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Jan. 10 -- The U.S. District Court for the Eastern District of Virginia on Jan. 3 ordered a litigant who had appealed an adverse Trademark Trial and Appeal Board decision to the district court, rather than to the U.S. Court of Appeals for the Federal Circuit, to pay the Patent and Trademark Office more than $30,000 in attorneys' fees, (Shammas v. Focarino, E.D. Va., No. 1-12-cv-01462, 1/3/14).
The PTO's motion for attorneys' fees came after the district court awarded the agency summary judgment, finding that the board's refusal to register the applicant's “Probiotic” mark on genericness grounds was supported by substantial evidence (203 PTD, 10/21/13). The court, in an issue of first impression, had to determine whether the litigant's statutory requirement to pay “all expenses of the proceeding” included the PTO's attorney's fees. The court determined that it did.
Section 107 of the Lanham Act permits a litigant to either appeal a TTAB ruling directly to the Federal Circuit, 15 U.S.C. § 1071(a)(1), or in the alternative to file a civil action challenging the board's ruling in a federal district court, 15 U.S.C. § 1071(b)(1). However, Section 107(b)(3) provides:
In any case where there is no adverse party, a copy of the complaint shall be served on the Director, and, unless the court finds the expenses to be unreasonable, all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not.
Section 1071(b)(3) clearly allows a party dissatisfied with a trademark decision of the TTAB to choose between appeal to the Court of Appeals for the Federal Circuit, or filing an action in district court. By itself, this does not seem remarkable. Yet, the statute goes on to provide that--win, lose, or draw--the party bringing an action in district court must pay the PTO “all expenses of the proceeding.” The dispute here is whether the phrase “all expenses of the proceeding” includes the PTO's attorney's fees.
The court went on to conclude that although a determination on whether attorneys' fees fall under the broad category of “all expenses” is an issue of first impression, “the question is not difficult to resolve; it is a straightforward case of statutory interpretation with the analysis beginning and ending with the plain language of the statute.”
The court noted that relevant legal definitions of the term “expenses” seemingly include attorney's fees.
“But if any doubt remains about that inclusion, it is removed by Congress's addition of the word 'all' to clarify the breadth of the term 'expenses,' ” the court said. “When the word 'expenses' is prefaced with the word 'all,' it is pellucidly clear Congress intended that the plaintiff in such an action pay for all the resources expended by the PTO during the litigation, including attorney's fees.”
The court awarded the PTO $32,836.27 in attorney salaries and $3,090 in paralegal salaries under Section 107(b)(3). The court awarded the PTO an additional $2,280 in reasonable attorney's fees under Fed. R. Civ. P. 37(b)(2)(C) for expenses incurred due to Shammas's violation of a discovery order.
Shammas was represented by John Nolan Jennison of Jennison & Shultz P.C., Arlington, Va. The PTO was represented by Dennis Carl Barghaan Jr. of the U.S. Attorney's Office, Alexandria, Va.
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