In a decision sure to give litigants pause before requesting district court review of a Board’s affirmance of an examiner’s refusal, Judge T.S. Ellis of the Eastern District of Virginia held in Shammas v. Focarino, 12-cv-1462, E.D. Va., that the PTO is entitled to recover attorneys’ fees as “expenses” under Section 21(b)(3) of the Lanham Act, and that ex parte plaintiffs must pay those fees whether they win or lose.
Plaintiff Shammas applied for the mark PROBIOTIC for fertilizer, but was refused registration on the grounds that the mark was generic, or was descriptive and lacking in secondary meaning. The Board affirmed the examiner’s refusal of registration, finding the proposed mark PROBIOTIC to be generic. Pursuant to Section 21(b)(1) of the Lanham Act, 15 U.S.C. 1071(b)(1), Shammas sought district court review of the Board’s affirmance. Following the district court’s grant in its favor of summary judgment, the PTO moved for fees and expenses under Section 21(b)(3) of the Lanham Act, which provides “[i]n 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.” Shammas opposed a fee award arguing that attorneys’ fees are not included in the statutory term “expenses.” Judge Ellis disagreed, finding that the plain meaning of “expenses” includes attorneys’ fees and costs, and that this interpretation is reinforced by the inclusion of the word “all.” To calculate the “expenses” at issue under Section 21(b)(3), Judge Ellis found it reasonable to rely upon the actual salaries of the government attorneys at the PTO. In total, Judge Ellis ordered Shammas to pay nearly $36,000 in attorney and paralegal fees. The implication of the ruling is that a litigant could also be responsible for any survey or other expert expenses incurred by the PTO in defending the action. This liability should be factored into any future litigant’s decision to appeal an adverse ex parte decision from the Board to district court.