Shammas v. Focarino

• Decision Date: 03 January 2014
• Docket Number: Case No. 1:12–cv–1462.
• Citation: 990 F.Supp.2d 587
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Milo SHAMMAS, Plaintiff, v. Margaret A. FOCARINO, Commissioner of Patents, Defendant.

990 F.Supp.2d 587

Milo SHAMMAS, Plaintiff,

v.Margaret A. FOCARINO, Commissioner of Patents, Defendant.

Case No. 1:12–cv–1462.

United States District Court,

E.D. Virginia,

Alexandria Division.

Jan. 3, 2014.

John Nolan Jennison, Law Offices Jennison & Shultz, P.C., Arlington, VA, for Plaintiff.

Dennis Carl Barghaan, Jr., United States Attorney's Office, Alexandria, VA, for Defendant.

MEMORANDUM OPINION

T.S. ELLIS, III, District Judge.

At issue post-judgment in this 15 U.S.C. § 1071(b) action seeking review of a decision from the Patent and Trademark Office's (“PTO”) Trademark Trial and Appeal Board (“TTAB”) are the following two questions:

(1) whether the requirement in 15 U.S.C. § 1071(b)(3) that plaintiff must pay the PTO “all expenses of the proceeding” includes the salaries of the PTO attorneys and paralegals who worked on the case; and

(2) whether the PTO's claim for $11,436.15 for the effort expended by the PTO's counsel in moving to strike supplemental new evidence filed by plaintiff in contravention of a discovery order is a “reasonable attorney's fee” under Rule 37(b)(2)(C), Fed.R.Civ.P.

For the reasons that follow,

(1) “all expenses of the proceedings” under 15 U.S.C. § 1071(b)(3) includes $35,926.59 in attorney and paralegal salaries and $393.90 in photocopying expenses and thus, plaintiff is required to pay these expenses to the PTO, and

(2) the PTO's request for $11,436.15 in attorney's fees under Rule 37(b)(2)(C), Fed.R.Civ.P., representing the attorney effort in moving to strike the new evidence, is excessive and unreasonable in the circumstances; a reasonable attorney's fee award under the circumstances is $2,280.00.

I.

On December 19, 2012, plaintiff, Milo Shammas, filed a complaint in this district pursuant to 15 U.S.C. § 1071(b)(1) seeking review of the TTAB's decision denying federal trademark registration to the proposed mark, PROBIOTIC, with respect to fertilizers. The TTAB had previously concluded that the term PROBIOTIC was generic with respect to fertilizers, and alternatively, that the term was descriptive, but lacked secondary meaning and hence did not warrant registration as a trademark.

Because plaintiff brought the case under 15 U.S.C. § 1071(b)(1), which allows a dissatisfied applicant denied trademark registration by the TTAB to file an action in a district court seeking review of the TTAB's decision, both parties were permitted by this statute to submit new evidence in addition to the administrative record.¹ Both parties did so in compliance with a scheduling and discovery order entered on March 5, 2013 that required, in part, as follows:

(1) both parties to exchange initial disclosures, as required by Rule 26(a)(1), Fed.R.Civ.P., by March 29, 2013;

(2) discovery to be completed by June 14, 2013;

(3) plaintiff to serve on the PTO any new evidence, including non-expert declarations or expert reports, upon which plaintiff intended to rely, by April 12, 2013;

(4) the PTO to serve on plaintiff any new evidence on which the PTO intended to rely by May 17, 2013; and

(5) plaintiff to serve on the PTO any rebuttal expert report upon which plaintiff intended to rely by May 31, 2013.

Shammas v. Rea, Case No. 1:12cv1462 (E.D.Va. March 5, 2013) (Order). Thus, the discovery order clearly required the record on new evidence to be completed by mid-May.

In compliance with the discovery order, the parties submitted their new evidence to the record on the prescribed dates. The discovery order permitted no further new evidence submissions. Yet, when summary judgment was filed thereafter on August 9, 2013, plaintiff, without leave of court, sought to add additional new evidence to the record. Because this attempt to submit additional new evidence contravened the discovery order, the PTO promptly filed a motion and supporting memorandum to strike this late-filed new evidence. By order dated October 15, 2013, the PTO's motion to strike this tardy new evidence was granted, and the evidence was stricken as a sanction under Rule 37, Fed.R.Civ.P., which provides that a court “may sanction a party who fails to obey an order to provide or permit discovery by prohibiting that party from introducing late-filed matters into evidence.” Shammas v. Rea, Case No. 1:12cv1462, 978 F.Supp.2d 599, 2013 WL 5672404 (E.D.Va. Oct. 15, 2013) (Order) (quoting Fed.R.Civ.P. 37(b)(2)(A)(ii)).

