PETER, DEPUTY DIRECTOR, PATENT AND TRADEMARK OFFICE v. NANTKWEST, INC.
No. 18–801
Supreme Court of the United States
Argued October 7, 2019—Decided December 11, 2019
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
PETER, DEPUTY DIRECTOR, PATENT AND TRADEMARK OFFICE v. NANTKWEST, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
No. 18–801. Argued October 7, 2019—Decided December 11, 2019
The Patent Act provides two mutually exclusive methods for challenging an adverse decision by the Patent and Trademark Office (PTO). A dissatisfied applicant may appeal directly to the Federal Circuit,
Respondent NantKwest, Inc., filed a
Held: The PTO cannot recover the salaries of its legal personnel under
(a) The “American Rule”—the bedrock principle that “[e]ach litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise,” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 253—provides the starting point for assessing whether
(b) Section
In common statutory usage, the term “expenses” alone has never been considered to authorize an award of attorney’s fees with sufficient clarity to overcome the American Rule presumption. The appearance of “expenses” and “attorney’s fees” together across various statutes indicates that Congress understands the terms to be distinct and not inclusive of each other. See, e.g.,
The Patent Act’s history reinforces that Congress did not intend to shift attorney’s fees in
898 F. 3d 1177, affirmed.
SOTOMAYOR, J., delivered the opinion for a unanimous Court.
LAURA PETER, DEPUTY DIRECTOR, PATENT AND TRADEMARK OFFICE, PETITIONER v. NANTKWEST, INC.
No. 18–801
Supreme Court of the United States
December 11, 2019
589 U. S. ____ (2019)
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 18–801
LAURA PETER, DEPUTY DIRECTOR, PATENT AND TRADEMARK OFFICE, PETITIONER v. NANTKWEST, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
[December 11, 2019]
JUSTICE SOTOMAYOR delivered the opinion of the Court.
Section
I
A
The Patent Act creates two mutually exclusive pathways to challenge an adverse decision by the PTO. The first permits judicial review by direct appeal to the United States Court of Appeals for the Federal Circuit.
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before the [agency].” Kappos v. Hyatt, 566 U. S. 431, 434 (2012);
The second pathway allows applicants to file a new civil action against the Director of the PTO in federal district court.
Because
B
After the PTO denied respondent NantKwest, Inc.’s patent application directed to a method for treating cancer, NantKwest filed a complaint against the PTO Director in the Eastern District of Virginia under
The District Court denied the PTO’s motion to recover its pro rata legal fees as “expenses” of the
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Rule”—the background principle that parties are responsible for their own attorney’s fees. NantKwest, Inc. v. Lee, 162 F. Supp. 3d 540, 542 (ED Va. 2016). A divided Federal Circuit panel reversed, with Judge Stoll dissenting. NantKwest, Inc. v. Matal, 860 F. 3d 1352 (2017). The majority expressed “substantial doub[t]” that
The en banc Federal Circuit voted sua sponte to rehear the case and reversed the panel over a dissent. NantKwest, Inc. v. Iancu, 898 F. 3d 1177, 1184 (2018). The majority opinion—now authored by Judge Stoll—held that the American Rule presumption applied to
II
This Court’s “‘basic point of reference’ when considering the award of attorney’s fees is the bedrock principle known
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as the ‘“American Rule”’: Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 252–253 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U. S. 680, 683 (1983)). The American Rule has “roots in our common law reaching back to at least the 18th century.” Baker Botts, 576 U. S., at ___ (slip op., at 3) (citing Arcambel v. Wiseman, 3 Dall. 306 (1796)); see also Summit Valley Industries, Inc. v. Carpenters, 456 U. S. 717, 721 (1982) (observing that the American Rule “has been consistently followed for almost 200 years”); Alyeska Pipeline, 421 U. S., at 257 (referring to the presumption against shifting attorney’s fees as a “general” rule).
The Government does not dispute this principle or its pedigree, but argues instead that it does not apply at all. Because the American Rule presumption is most often overcome when a statute awards fees to a “prevailing party,” the Government maintains, the presumption applies only to prevailing-party statutes. And because
That view is incorrect. This Court has never suggested that any statute is exempt from the presumption against fee shifting. Nor has it limited its American Rule inquiries to prevailing-party statutes. Indeed, the Court has developed a “line of precedents” “addressing statutory deviations from the American Rule that do not limit attorney’s fees awards to the ‘prevailing party.’” Hardt, 560 U. S., at 254; see also Baker Botts, 576 U. S., at ___–___ (slip op., at 5–7) (analyzing a bankruptcy provision that did not mention prevailing parties under the American Rule’s presumption against fee shifting).
