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Applicant Must Pay PTO Lawyer Fees

The 4th Circuit upholds an order requiring a “dissatisfied applicant in an ex parte trademark proceeding” to pay attorney’s fees and expenses of $36,320.49, including salary expenses of PTO attorneys and a paralegal, to the director of the Patent and Trademark Office.

In June 2009, appellant filed a federal trademark application for the mark “PROBIOTIC” for use in connection with fertilizer products manufactured by his company, Dr. Earth Inc. In an ex parte proceeding, a trademark examining attorney for the PTO denied the application on the ground that the term was generic and descriptive. The Trademark Trial and Appeal Board affirmed. Appellant elected to commence a de novo civil action against the PTO in the district court, pursuant to 15 U.S.C. § 1071(b)(1). The district court granted summary judgment to the PTO, and then granted the PTO’s motion for fees and costs under § 1071(b)(3).

On appeal, the applicant argues the district court erred in “shifting” the PTO’s attorney’s fees to him, contrary to the “American Rule” under which each party bears his own attorney’s fees, because the governing statute does not expressly provide for the shifting of attorney’s fees.

We conclude the imposition of all expenses on a plaintiff in an ex parte proceeding, regardless of whether he wins or loses, does not constitute fee-shifting that implicates the American Rule but rather an unconditional compensatory charge imposed on a dissatisfied applicant who elects to engage the PTO in a district court proceeding. And we conclude this compensatory charge encompasses the PTO’s salary expenses for the attorneys and paralegals who represent the director.

Because the PTO is entitled to recover its expenses even when it completely fails, § 1071(b)(3) need not be interpreted against the backdrop of the American Rule.

Judgment for the PTO affirmed.


King, J.: The Lanham Act provision at issue, 15 U.S.C. § 1071(b)(3), makes no reference to attorney’s fees awards and does not reflect a Congressional intention to authorize such awards. Nevertheless, the panel majority affirms the attorney’s fee award to the PTO under § 1071(b)(3), in contravention of the American Rule. Because the American Rule applies and the PTO should bear its own attorney’s fees, I respectfully dissent.

Shammas v. Focarino, Comm’r of Patents (Niemeyer) No. 14-1191, April 23, 2015; USDC at Alexandria, Va. (Ellis) Aaron M. Panner for appellant; Jaynie R. Lilley, USDOJ, for appellee. VLW 015-2-075, 27 pp.

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