Filing a Civil Action and Paying Fees

A few months ago I wrote about the Fourth Circuit decision in Shammas v. USPTO under the headline “USPTO Can Demand Attorney Fee Awards, Even When it Loses the Case.” The Shammas case surrounds the question of when, and to what extent, the PTO may request reimbursement of its costs associated with a civil action filed by a petitioner trying to force the USPTO to grant the applied-for rights.  The particular case here is focused on a trademark civil action, but the statute is virtually parallel for patent cases. In particular, both provisions include cost-shifting would seemingly force the applicant to pay the PTO’s expenses of the proceedings, win-or-lose.

Patent Cases: “All the expenses of the proceedings shall be paid by the applicant.”

Trademark Cases: “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.”

Here, the district court sided with the USPTO – agreeing that the term “PROBIOTIC” was generic for its proposed use and therefore not registrable.

The district court then awarded attorney fees to the USPTO, which the 4th Circuit affirmed — holding that the “all the expenses” provision of the statute includes attorney fees.

The losing mark-seeker has now filed a petition for writ of cert asking:

Whether the Fourth Circuit’s holding – that “the expenses of the proceeding” that “shall be paid” by a trademark applicant bringing an action under Section 21(b) include the salaries of attorneys and paralegals employed by the United States Patent and Trademark Office – violates the American Rule.

Although the PTO seems to have the upper hand with regard to the statutory language, the right to fee shifting is hard for petitioners to accept — especially considering the rarity of strict fee-shifting mechanisms within our court systems (especially where one-side always pays).

A surprising aspect of the case is that the statute has been around for a while (170 years) and during that time, the USPTO has apparently never before sought (or been awarded) attorney fees under the statute. Without a grant of certiorari, that trend will have come full-stop and about-course.

[Shammas v Focarino certiorari pet and pet app]



35 thoughts on “Filing a Civil Action and Paying Fees

  1. 8

    Because I am not a lawyer and really only know patent law from the standpoint of technology expert consulting, the following is just my impression from reading the statutes.

    If a patent applicant uses 35 USC 145 to challenge the results of PTO examination and he believes that the PTO has violated its implicit contractual obligations (e.g., because of some sort of secret and QA program like SAWS or Second Look that almost certainly violate the API, the rules of examination, and due process), he can file in the Court of Federal Claims to recover losses associated with breaches of the implicit contract of fact. If the plaintiff prevails in District Court and in the CFC, he might be able to recover any fees demanded by the PTO in District Court as part of the judgment in the CFC.

  2. 7

    Well one would assume – as has been the case forever – that ‘expenses’ means out of pocket expenses – like an external rebuttal expert hours/rate, or copy costs, or trial exhibits – but that would not include the Agency employee salary.

  3. 6

    As to patents, I find the subject language “All the expenses of proceeding shall be paid by the applicant” at the end of 35 USC 145 “Civil action to obtain patent”, but NOT in other patent appeal statute sections, such as the far more common direct appeal from the PTAB to the Fed. Cir.

  4. 5

    A surprising aspect of the case is that the statute has been around for a while (170 years) and during that time, the USPTO has apparently never before sought (or been awarded) attorney fees under the statute.

    I’m pretty sure the USPTO has threatened to do so on occasion. As you can imagine, this threat changes the calculations for an applicant.

    How many district court actions have there been in the 170-year history of the statute?

      1. 5.1.1


        So far, we only know about one trademark case (see my comment at below), so your patent case will have to do. (There is also Hyatt, of course.) What did the PTO invoice for, if anything?



            Why did you asked if it counted then?

            According to (old) 35 U.S.C. 145, “The Director shall not be a necessary party but he … shall have the right to intervene.” Not so in your case, so -1.


              What, bothers me T is when the litigation is essentially between two parties and one party settles out but the patent office intervenes to support the PTAB’s decision in favor of the settling party, it is extremely unfair for the patentee to bear the patent office’s costs or attorney’s fees. No party should be paying the patent office fees when they intervene in somebody else’s dispute. What if the statute still requires it, these “expenses” should be paid by the settling party in whose favor the award was made.