By separate order of the same date, summary judgment in favor of the PTO was granted on the ground that substantial evidence supported the TTAB's finding that the term PROBIOTIC was generic and that plaintiff's new evidence, reviewed de novo, did not alter that conclusion. Following the entry of judgment to this effect, the PTO filed a motion for fees and expenses, seeking the following:

(1) expenses of the case under 15 U.S.C. § 1071(b)(3), which provides that, in an action appealing a decision of the TTAB to a federal district court, “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;” and

(2) reasonable attorney's fees for the costs of the motion to strike under Rule 37(b)(2)(C), Fed.R.Civ.P.

By way of a response, plaintiff appropriately and sensibly apologized for this late proffer of new evidence and the resulting burden imposed on the PTO, and thus does not oppose a reasonable attorney's fees award under Rule 37(b)(2)(C), Fed.R.Civ.P. Plaintiff does, however, oppose the PTO's entitlement to attorney's fees under § 1071(b)(3) on the ground that attorney's fees are not included in the statute'srequirement that a plaintiff pay “all expenses of the proceeding.” Accordingly, the questions presented are (1) whether “all expenses of the proceeding” in § 1071(b)(3) includes the PTO's attorney's fees; and (2) whether the PTO's request for $11,436.15 in attorney's fees under Rule 37(b)(2)(C), Fed.R.Civ.P., is reasonable.

II.

A.

Section 1071(b)(3) clearly allows a party dissatisfied with a trademark decision of the TTAB to choose between appeal to the Court of Appeals for the Federal Circuit, or filing an action in district court. By itself, this does not seem remarkable. Yet, the statute goes on to provide that—win, lose, or draw—the party bringing an action in district court must pay the PTO “all expenses of the proceeding.” ² The dispute here is whether the phrase “all expenses of the proceeding” includes the PTO's attorney's fees.

The question whether “all expenses of the proceeding” includes attorney's fees appears to be one of first impression, as the parties have cited no published decision addressing this issue, nor has any been found. In any event, 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. In this regard, the ordinary definition of the term “expenses” answers the question presented.³ As Black's Law Dictionary states, the term “expenses” means:

That which is expended, laid out, or consumed. An outlay; charge; cost; price. The expenditure of money, time, labor, resources, and thought. That which is expended to secure benefit or bring about a result.

Merriam–Webster defines the term “expenses” as:

The amount of money that is needed to pay for or to buy something. An amount of money that must be spent especially regularly to pay for something. Something on which money is spent. An act or instance of expending. Something expended to secure a benefit or bring about a result.

Thus, the plain meaning of the term “expenses,” by itself, would clearly seem to include attorney's fees. But if any doubt remains about that inclusion, it is removed by Congress's addition of the word “all” to clarify the breadth of the term “expenses.” When the word “expenses” is prefaced with the word “all,” it is 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 conclusion compelled by the statute's plain language finds firm support in the following statutes passed by Congress, all of which explicitly include “attorney's fees” as a subset of “expenses:”

• 28 U.S.C. § 2412 (stating that “a court shall award to a prevailing party other than the United States fees and other expenses” and further stating that a judgment for costs does not include “the fees and expenses of attorneys”);

• 5 U.S.C. § 504 (“An agency that conducts an adversary adjudication shall award ... fees and other expenses incurred by that party in connection with that proceeding.”);

• 12 U.S.C. § 4246 (stating that, in an action against a person committing bank fraud, “the court ... may allow the United States reasonable attorney's fees and other expenses of litigation”);

• 28 U.S.C. § 1447(c) (permitting recovery of “any actual expenses, including attorney's fees, incurred”);

• 12 U.S.C. § 5009 (providing that any person who breaches a banking warranty in connection with a substitute check is liable for “reasonable attorney's fees and other expenses of representation” related to the substitute check);

• 42 U.S.C. § 1490s (stating that a non-compliant party may be liable for a monetary judgment including “attorney's fees and other expenses incurred by the United States in connection with the action”).

• Rule 37(b)(2)(C), Fed.R.Civ.P. (requiring the party who violates or disobeys a discovery order to pay “reasonable expenses, including attorney's fees” caused by the failure to obey the order).

Similarly, other courts in a variety of contexts have also found attorney's fees to be a subset of the term “expenses.” For example, the Supreme Court, in discussing fee-shifting statutes, stated that “[o]ur legal system generically requires each party to bear his own litigation expenses, including attorney's fees, regardless of whether he wins or loses.” Fox v. Vice, ––– U.S. ––––, 131 S.Ct. 2205, 2213, 180 L.Ed.2d 45 (2011) (emphasis added). To the same...