be glean congressional able to we must be sug- § “strongly from 145 attorneys’ fees ordinary meaning to do so from the intent author- decision not to gests] a deliberate legislative history of or the Tronic, 511 at Key ize such awards.” majority § concludes 818-19, It reveals Con- 114 S.Ct. 1960. ordinary meaning necessari- among pick and choose gress’s intent “to disagree. ly includes fees.21 allow fees its statutes and to statutory a fundamental canon of It is some, Alyeska others.” but not “ that, de- otherwise ‘[u]nless 95 S.Ct. 1612. construction Pipeline, tions); (permitting 277d-21 Com- expressly awarded See, attorneys' many contexts. fees in other missioner to "allow reasonable (“The exception- 2000e-16c(e) court in e.g., fees”); (stating 7 U.S.C. 2565 "at- 42 U.S.C. attorney may award reasonable court”); al cases torney's may allowed prevailing party.”); 10 U.S.C. 41305(e) ("[T]he party prevailing 46 U.S.C. 1089(f)(2)(recognizing provides that statute fees.”). attorney may reasonable be awarded authority attor- for reasonable "the 1117(a) fees”); (permitting ney’s 15 U.S.C. rely legislative majority on the 2. The does attorney fees to award of "reasonable history support position. party” trade-mark viola- prevailing for certain