                What bothers me is that in the whole history of the Universe, we only have one example of a bill from the PTO for either trademarks or patents.

  5. 4

    The PTO has the upper hand here legally because that’s what the statute says, and it has the PR argument because it won the case. But there’s not a politician in the USA who would side with the PTO on the costs award if the PTO had *lost* the main case on TM registrability. If the PTO were in the future to seek attorneys’ fees from a party that beat it in court regarding patent or TM registration, it wouldn’t be hard to generate buzz in the mainstream press and social media about that evil government that refuses to provide the services it’s supposed to provide, then has the audacity to tell people who spent time and money going to court to successfully force the PTO to do what the law says it’s supposed to do that they need to pay the PTO for being schmucks. That’s not to say that getting a change in the statute passed would be easy, but this particular issue is one every citizen can relate to, so it’s an easier goal than many amendments to the patent statute that might be worth enacting.

    1. 4.1

      Good point Dan – with a direct parallel to the changes in the Marking Statute, let went a long period of time before being correctly applied, then when correctly applied, had a buzz generated rather quickly for a change to the law to be made.

    1. 3.1

      Not for currently seeking compensation for current litigation. There was no delay by the party. The age of the statute is irrelevant for laches.

      1. 3.1.1

        Paul — it’s not the age of the statute … but instead the staggering number of years the PTO / Fed Gov has elected to not enforce / utilize the statue.

        All patent stakeholders have reasonably and fairly relied for over 100 years on the fact that this government “right” had become null and void due to its nonuse.

        Their right to rely on it was gone long, long before any of us had seen our first sunrise.

        Use it or lose it. They lost it.


          Laches precludes recovering PAST damages during the laches period, but that is not the case here. This is a prompt attempted recovery for new suit damages against a new party.
          Even the present party may have difficulty proving that it was harmed unless it is willing to argue that “but for” its assumption that the PTO would not enforce the law, they would not have appealed the PTAB decision to the Courts that caused the subject legal costs on the Solicitors Office. Even more clearly, they cannot possibly claim laches for this Sup. Ct. appeal or anything else after they were told of the costs claim.



          Along the same lines, from the 4th Circuit Dissent, footnote 4 on page 21a: “Shammas contends here—and the PTO does not dispute— that, prior to 2013, the PTO had never sought an attorney’s fee award under the patent and trademark laws. If such awards had been generally available, the PTO’s silence in the face of such authority is more than passing strange.”

          I find it passing strange that there is no mention in the linked materials of how many previous cases there were. If there were many, then I think (but am not an APA expert) one could argue that the PTO was being arbitrary and capricious.


          Just call it “equitable estoppel,” instead of the more specific “laches,” and I think you’ve got a decent argument.

  6. 2

    This case has constitutional dimension particularly if de novo review of an agency action is required for constitutional purposes. See that discussion in B & B hardware.

    1. 2.1

      Ned – de novo review of a PROPOSED determination wrt questions of law (as opposed to fact).

      Please, get it right.

      1. 2.1.1

        David, trademarks are not public rights. Therefore, with respect to issued trademarks, the owner has a right to a trial in an Article III court and to a jury before his mark is invalidated.

        Do you agree or disagree?


          Agree. Should the claim of patent validity remain classified as administrative, the same inevitable result will come for both (c) and TM. The sua sponte discussion in the BB dissent should not be overlooked / undervalued.

          The patent validity Article III fight is just the beginning.


            Your constant point that the court trial cannot be in for form of an appeal where the facts are otherwise binding on the court (substantial evidence) is beginning to really sink in.

            B&B Hardware was wrongly decided because the trademark owner does not have a meaningful opportunity to have his case heard in a court of law.


