Media Coverage
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Olivia Thomas
08.01.18
An en banc Federal Circuit court ruled last week in a 7-4 split that the U.S. Patent and Trademark Office’s policy of demanding payment for its own legal fees from applicants who appeal rejections to a district court—regardless of who wins the appeal—violates the “American Rule.”
The USPTO began requiring payment of its legal fees from appellants in 2013 based on a new interpretation of the Patent Act and the Lanham Act, which both declare that unsuccessful applicants who appeal to a district court must pay “all expenses of the proceeding.” But opponents of the policy have argued that it conflicts with the American Rule, a “broad doctrine requiring U.S. litigants to generally pay their own legal fees unless a statute explicitly says otherwise,” according to Law360.
The USPTO’s policy was tested in a 2015 lawsuit from a trademark applicant in which a Fourth Circuit panel ruled in favor of the USPTO. And in 2017, a Federal Circuit panel also sided with the USPTO, but soon after the Federal Circuit announced it would re-hear that case en banc sua sponte, therefore without a request from either party. In the 7-4 opinion issued Friday, Judge Kara Fernandez Stoll, who had been the sole dissent in the Federal Circuit’s three-judge panel decision last year, wrote that upholding the USPTO’s interpretation of the “all expenses” language in the Patent and Lanham Acts would mark a “particularly unusual divergence from the American Rule” and that the court is “unwilling to invade the legislature’s province by redistributing litigation costs in a way that would create such an anomalous statute.”
The 2,600-member Federal Circuit Bar Association filed an amicus brief in the case that was authored by Pillsbury Intellectual Property partner Bill Atkins, senior counsel William West and associate Michael Kreiner and argued against the USPTO’s approach. Atkins praised Friday’s ruling, which utilized the FCBA amicus brief he helped draft, and described the court’s split as “gratifying.”
“This is a solid and well-reasoned decision which should withstand scrutiny at the Supreme Court, should cert be granted,” he said.
And Law360 reports that is a distinct possibility. Federal Circuit Chief Judge Sharon Prost and three colleagues strongly dissented from last week’s ruling, arguing in an 18-page opinion that Congress was clear in its authorization of the USPTO’s “all expenses” approach, and setting up a divide in the circuit. That split and the Fourth Circuit’s contrary conclusion for trademark cases emanating from the USPTO could send this case to the Supreme Court for a final determination.