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Fabick, Inc. v. JFTCO, Inc.

Peter v. Nantkwest

SOTOMAYOR, J., delivered the opinion for a unanimous Court.

The PTO cannot recover the salaries of its legal personnel under §145. Pp. 3–10.

(a) The “American Rule”—the bedrock principle that “[e]ach litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise,” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 253—provides the starting point for assessing whether §145 authorizes payment of the PTO’s legal fees. Contrary to the Government’s view, this Court has never suggested that any statute is exempt from the presumption against fee shifting or limited its American Rule inquiries to prevailing party statutes. Rather, it has developed a line of precedents addressing statutory deviations from the American Rule that do not limit attorney’s fees awards to prevailing parties. See, e.g., id., at 254. The presumption against fee shifting is particularly important here because reading §145 to permit an unsuccessful government agency to recover attorney’s fees from a prevailing party “would be a radical departure from longstanding fee-shifting principles adhered to in a wide range of contexts.” Ruckelshaus v. Sierra Club, 463 U. S. 680, 683. Pp. 3–6.

(b) Section 145’s plain text does not overcome the American Rule’s presumption against fee shifting. Definitions of “expenses,” while capacious enough to include attorney’s fees, provide scant guidance. The mere failure to foreclose a fee award “neither specifically nor explicitly authorizes courts to shift [fees].” Baker Botts L. L. P. v. ASARCO LLC, 576 U. S. 121, ___. The complete phrase “expenses of the proceeding” would not have been commonly understood to include attorney’s fees at the time §145 was enacted. Finally, the modifier “all” does not transform “expenses” to reach an outlay it would not otherwise include. In common statutory usage, the term “expenses” alone has never been considered to authorize an award of attorney’s fees with sufficient clarity to overcome the American Rule presumption. The appearance of “expenses” and “attorney’s fees” together across various statutes indicates that Congress understands the terms to be distinct and not inclusive of each other. See, e.g., 11 U. S. C. §363(n). Other statutes that refer to attorney’s fees as a subset of expenses show only that “expenses” can include attorney’s fees when so defined. See, e.g., 28 U. S. C. §361. Nor do this Court’s cases further the Government’s position that the Court has used “expenses” to mean “attorney’s fees.” See, e.g., Taniguchi v. Kan Pacific Saipan, Ltd., 566 U. S. 560, 573.

The Patent Act’s history reinforces that Congress did not intend to shift attorney’s fees in §145 actions. There is no evidence that the original Patent Office ever paid its personnel from sums collected from adverse parties. Neither has the PTO, until this litigation, sought its attorney’s fees under §145. When Congress intended to provide for attorney’s fees in the Patent Act, it has stated so explicitly. See, e.g., 35 U. S. C. §285. Pp. 6–10.

898 F. 3d 1177, affirmed.

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