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.