The Verdict is In – Implications on the Supreme Court Ruling Regarding Attorney’s FeesDecember 12, 2019

The United States Supreme Court unanimously ruled on December 11, 2019, that the United States Patent and Trademark Office (USPTO) cannot demand repayment of attorney’s fees in district court proceedings brought under 35 U.S.C. § 145. For a summary of the arguments presented during oral arguments, see the author’s previous post here.

The opinion written by Justice Sotomayor not only provided the court’s reasonings for striking down the USPTO policy, but also provided insight on the high court’s interpretation of statutory language regarding expenses of litigation:

  • Determine Whether Presumptions are Present – There is a presumption against fee shifting with the “American Rule” and the Supreme Court has never suggested that any statute is exempt from such presumption.
  • Look to the Plain Text – The plain text of § 145 does not overcome the American Rule’s presumption against fee shifting. While the definition of “expenses” could be broad enough to include attorney’s fees, the mere failure to exclude a fee award “neither specifically nor explicitly authorizes courts to shift [fees].”
  • Legislative Intent – At the time § 145 was enacted, “expenses of the proceeding” would not have been commonly understood to include attorney’s fees. There is no evidence that the original Patent Office ever paid its personnel expenses from fees collected from adverse parties.

While the case heard by the Supreme Court pertained to provisions governed by the Patent Act, the outcome may also impact those pursuing trademark matters. The Lanham Act governing trademarks contains an identical provision within 15 U.S.C. § 1071(b)(3). Under this provision, the USPTO has also requested for such attorney’s fees to be paid by the applicant in trademark cases.

While the outcome of this case may not have been surprising to many, applicants may breathe a sigh of relief knowing that they can choose an appeal route based on strategy, rather than worrying about the drastic differences in expenses. The opinion may be found here.

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