August 19, 2021

Federal Circuit Holds USPTO Can’t Recover Expert Witness Fees under 35 USC § 145

In Hyatt v. Hirshfeld, [2020-2321, 2020-2323, 2020-2324, 2020-2325] (August 18, 2021), the Federal Circuit affirmed the district court’s denial of an award of the USPTO’s expert witness fees in defending a civil action under 35 USC § 145 brought by patent applicant Hyatt.

In a prior appeal the Federal Circuit held that 35 USC § 145 does not entitle the USPTO to recover its attorneys fees. The Patent Office also sought reimbursement of its expert witness fees under 35 U.S.C. § 145, which provides that “[a]ll the expenses of the proceedings shall be paid by the applicant.” The Patent Office cited a string of district court decisions awarding expert witness fees under the statute, but the district court found that these cases lacked any reasoning regarding the American Rule presumption against fee shifting, and noting recent Supreme Court emphasis of that presumption, the district court denied an award of expert fees.

The Federal Circuit agreed with the district court that 35 USC § 145 was not sufficiently specific to overcome the presumption against fee-shifting. The Federal Circuit said that no magic words are needed to override the American Rule, but the requirement that Congressional intent be specific and explicit is a high bar. The Federal Circuit said that vague terms like “costs” are also not enough.

The Federal Circuit looked to the Supreme Court’s decision in NantKwest, noting that although the Court’s holding that attorney’s fees are not shifted does not inherently dictate that expert fees cannot be shifted, much of the Court’s reasoning in NantKwest applies equally with respect to expert fees. Tracking that decision, the Federal Circuit found the dictionary definitions of the words in the statute, the language of the statute, and the fact that in other statutes Congress specifically included expert fees, suggested that the central logic of NantKwest is applicable to its decision here, indicating that § 145 does not shift expert witness fees.

The Patent Office emphasized the long string of cases awarding expert witness fees, but the Federal Circuit said that longstanding practice is not enough to overcome the American Rule presumption.