              Well, to be fair to the SCOTUS, B&B was really just a question of whether collateral estoppel applied. In this regard, the holding is pretty limited. What makes it so interesting, however, and this is particularly true for you, as lead counsel for MCM – one of several parties challenging the constitutionality of the designation of the claim of patent validity as a public right – is that the dissenters sua sponte brought up the question of whether the admin tribunal was appropriately entering decisions on questions of TM law with finality.

              To reiterate the point, and as explained by the SCOTUS, a determination on a question of law is neither proposed nor advisory (and thus final) IF, but for an appeal, the determination of law is given effect. In your case, if a patentee does not appeal an adverse decision by the PTAB, the claims are indeed cancelled – “final.” De novo review does not cure this. De novo review of the advisory opinion on the question of law (as opposed to fact) is the mandatory constitutional cure.

              In B&B – thus, the SCOTUS majority assumed, as it should have given that the issue was not properly before it, that the claim was properly before the administrative tribunal in the first place, and on this basis, merely applied traditional collateral estoppel principles.


                De novo review of the advisory opinion on the question of law (as opposed to fact) is the mandatory constitutional cure.


                Are you saying that the judicial branch not only has the authority to re-write legislation, but that they must do so…?

                Or is your reference to Ned’s case (MCM) not what you are referring to?

    2. 2.2

      A constitutional issue does not lie under every rock. This is an appeal from a federal court, and a federal court statutory interpretation, not an agency decision.
      [And you have yet to even convince any modern federal court that every agency decision requires judicial review by more than by a judicial appeal.]

      1. 2.2.1

        Agreed – there is currently one legtimate constitutional question facing the patent bar: Article III and impermissible delegation of judicial power to an Administrative tribunal subject to the whims of the executive and legislative branches.

        Everything else is just petulant “me-too ” ism, and detracts from the legitimacy of the actual issue.

      2. 2.2.2

        Paul, I was thinking more along the line of some fix of IPRs that would require a de novo trial that would result in a summary judgment affirmance if no new evidence is adduced. Now if the petitioner drops out, and the PTO somehow takes up the cause for the absent petitioner, would be constitutional to bill the patent owner for the expenses properly attributable to the petitioner in the first place for a proceeding required by the constitution?

  7. 1

    I can see arguing against the lower court’s statutory interpretation, but what is the legal authority for overruling the statute, if it is held to be correctly interpreted, with “The American Rule”?
    The petition cites for authority:
    “..the “American Rule,” the “‘bedrock principle’” that, in all civil litigation, “‘[e]ach litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.’” Baker Botts LLP v. Asarco LLC, 135 S. Ct. 2158, 2164 (2015) (quoting Hardt v. Reliance Standard Life Ins. Co.,
    560 U.S. 242, 252-53 (2010)). “The American Rule has roots in our common law reaching back to at least the 18th century,” id., and is “deeply rooted in our history and in congressional policy,” Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 271 (1975).”
    But note that their own cite above says: “unless a statute or contract provides otherwise.”
    This issue is obviously of interest to the pending House Goodlatte “looser pays” legislation, which is by far the most controversial of that Bill’s provisions.
    Also, shown by the dust-up just a few years ago over the “patent marking statute trolls” qui tam suits [nipped in the bud by the AIA], and the current squeals of pain over the design patents damages statute, the fact that a literal interpretation of statutory language has been ignored for many years does not prevent it from being effective asserted many years later by cleverer attorneys.

    1. 1.1

      P.S. If I had spelled “looser” correctly above with only one “o” it would probably have triggered the comments”filter.” But it is also an apt pun, since the real trouble with the Goodlatte “lo-ser” pays as compared to Senate bills versions is that it IS too “loose” in its presumptions or proof for when it would be triggered.

      1. 1.1.1

        BTW, if the statute was only meant to cover D.C. litigation “court costs” [as those are currently limited] one would think the statute drafters would have used that term-of-art rather than “expenses” UNLESS the term “expenses” had a different meaning back when the statute was written?

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