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Applicants Pay the Patent Office’s Attorneys Even When Patent Office Loses Case


By
Smith & Hopen PA

Under 35 U.S.C. § 2, the U.S. Patent and Trademark Office (USPTO) is responsible for granting and issuing patent rights to inventors. Section 101 clarifies that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. Thus, an inventor must file a patent application with the USPTO where a patent examiner determines whether the inventor is entitled to a patent. But what happens if the patent examiner gets it wrong?

First, the applicant can attempt to convince the examiner that the examiner is wrong. Obviously, that doesn’t always work out because examiners are humans and thus fail to maintain a perfectly objective viewpoint. Plus, we all make mistakes. It is a simple fact that there will be times when a patent examiner simply comes to the wrong conclusion.

During these times, the applicant can request the Patent Trial and Appeal Board (PTAB) to review the application and the examiner’s decision. Without getting into the cloud of contention surrounding the PTAB, let’s assume that the PTAB also comes to the wrong conclusion. Now, the applicant must take his/her case to the Courts.

Now let’s assume that the applicant successfully convinces the Court that he/she is entitled to patent rights. Finally, a win, but at what costs? Let’s remove the costs to file the application from the equation, as those fees were expected and would have occurred if the application was initially allowed. The costs to get to this point include the legal fees expended responding to the examiner each time the examiner rejects the application, the costs associated with the PTAB review, the applicant’s attorney’s fees and court costs for the court case, and finally the USPTO’s attorney’s fees. No that is not a typo, the applicant must pay for the USPTO’s attorney’s fees even though the applicant won the case. See Nantkwest, Inc. v. Matal, No. 2016-1794 (Fed. Cir. June 23, 2017). In Nantkwest, Inc. v. Matal, the Court required the prevailing applicant to pay the USPTO $78,592.50 to cover the USPTO’s attorney’s fees even though the USPTO lost the case and was required to issue the applicant a patent.  

I am an intellectual property attorney, not claiming to be an expert in any other areas of the law. Yet, I am not aware of any other areas of law where the prevailing party is required to pay for the losing party’s attorney’s fees. There are “exceptional” cases, in which the losing party is responsible for the prevailing party’s attorney’s fees, but requiring the prevailing party to pay the losing party’s attorney’s fees seems incredibly unjust in my opinion. If we break this down, the applicant must fight the USPTO throughout every stage until the applicant is finally awarded the patent to which he/she is legally entitled, all while paying the USPTO and its attorney to unjustly prevent the applicant from receiving said rights.

Fortunately, the ruling in Nantkwest, Inc. v. Matal, is scheduled to be reheard. As an attorney that still believes in justice and fairness, I pray that the Federal Circuit overturns this decision and finds that the USPTO is responsible for its own attorney’s fees, especially when the USPTO is on the wrong side of the law.




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