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Conkwest, Inc. v. Lee

United States District Court, E.D. Virginia, Alexandria Division

February 5, 2016

NANKWEST, INC., Plaintiff,
v.
MICHELLE K. LEE, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office, Defendant.

MEMORANDUM OPINION AND ORDER

GERALD BRUCE LEE UNITED STATES DISTRICT JUDGE.

THIS MATTER is before the court on Defendant, Michelle K. Lee's Motion for Expenses (Doc. 78) at the conclusion of a trademark and infringement case, where the Plaintiff elected to bring its appeal of the PTAB's decision pursuant to 35 U.S.C. §145.

The first issue is whether 35 U.S.C. § 145's language requiring Plaintiff to pay for the USPTO's "expenses" encompasses the payment of the USPTO's attorney fees, thereby deviating from the American Rule, that each side bears their own attorney's fees. The second issue is whether the USPTO's expert witness' fees of $800/hr. (and $1000/hr. for testimony) were unreasonable given that Plaintiffs own expert, specializing in the same field, only charged $400/hr.

The Court DENIES Defendant's Motion for Expenses regarding the Defendant's attorney fees and GRANTS Defendant's Motion for Expenses relating to Defendant's expert witness.

I. BACKGROUND

This matter arises from a patent infringement dispute between Nantkwest, Inc. ("NantKwest") and the United States Patent and Trademark Office ("USPTO"). Def. Mot. to Dismiss, at 1. After the PTAB rejected its patent claims, Plaintiff Nantkwest, pursuant to 35 USC § 145, elected to present its claim in this Court. Id. Section 145 allows a plaintiff to have a federal district court review its patent claims, along with new evidence, to determine the patentability of the relevant patents. 35 U.S.C. §145. However, when a plaintiff elects to have a district court review patents pursuant to § 145, Congress has mandated that the plaintiff is responsible for "all the expenses of the proceeding." Id.

On December 20, 2013, under § 145, NantKwest filed this proceeding to challenge an adverse decision from the USPTO. Def. Mot. to Dismiss, at 2. On September 2, 2015, this Court entered summary judgment in favor of the USPTO. Id. The USPTO now seeks $111, 696.39 from Plaintiff as "expenses" of the proceeding under § 145. Id.

II. STANDARD OF REVIEW

Under the "American Rule, " parties are responsible for their own attorneys' fees. In re Crescent City Estates, LLC, 588 F.3d 822, 825 (4th Cir. 2009) (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994)). Thus, a prevailing litigant is generally not entitled to recover attorneys' fees from the non-prevailing litigant. Id. (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 477 U.S. 240, 247 (1975)). However, there is an exception to this rule when attorney's fees are provided by a statute. Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 448 (2007). Nevertheless, a statute will only be interpreted as allowing a deviation from the American Rule if it requires another party to pay attorney's fees in specific and explicit provisions. Baker Botts L.L.P. v. ASARCO LLC, 135 S.Ct. 2158 (2015). The party seeking to recover attorneys' fees has the burden of demonstrating that it is entitled to fees and that the amount it seeks is reasonable. See Airlines Reporting Corp. v. Sarrion Travel, Inc., 846 F.Supp.2d 533, 536 (E.D. Va. 2012).

III. ANALYSIS

The Court DENIES Defendant's Motion for Expenses regarding the Defendant's attorney fees and GRANTS Defendant's Motion for Expenses relating to Defendant's expert witness.

1. The USPTO is Not Entitled to Attorneys' Fees Under 35 U.S.C. §145.

a. The American Rule Does Not Allow Payment Of Attorneys' Fees Unless A Statute Specifically And Expressly Requires It.

Defendants are not entitled to attorneys' fees because the American Rule specifically forbids it. The American Rule states that each litigant pays his own attorneys' fees, win or lose, unless a statute or contract provides otherwise. Baker Botts L.L.P. v.ASARCO LLC, 135 S.Ct. 2158, 2164 (2015); Hardt v.Reliance Standard Life Ins. Co., 560 U.S. 242, 252-53 (2010) ("[e]ach litigant pays his own attorney's fees, win or lose, unless a statute or contract provides otherwise."). Because the American Rule is rooted in common law, dating as far back as the 18th century, a party who seeks to deviate from the American Rule by requesting attorneys' fees from his opposing party, must have statutory justification. Baker Botts, 135 S.Ct. at 2164 ("The basic point of reference when considering the award of attorneys' fees is ...


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