Milo Shammas v. Margaret Focarino
784 F.3d 219
| 4th Cir. | 2015Background
- Milo Shammas filed a trademark application for “PROBIOTIC”; PTO denied registration as generic and TTAB affirmed.
- Instead of appealing to the Federal Circuit, Shammas brought a de novo action in district court under 15 U.S.C. § 1071(b)(1); the district court granted summary judgment for the PTO.
- After judgment, the PTO sought reimbursement under § 1071(b)(3) for “all the expenses of the proceeding,” including prorated salary-based amounts for two attorneys and a paralegal (totaling $36,320.49).
- Shammas argued the award was unlawful attorney-fee shifting contrary to the American Rule because § 1071(b)(3) does not explicitly authorize attorneys’ fees.
- The district court awarded the PTO’s claimed expenses; the Fourth Circuit affirmed, holding “expenses” includes reasonable salary-based attorneys’ and paralegal costs and that § 1071(b)(3) does not implicate the American Rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "all the expenses of the proceeding" in § 1071(b)(3) includes PTO attorneys' and paralegal salary expenses | Shammas: statute does not expressly authorize attorney-fee shifting; American Rule requires clear congressional authorization | PTO: "expenses" (especially with modifier "all") plainly covers attorney and paralegal expenses, even when salaried | Held: Yes — "all the expenses" reasonably includes salary-based attorneys' and paralegal expenses |
| Whether awarding such expenses conflicts with the American Rule and thus requires explicit statutory language | Shammas: American Rule presumption means fees cannot be shifted absent explicit reference to attorneys' fees | PTO: § 1071(b)(3) is not a fee‑shifting statute tied to prevailing party doctrine; it unconditionally imposes expenses on an ex parte applicant regardless of outcome | Held: American Rule presumption inapplicable because § 1071(b)(3) mandates payment whether plaintiff wins or loses, so it is a compensatory charge, not traditional fee‑shifting |
| Whether "expenses" should be read as limited to taxable costs rather than broader litigation expenses | Shammas: phrase should be read as "costs" (taxable costs) which do not include attorneys' fees | PTO: legislative text, structure, and history show "expenses" means more than taxable costs and was adopted from patent statutes that included salaries | Held: "Expenses" is broader than taxable costs and is not synonymous with "costs." |
| Whether legislative history and statutory structure support including personnel salaries as recoverable expenses | Shammas: Congress omitted explicit attorney-fee language elsewhere in Lanham Act and thus did not intend fee awards here | PTO: provision mirrors long-standing patent-law language and 1836/1839 Patent Act usage shows Congress understood "expenses" to include office salaries; §1071(b)(3) aims to shift district-court litigation burden to applicant | Held: Legislative history and structural parallels support reading "expenses" to include PTO personnel salary costs as reasonable expenses |
Key Cases Cited
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (1975) (American Rule presumption against fee-shifting)
- Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) (statutory fee‑shifting typically predicates fees on claimant's success)
- Robertson v. Cooper, 46 F.2d 766 (4th Cir. 1931) (interpreting "expenses" in patent statute to include government attorneys' expenses)
- Taniguchi v. Kan Pac. Saipan, Ltd., 132 S. Ct. 1997 (2012) (distinguishing taxable costs from broader non‑taxable litigation expenses)
- In re Crescent City Estates, LLC v. Draper, 588 F.3d 822 (4th Cir. 2009) (noting requirement of clear and direct congressional intent to displace American Rule)