PATENTS

Issues

Helsinn Healthcare S.A. (“Helsinn”) sought and received four patents, beginning in 2003, for a drug developed pursuant to a licensing agreement with another pharmaceutical company. Though the drug’s formula remained confidential, the news of the deal was made public. In 2011, Teva Pharmaceuticals USA, Inc. (“Teva”) applied to the Food and Drug Administration for approval of a generic version of the drug, and—within that application—certified that Helsinn’s patents were invalid. Helsinn sued for patent infringement, arguing that the on-sale bar provision of the America Invents Act (“AIA”) does not apply to licensing agreements like the one Helsinn entered, because the confidentiality agreement in place meant that the invention was not publicly available. Helsinn then argues that adopting a different interpretation would conflict with the AIA’s two goals of aligning U.S. patent law with international standards and incentivizing prompt filing under the first-to-file standard. On the other hand, Teva asserts that the AIA’s on-sale bar provision does apply based on the plain meaning of “on sale” as illustrated by two-hundred years’ worth of statutory interpretation. Teva additionally counters that Helsinn’s interpretation would invite the secret-commercialization tactics that extend a company’s monopoly over inventions and that the AIA sought to eliminate. The Supreme Court’s decision has vast implications for patent-holders in the United States, may chill biotechnological innovation, and may adversely affect the public by extending monopolies over certain drugs and thus undermine the development of competition in the biotechnical market.

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Issues

This case asks the Supreme Court to determine whether the term “expenses” in 35 U.S.C. § 145 should be interpreted to include attorneys’ fees. To appeal a denied patent application under § 145, the patent applicant must be willing to pay the United States Patent and Trademark Office’s (“PTO”) “expenses” related to the litigation. The PTO contends that its attorneys’ fees incurred from litigating § 145 appeals should count as reimbursable “expenses.” NantKwest counters that the American Rule, a presumption that each party in litigation will pay its own attorneys’ fees unless there is explicit and specific statutory language allowing fee-shifting, is not defeated by the vague § 145 language regarding “expenses,” and that accordingly the PTO must pay its own attorneys’ fees in § 145 actions. The outcome of this case has important implications for the future of the American Rule, the interpretation of the term “expenses” in other statutes, and the cost of making a § 145 appeal from a rejected patent application.

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