Sebelius v. Cloer, 569 U. S. 369 (2013), confirms that the presumption against fee shifting applies to all statutes—even those like
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a provision of the National Childhood Vaccine Injury Act that permitted courts to “award attorney’s fees . . . ‘incurred [by a claimant] in any proceeding on’ an unsuccessful vaccine-injury ‘petition . . . brought in good faith [with] a reasonable basis for the claim.’” 569 U. S., at 371 (quoting
Cloer establishes two points: First, contrary to the Government’s suggestion, Congress has indeed enacted fee-shifting statutes that apply to nonprevailing parties. Second, and again contrary to the Government’s view, the American Rule applies to such statutes. The Government itself argued in Cloer that the presumption against fee shifting applied by default, but maintained that the statute “depart[ed] so far from background principles about who pays a litigant’s attorney’s fees that it [could not] be justified without a clearer statement than the Act can supply.’” Brief for Petitioner in Sebelius v. Cloer, O. T. 2012, No. 12–236, p. 32. The Court acknowledged the Government’s position but concluded that the “rul[e] of thumb” against fee shifting gave way because the “words of [the] statute [were] unambiguous.” Cloer, 569 U. S., at 380–381 (citing the Government’s brief).
The dissenting en banc Federal Circuit Judges also doubted that the American Rule could apply to a
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particularly important because
The American Rule thus provides the starting point for assessing whether
III
To determine whether Congress intended to depart from the American Rule presumption, the Court first “look[s] to the language of the section” at issue. Hardt, 560 U. S., at 254 (internal quotation marks omitted). While “[t]he absence of [a] specific reference to attorney’s fees is not dispositive,” Key Tronic Corp. v. United States, 511 U. S. 809, 815 (1994), Congress must provide a sufficiently “specific and explicit” indication of its intent to overcome the American Rule’s presumption against fee shifting. Alyeska Pipeline, 421 U. S., at 260.
A
The reference to “expenses” in
Definitions of “expenses” provide scant guidance. The term, standing alone, encompasses wide-ranging “expenditure[s] of money, time, labor, or resources to accomplish a result,” Black’s Law Dictionary 698 (10th ed. 2014), “charges or costs met with in . . . doing one’s work,” Webster’s New World College Dictionary 511 (5th ed. 2014), and “outlay[s]” for labor, Merriam-Webster’s Dictionary of Law 180 (1996); see also N. Webster, An American Dictionary of the English Language 319 (3d ed. 1830) (defining the term
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broadly to include “the employment and consumption, as of time or labor,” or the “disbursing of money”). Though these definitions are capacious enough to include attorney’s fees, the mere failure to foreclose a fee award “neither specifically nor explicitly authorizes courts to shift [fees].” Baker Botts, 576 U. S., at ___ (slip op., at 6).
Reading the term “expenses” alongside neighboring words in the statute, however, supports a conclusion excluding legal fees from the scope of
Finally, the modifier “all” does not expand
Section
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B
“The record of statutory usage” also illustrates how the term “expenses” alone does not authorize recovery of attorney’s fees. See West Virginia Univ. Hospitals, Inc. v. Casey, 499 U. S. 83, 88 (1991) (looking to statutory usage to determine whether attorney’s fees and expert fees were distinct expenses in the fee-shifting context).
That “expenses” and “attorney’s fees” appear in tandem across various statutes shifting litigation costs indicates that Congress understands the two terms to be distinct and not inclusive of each other. See, e.g., 898 F. 3d, at 1188 (quoting
While some other statutes refer to attorney’s fees as a subset of expenses, they show only that “expenses” can include attorney’s fees when so defined. See, e.g.,
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fees”);
The Government cites several decisions to argue how, on occasion, this Court has used the term “expenses” to mean “attorney’s fees.” None of the cases furthers its position. See, e.g., Rimini Street, 586 U. S., at ___, ___ (slip op., at 4, 11) (reasoning that the term “costs” in the general federal costs statutes does not include attorney’s fees); Taniguchi v. Kan Pacific Saipan, Ltd., 566 U. S. 560, 573 (2012) (mentioning that a party may bear “expenses” related to attorneys, without specifying whether these “expenses” include attorney’s fees); Arlington Central School Dist. Bd. of Ed. v. Murphy, 548 U. S. 291, 297–303 (2006) (distinguishing “attorney’s fees” from “costs” and “costs” from “expenses,” without indicating whether “expenses” encompasses attorney’s fees); Casey, 499 U. S., at 99 (suggesting that an explicit reference to “expert witness fees” or “litigation expenses” could shift expert fees in addition to attorney’s fees—not that the term “litigation expenses” alone could shift attorney’s fees).
Simply put, in common statutory usage, the term “expenses” alone has never been considered to authorize an award of attorney’s fees with sufficient clarity to overcome the American Rule presumption.
C
In fact, the Patent Act’s history reinforces that Congress did not intend to shift fees in
There is no evidence that the Patent Office, the PTO’s predecessor, originally paid its personnel from sums collected from adverse parties in litigation, or that the Office initially even employed attorneys. See Act of July 4, 1836, §9, 5 Stat. 121 (“[T]he moneys received into the Treasury under this act shall constitute a fund for the payment of the salaries of the officers and clerks herein provided for, and
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all other expenses of the Patent Office, and to be called the patent fund”). That salaries of PTO employees might have qualified as an “expense” of the agency, however, does not mean that they are an “expense” of a
In later years, when Congress intended to provide for attorney’s fees in the Patent Act, it stated so explicitly. See, e.g.,
The history of the Patent Act thus reaffirms the Court’s view that the statute does not specifically or explicitly authorize the PTO to recoup its lawyers’ or paralegals’ pro rata salaries in
* * *
For the foregoing reasons, we conclude that the PTO cannot recover the pro rata salaries of its legal personnel under
It is so ordered.