A party appealing a PTO decision must pay the PT0's expenses regardless of the applicant's success.
Booking.com successfully challenged the United States Patent and Trademark Office's ("PTO") refusal to register its mark BOOKING.COM. But, it must pay over $76,000 in expenses incurred by the PTO according to a recent holding by the United States Court of Appeals for the Fourth Circuit in Booking.com B.V. v. Iancu, No. 17-2458 (4th. Cir. Feb. 4, 2019).
The Fourth Circuit's ruling is the latest in a series of cases involving whether, and to what extent, a party appealing a PTO decision must pay the PTO's expenses on appeal to district court, regardless of the applicant's success. At issue in this case was the PTO's refusal to register BOOKING.COM as a trademark based on alleged genericness. After the district court reversed the PTO's decision and found that the mark was entitled to registration, Booking.com was ordered to repay the PTO $76,873 for legal expenses. Both parties appealed.
On the PTO's appeal of the decision that BOOKING.COM is protectable, the Fourth Circuit held the PTO bore the burden of proving the mark was generic and failed to satisfy its burden. The court rejected the PTO's position that combining a top-level domain like ".com" with a generic second-level domain, would necessarily create a generic trademark, and held that BOOKING.COM is a protectable trademark.
But obtaining trademark protection came with an added cost. If an applicant decides to challenge the PTO's ruling in district court the applicant must pay "all the expenses of the proceeding ... whether the final decision is in favor of such party or not." 15 U.S.C. § 1071(b)(3). Bound by Fourth Circuit precedent that a trademark applicant must pay the PTO's attorneys' fees following appeal to district court, Shammas v. Focarino, 784 F.3d 219 (4th Cir. 2015), the Court awarded the PTO its fees.
As noted by the Fourth Circuit, its holding diverges from the Federal Circuit's en banc ruling in NantKwest, Inc. v. Iancu, No. 16-1794 (Fed. Cir. July 27, 2018), which held that a patent applicant could seek district court review of a rejected application without having to pay the PTO's legal fees. The PTO has filed a petition for certiorari for U.S. Supreme Court review.
Lauren E. Willens, an associate in the Detroit Office, assisted in the preparation of this Alert.
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