Peter v. NantKwest, Inc.
The Supreme Court ruled unanimously that the Patent and Trademark Office cannot make patent applicants who sue it and lose pay the salaries of the government's own lawyers and paralegals.
The decision rests on the long-standing rule that each side normally pays its own lawyers unless Congress says otherwise clearly, and the Court found no such clear statement in the patent law provision at issue.
How it got here: A district court and the Federal Circuit ruled against the PTO's request for attorney's fees; the PTO asked the Supreme Court to review the case.
The Case in Depth
What happened
A biotechnology company, NantKwest, Inc., had a patent application for a cancer treatment method denied by the Patent and Trademark Office. Instead of appealing directly to the Federal Circuit, NantKwest used a different legal path: filing a new civil lawsuit against the PTO in federal district court, where it could present new evidence. It lost that lawsuit too.
The question before the Court
When a patent applicant sues the Patent Office in federal court and loses, must they pay the salaries of the government's lawyers who worked on the case?
Why it matters
Patent applicants who challenge a denied patent by filing a new lawsuit against the Patent Office will still have to cover routine litigation costs like expert witnesses and printing, but they won't be on the hook for the government's own attorneys' and paralegals' salaries — keeping this specialized route to court from becoming financially riskier than intended.
What changes now
This is a final merits decision resolving the fee dispute; there is no remand needed since the Federal Circuit's judgment against the PTO's fee request is affirmed. Going forward, the Patent and Trademark Office cannot seek reimbursement of its attorneys' and paralegals' salaries from applicants who sue and lose under this provision, though other litigation expenses remain recoverable.
How the Court got there
The legal reasoning, step by step
- The Court started from the American Rule, a longstanding background principle that each side in litigation pays its own lawyers unless a statute clearly says otherwise, and treated that as the default starting point for interpreting the fee-related statute here.
- The Court rejected the government's argument that this presumption only applies to statutes that award fees to the 'winning' side, noting it has applied the same presumption to statutes that require payment regardless of who wins.
- Turning to the statute's text, the Court found that the word 'expenses' by itself is broad enough to theoretically include attorney's fees, but that broad, non-specific wording is not the kind of clear, explicit statement needed to overcome the American Rule.
- The Court compared how other federal statutes list 'attorney's fees' separately from 'expenses,' concluding that Congress treats the two as distinct categories, and it noted that the modifier 'all' before 'expenses' does not expand the term to reach something it wouldn't otherwise include.
- The Court also looked at the history of the patent statute, finding that the Patent Office had never before sought to recover its lawyers' salaries under this provision and that Congress has used explicit language elsewhere in patent law when it wanted to allow attorney's fee awards.
- Because the statute lacked the clear, explicit language required to depart from the American Rule, the Court concluded the fee-shifting the government sought was not authorized.
Doctrinal impact
Cases affected by this decision
Reaffirms Sebelius v. Cloer (569 U. S. 369)
Confirms the American Rule presumption applies even to fee statutes that don't require winning to get fees.