Fee Shifting for PTAB Proceedings

Abstract

Fee shifting in patent litigation has been a hot topic in recent years. In Octane Fitness v. ICON and Highmark v. Allcare, the Supreme Court made it easier to shift fees under 35 U.S.C. § 285, which allows courts to award reasonable attorney’s fees to prevailing parties in patent cases. Moreover, several bills have been introduced in Congress since 2013 that would expand courts’ power beyond the parameters of § 285. Various aspects of these proposals have been heavily debated, including whether fee shifting should be mandatory or discretionary, how to recover fees from the “real party in interest,” and whether to adopt a one-way or two-way fee shifting scheme. These sort of design choices regarding a fee shifting regime are not simply about who should pay for patent litigation. Fee shifting schemes also provide a roadmap from lawmakers about whether and how litigation ought to proceed. Fee shifting regimes, in other words, are used to influence litigation conduct. Thus, if Congress is going to alter the fee shifting landscape for patent litigation, it must make careful choices in order to incentivize certain types of patent disputes, while simultaneously discouraging others. This Article does not advocate for a new fee shifting regime for patent litigation, nor does it endeavor to design one. Instead, it focuses on one narrow but important question about fee shifting in patent cases that has received surprisingly little attention: whether prevailing parties should be able to recover attorney’s fees incurred for litigation before the Patent Trial and Appeal Board (PTAB) — the administrative tribunal of the U.S. Patent & Trademark Office that was created by the America Invents Act (AIA). With the steep rise in both PTAB proceedings (post-AIA) and fee motions (post-Octane/Highmark), district courts are bound to face this question more frequently. While the U.S. Court of Appeals for the Federal Circuit has allowed for the recovery of such fees in the past, the Federal Circuit’s analysis was flawed in light of Supreme Court precedent. Thus, this Article proposes that Congress enact legislation allowing parties who prevail at the PTAB to recover their attorney’s fees.