District Court Says Applicant Must Pay PTO Attorney's Fees in Section 1071(b) Civil Action, Win or Lose
The U.S. District Court for the Eastern District of Virginia recently ruled that, in a Section 1071(b) civil action for review of an ex parte TTAB decision, the applicant/plaintiff must pay the USPTO's expenses (including attorney and paralegal fees). [Win or lose, said the court, although this case involved only "lose."] The court awarded the USPTO $32,836.27 in attorney salaries, $3,090.32 in paralegal salaries, and $393.90 in photocopying expenses. Shammas v. Focarino, 109 USPQ2d 1320 (E.D. Va. 2014).
On October 25, 2012, the TTAB affirmed a refusal to register the term PROBIOTIC as a trademark for fertilizer, deeming it to be generic. [opinion here]. Applicant Milo Shammas then filed a civil action for review under Section 1071(b). The district court granted summary judgment in favor of the PTO on October 15, 2013, upholding the Board's decision.The PTO moved for an award of fees and expenses.
Section 1071 (b)(3) provides, in pertinent part, the following:
In any case where there is no adverse party ... 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. [Emphasis supplied].
The court faced the issue of whether "all expenses of the proceeding" includes attorney's fees, and it found this to be a question of first impression. However, it also found the question "not difficult" to answer, because it involves a straightforward statutory construction, "with the analysis beginning and ending with the plain language of the statute." If there were any doubt as to the scope of the term "expenses," the inclusion of the word "all" in the statute makes clear the breadth of the term.
When the word "expenses" is prefaced with the word "all," it is pellucidly clear Congress intended that the plaintiff in such action pay for all the resources expended by the PTO during the litigation, including attorney's fees.
The court noted various other statutes in which "attorney's fees" represent a subset of "expenses," and it cited several court decision to support the conclusion that "expenses" include attorney's fees.
The expenses submitted by the PTO were calculated by multiplying the number of hours for each individual by the actual hourly rate of each (calculated from the annual salary of the individual).
The court also awarded to the PTO the sum of $2,280.00 to compensate for expenses incurred in connection with a Rule 37 motion, which sum was separate from and in addition to the Section 1071 (b)(3) award.
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TTABlog note: Well, does this put a whole new spin on how to seek review of a TTAB ex parte decision? An appeal to the CAFC may turn out to be less expensive than a civil action. But the civil action route allows one to add new evidence.
Text Copyright John L. Welch 2014.