1363 fined, interpreted taking be majority agrees words will as that the word “costs” can- their ordinary, contemporary, common not displace the American Rule. Maj. See meaning’ at the time enacted the Op. 1356-57. There no can be doubt that statute.” Amoco Prod. Co. v. S. Indian Ute ordinary the meaning of at the Tribe, 873-74,119 526 U.S. time of its inclusion in the Patent Act falls (1999) 144 22 (quoting L.Ed.2d Perrin short overcoming of the American Rule. States, 37, 42, United rely That the PTO did not on this provi- (1979)). 311, 62 199 the Di- L.Ed.2d As attorneys’ sion to seek fees over 170 brief, Congress rector in her points out years supports understanding the that it is require Act in amended the Patent 1839 to far from clear expenses whether the “[a]ll that of expenses “the whole the of proceedings” attorneys’ includes paid be proceeding by shall the applicant, fees. whether the final decision shall his Congress’s frequent of “expenses” use 3, 1839, favor or Act of Mar. otherwise.” and statutory fees” in other 353, 354; § ch. 5 Br. Appellant Stat. provisions further reinforces “[a]ll 1830s, 21. In the of “ex- definition expenses proceedings” does not of “cost,” pense” included and the definition necessarily attorneys’ include fees. The “expense.” of “cost” included J.E. Worces- U.S. is replete examples Code with of ter, Pronouncing Explanatory A and Dic- Congress awarding “expenses” and then tionary English Pro- Language of separately clarifying fees nouncing Vocabularies Classical and of See, e.g., are 11 also available. U.S.C. (1830); Scripture Names Proper 117 363(n) § (authorizing trustee to recover al., see also Noah et An Ameri- Webster costs, “any or expenses Dictionary English Language can of situations); incurred” certain 12 U.S.C. 1830) (list- ed., (Joseph 319 Emerson 1464(d)(l)(B)(vii) (“[C]ourt § may ... al- “expense” definition for and as “cost” any low such party expenses reasonable versa). Moreover, vice “ex- the words attorneys’ fees.”); and 12 U.S.C. 1786(p) pense,” “cost,” “damage” and consid- were (“Any having jurisdiction any of pro- synonymous ered around the of time ceedings instituted section ... Roget, 1839 Amendments. Peter Mark may any party allow such such reason- English Thesaurus Words and Phrases of expenses able and (Barnas 1856). ed., Sears just proper....”); deems 12 U.S.C. suggest that, These at definitions 5005(b)(2)(B) that, (providing absence time Congress introduced the “ex- word warranty, breach amount indemni- Act, penses” ordinary into Patent ty be sum and expenses shall of “interest meaning include fees. did not (including costs and attorney’s reasonable twice held representa- fees and other synonym the word “ex- “damages”—a 1401(a) tion)”); (discussing U.S.C. penses” at time of insuf- enactment—is “payment attorney litigation ficient to override the American See Rule. 6673(a)(2)(A) (al- expenses”); 26 U.S.C. 722-23, Valley, Summit U.S. at costs, lowing recovery of expenses, “excess (“Ordinarily right S.Ct. 2112 attorney against fees” who ‘damages’ implicit does include an au- vexatiously multiplied proceedings); 15 attorney’s thorization to award In- “[tjotal 77z-l(a)(6) (discussing U.S.C. at- deed, presumes the American Rule torneys’ fees expenses” can be ‘damages’ damages word means exclu- (“The court); added)); Arcambel, sive awarded (emphasis offees.” (3 Dali.) any may party 306. And committee reim- even allow “reasonable party accounts of recover applicable (permitting bursement Representatives including of his rea- incurred a reason- House ... fee”). the contested election attorney’s sonable able attorneys case, including reasonable did not message is clear: 2409(c)(1)(C) (per- § U.S.C. fees...10 proceed- expenses of the “[a]ll view require that con- mitting agency head to necessarily “attorneys’ ings” including ag- equal “an to the pay tractor amount If included fees.” expenses amount of all costs and gregate fees,” would no reason for Con- there expert and wit- (including fees availability of attor- specify to gress fees)” complaint in connection with nesses’ already fees statutes that 15 U.S.C. reprisal); a regarding Instead, expenses. the award of 2310(d)(2) recovery of sum (permitting § and implication is that logical cost amount of “equal aggregate to things and “attorneys’ fees” mean different attorneys’ fees expenses (including and necessarily include expenses do not 28 expended)”); actual based on time best, At refer- Congress’s fees. 1447(c) (“An remanding § order U.S.C. expenses” ambiguous. to “[a]ll ence just may require payment the case clear, such, Congress’s intent is not As including any expenses, costs and actual statutory language does not overcome fees, attorney incurred as a result Rule. the American (“[T]he removal.”); 1370(e)(1) § 29 U.S.C. statutes Although has enacted all or a may in its discretion award court attorneys’ fees government incurred award the expenses of the costs portion action, including action, circum- in connection such in a district court in each ”); 30 attorney’s reasonable fees.... stance, at- Congress explicitly referred to 938(c) miner (allowing § successful U.S.C. fees, intent torneys’ making fee-shifting aggregate “a sum equal to recover to abundantly example, clear. For the con- (includ- amount of all costs and agency action for text of enforcement fees)”); attorney’s 31 U.S.C. ing the 42 of a civil U.S.C. penalty, assessment 3730(d)(1) (“Any § shall also person such 7413(a)(5)(B)provides “[a]ny person an amount for reasonable receive pay timely to on a civil who fails a basis neces- the court to have been which finds ordered or