Addressing for the first time whether attorneys’ fees are included in the statute, the U.S. District Court for the Eastern District of Virginia held that “all expenses of the proceedings” under 15 U.S.C.§ 1071(b)(3) includes attorneys’ fees and paralegal salaries.  Shammas v. Focarino, Case No. 12-cv-1462 (E.D. Va. Jan 2, 2014) (Ellis, J.). 

Section 1071(b)(3) plainly allows a party dissatisfied with a trademark decision of the Trademark Trial and Appeal Board (TTAB) to choose between an appeal at the U.S. Court of Appeals for the Federal Circuit or an action in district court.  An important consideration in this decision is the fact that the statute provides that “win, lose or draw,” the party bringing an action in district court must pay the Patent and Trademark Office (PTO) “all expenses of the proceeding.”  The dispute in the case centered on whether this included the PTO attorneys’ fees.  The district court found that “the question is not difficult to resolve; it is a straightforward case of statutory interpretation with the analysis beginning and ending with the plain language of the statute.”  The court went on to find that the standard definition of expenses “would clearly seem to include attorney’s fees.”  To the extent there was any doubt, Congress’s addition of “all” to clarify “expenses” makes it “pellucidly clear Congress intended that the plaintiff in such an action pay for all the resources expended by the PTO during the litigation, including attorney’s fees.”  The district court further justified its decision by examining a variety of statutes that explicitly included attorneys’ fees as a subset of expenses.  Based on its conclusion that attorneys’ fees were to be included in the amount a party challenging a TTAB decision in district court must pay, the court ordered the plaintiff to reimburse the PTO $32,836.27 in attorney salary, $3,090.32 in paralegal salary and $393.90 in photocopying expenses.

Practice Note:  If a party decides to challenge a TTAB decision in district court, it must be prepared to reimburse the government for the salaries of those involved in defending the PTO’s decision.