penalty assessed incurred, sarily plus reasonable required ... pay section shall be 1367(c) (“[A] costs.”); 33 fees U.S.C. in- expenses, United States enforcement of all equal aggregate to the amount sum attorneys fees.” cluding but not limited to attor- expenses (including costs and Likewise, pro- § 1319(g)(9)(B) 33 U.S.C. fees) ”); ney’s ... shall 38 be assessed.... “[a]ny person pay fails to vides that who 4323(h)(2) (“[T]he may U.S.C. timely an assess- on a basis amount of person any prevails award such who penalty a civil ... shall be re- ment of at- proceeding action or reasonable such attorneys ... quired pay agency] [the fees, torney expert and other witness costs for proceedings.” fees and collection litigation expenses.”); 41 U.S.C. statutes, Congress’s alleged Unlike these 4705(d)(1)(C) agen- (noting that head of gov- intent to award “[ojrder pay cy may contractor §in is not so clear. ernment actions ag- complainant equal an amount Finally, fee-shifting if stat were a gregate amount all costs and ute, un represent particularly it would (including attorneys’ expert wit- fees) Rule divergence from the American usual complainant nesses’ that the reason- 247d-6d(e)(9) incurred”); obligates plain even successful ably because lawsuit,” pay the PTO’s tiffs as this could dispro- have a portionate chosen to depart effect in discouraging “[W]hen less statute, by wealthy the American rule virtual individuals “from instituting ac- tions to every rights one of than 150 vindicate their if ly existing penalty the more losing the fees fee-shifting provisions predicates federal included of their oppo- nents’ counsel.” awards on some the claim Fleischmann Distilling fee success Corp. Co., Club, Brewing 714, Maier ant.” 386 U.S. Ruckelshaus v. Sierra (1967); L.Ed.2d 77 L.Ed.2d 938 see (1983); Valley, also Summit Botts, U.S. at see also Baker 135 S.Ct. at (“[C]onsiderations 102 S.Ct. 2112 [favoring 2164 (recognizing deviations from Ameri application of the American Rule] include can Rule “tend to the authorize award of ‘a possible the effect deterrent that fee fee,’ ‘fees,’ shift- attorney’s reasonable or ‘litiga litigants would have on poor with meri- costs,’ refer usually ‘prevailing tion to a claims.”). torious Independent advocacy p arty of an context adversarial threatened, could also be the ‘action.’”). § Nothing in 145 confines the warned, “by having the earnings of prevailing party. to a award attorney the pen flow from the of the Instead, applicant it requires pay the judge argues.” before whom F. D. he Rich the the proceedings,” “[a]ll Co., 417 U.S. at Finally, 2157. according majority which to the means the “expenses” every if word in statute or applicant pays attorneys’ for the PTO’s trumped Rule, contract the American then in every § 145 In proceeding. fees these time, “the expense, and difficulties of proof circumstances, I think atypical Congress’s inherent in litigating question of what intent award the PTO fees in attorney’s constitutes reasonable fees every case been should have more clear. I pose would judicial substantial burdens for agree used the cannot word Fleischmann, administration.” an “expenses” to effect unusual such de 718, 87 S.Ct. 1404. from parture depar the American Rule—a Here, prevailing majority’s interpretation ture that would ap saddle even would compel any prospective patentee plicants with the PTO’s fees.3 who avails herself of review afforded C. by § pay 145 to the PTO’s fees The maintenance robust of a applicant prevails even if the proves in public policy. Rule also finds support error high the PTO.4 These and uncer- uncertainty example, For is inherent in tain likely applicants, costs will deter par- any litigation, ticularly should not pe- “one solo inventors and other smaller entities, defending or merely prosecut- pursuing nalized review under majority repeatedly options judicial 4. 3. The mischaracterizes The AIA offers two re- rigid advocating require- dissent as for a rejecting patent view aof Board decision award ment would bar the application. appeal applicant The can unless invoked those exact § Federal Circuit under 141 or it can file a 1358, 1358-59, Maj. Op. words. See 1359 n.8. Virginia civil action in the Eastern District of My opinion only is This incorrect. addresses against § the PTO the Director of under specific whether word is Kappos Hyatt, See v. explicit Congress to directive from shift (2012). Seeking 182 L.Ed.2d attorneys’ fees or whether 145 otherwise review under certain 145 offers benefits to signals Congress's intent to make an award of including applicant, ability to conduct express opinion I no available. discovery and introduce additional evidence. carry enough weight to what other words displace Rule. See id. the American at 1700-01. (4th 2015), proceeding would 219 Cir. and the Second Cir- every And opinion cuit’s United States v. 110-118 over whether the PTO’s litigation involve (2d reasonable, Corp., Riverside Tenants 886 F.2d 514 creating attorneys’ fees were 1989) easily distinguished.5 Cir. is for the district court. additional burden intended convinced I am not interpreting a section of the Lanham an outcome. such requiring party bringing Act the case pay proceed- “all the III. 1071(b)(3), ing,” 15 the Shammas arguments to the con- majority’s The majority6 found the American Rule did me to conclude oth- trary persuade do not Shammas, Only at 223. apply. 784 F.3d majority heavily relies on our erwise. dispatching strong presump- after Hyatt Kappos, 625 F.3d statement against shifting tion fee embodied 2010) (Fed. plaintiffs Cir. rule majority American Rule—a that the heavy “the 145 bear proceed who applicable—was here assumes the ex- paying ‘[a]ll burden economic interpret Shammas court able to the ordi- proceedings’ regardless penses nary meaning cover attor- Maj. Op. 1360. This obser- outcome.” Simply reaching fees. Id. at 224. vation, however, require does not that ex- however, result, same does not make the Indeed, include fees. the penses majority’s opinion consistent with Sham- traditionally interpreted this stat- PTO has particularly mas. This is so here because expert to include utory language opinions conflicting the two offer views on fees, deposition travel ex- reporter applicability the of the foundational com- of printing expenses—all and penses, mon in principle law embodied the Ameri- significant pose “heavy a can be which Rule. can in litiga- burden” district court economic The Circuit’s decision in Second 110-118 tion. inapposite Riverside is because it does not majority holding also claims that its The in interpretation “expenses” address the of opinions Instead, consistent with from the Sec- is statutory provision. a contract or and Fourth Circuits that have inter- apartment ond 110-118 Riverside dealt with “expenses” to include in preted corporation expenses that incurred fore- adopted by But the rationale the closing government placed fees. a lien that the diverges from majority apartment corporation’s that of the Fourth on one of the ten- Focarino, government responsibility in Shammas v. 784 F.3d ants. The bore Circuit addition, majority holding the 5. cites to dicta in was consistent with the "narrow Ltd., Taniguchi Saipan, costs,” Kan scope of taxable which it character- Pacific 182 L.Ed.2d 903 expenses. ized as a fraction of the nontaxable (2012) as evidence that the interpreted statutory Id. at 2006. It never a interpretation “expenses.” has blessed its of provision containing "expenses” the word Court, by question pre- As described the include fees. Taniguchi sented in phrase was whether the "compensation interpreters” includes the view, Judge King 6. dissented. In his translating cost of written The documents. analysis, American Rule controls the and at- question concluding Court answered torneys’ fees should not be shifted because the that "both the ordinary and technical mean- statutory provision at issue "makes no refer- ings 'interpreter,' statutory as well as the attorney’s ence to fees awards and does not found, in context which the word is lead to Congressional reflect intention to authorize 1920(6) apply the conclusion that does not Shammas, 784 F.3d at 227 such awards.” Id. at translators of written materials.” J., Only explain (King, dissenting). did that its then the Court lien, apart- tax foreclosing awarding for but the when fees. Maj. See statutes, foreclo- corporation Op. my view, ment effectuated the These com- conclusion, sure and shouldered associat- pel opposite especially ed Because was the proceeding. with the it when in light read Rule. lien, duty government’s to foreclose the tax above, As explained there would be no govern- why the court found no reason for Congress reason for the apartment ment should not reimburse the award of fees” numerous corporation of the foreclo- provisions permits where also including sure proceeding, attorneys’ fees. the award of if the contempora- Riverside, 110-118 As 886 F.2d at 520. neous, ordinary, and well-known meaning demonstrate, these facts 110-118Riverside necessarily included attor- private party performed is a case where a neys’ Rather, fees. in the context of legal obligations government ambiguous the term efforts; it and was made whole for its does clear shows no intent to award attorneys’ interpretation not involve the of a statute litigation the context of adversarial IV. Congress specifically determine whether recovery explicitly provided starting The American Rule is the point by one party against analysis, for our it imposes high bar use of “ex- other based on its the word litigant any seeking to shift its attor- penses.” party. to the opposing Despite Next, majority dictionary assuming relies on the American applicability Rule’s ordinary case, definitions to illuminate the majority believes meaning majority’s dic- “expenses.” provides requisite authorization. But tionaries, however, and are from 1998 the specific explicit provi- 145 lacks 2014—they contemporaneous are not sion for allowance of Congress’s introduction of the word “ex- ordinary meaning of “expenses” penses” into Patent Act in There- fails to fill the void. I respectfully dissent. fore, they light ordinary shed no on the

meaning of more than 175 Co.,

years ago. See Amoco Prod. (“ 873-74,

at oth- 119 S.Ct. ‘[UJnless defined, interpreted erwise words will be The BOARD OF TRUSTEES OF the taking ordinary, contemporary, their LELAND STANFORD JUNIOR UNI meaning’ common at the time VERSITY, Plaintiff-Appellant (alteration original) enacted the statute.” added) Perrin, 444 (emphasis (quoting 311)). And unlike The CHINESE OF UNIVERSITY Miller,' Wright

1998 definition from KONG, HONG Defendant- do not contemporaneous definitions Appellee “attorneys’ mention fees.” See Section 2015-2011 II.B, supra. Appeals, States United Court of Finally, majority posits lita- that the Federal Circuit. ny speci- of statutory provisions separately 27, 2017 Decided: June fying both Congress’s fees” demonstrates desire single phrase

to be restricted to word or

Case Details

Case Name: Nantkwest, Inc. v. Matal

Court Name: Court of Appeals for the Federal Circuit

Date Published: Jun 23, 2017

Citation: 860 F.3d 1352

Docket Number: 2016-1794

Court Abbreviation: Fed. Cir.