IP Law Daily In Booking.com trademark case, High Court vacates fee award to USPTO
Tuesday, July 7, 2020

In Booking.com trademark case, High Court vacates fee award to USPTO

By Thomas Long, J.D.

The case was remanded for consideration in light of Peter v. NantKwest, Inc., in which the Court held that a Patent Act "expenses" provision did not overcome the presumption that each litigant pays its own attorney fees.

The U.S. Supreme Court has vacated the portion of the judgment of the U.S. Court of Appeals in Richmond holding a provision of the Lanham Act entitled the USPTO an award of attorney fees it incurred in litigation with online travel agency Booking.com, B.V., over registrability of the mark BOOKING.COM. The Court remanded the case for further consideration in light of the recent decision in Peter v. NantKwest, Inc., 589 U. S. ___ (2019), in which the Court held that a similar provision of the Patent Act did not authorize an award of attorney fees to the USPTO in litigation over a rejected patent application. On June 30, the Court held that BOOKING.COM was not generic and could be registered for travel and tourist agency services and hotel and resort reservations services (Booking.com, B.V. v. USPTO, July 2, 2020, per curiam).

USPTO refusal to register. The dispute arose when Netherlands-based Booking.com filed four applications under Section 66(a) of the Lanham Act for extension of protection in the United States of its BOOKING.COM mark. The trademark examining attorney refused registration on the ground that the mark was generic for the applicant’s services, and alternatively, that the mark was merely descriptive and without acquired descriptiveness. The Trademark Trial and Appeal Board affirmed the refusals.

District court challenge. Booking.com appealed to the federal district court in Alexandria. The district court reversed the genericness finding, concluding that the term BOOKING.COM was descriptive. The district court then determined that BOOKING.COM was registrable as a matter of law, but only for hotel reservation services, because Booking.com produced sufficient evidence of acquired distinctiveness in relation to those service. The district court subsequently awarded the USPTO its "expenses" incurred in the proceeding under Section 21(b)(3) of the Lanham Act, 15 U.S.C. §107l(b)(3), including $51,473 in employee fees and $21,750 in expert fees.

Appellate court review. On appeal, the Fourth Circuit affirmed the district court in registrability but upheld the fee award to the USPTO. Section 21(b)(3) of the Lanham Act allows a trademark applicant to seek de novo district court review of an unfavorable Trademark Trial and Appeal Board decision in an ex parte case. Section 21(b)(3) further provides: "In any case where there is no adverse party … unless the court finds the expenses to be unreasonable, 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.…" 15 U.S.C. § 1071(b)(3). The Fourth Circuit declined to revisit its precedent holding that the plain meaning of the phrase "all expenses of the proceeding" included reasonable attorney fees.

The USPTO petitioned for certiorari to challenge the Fourth Circuit’s decision on registrability of "generic.com" marks, which led to the June 30 decision. Booking.com also filed a petition for certiorari seeking review of the portion of the Fourth Circuit’s opinion upholding the award of attorney fees to the USPTO.

Questions presented. In its petition, filed April 10, 2019, Booking.com asked:

  • Does the presumption under the American Rule that "[e]ach litigant pays his own attorneys’ fees, win or lose, unless a statute or contract provides otherwise," Baker Botts LLP v ASARCO LLC, 135 S.Ct 2158, 2164 (2015), apply to Section 1071(b)(3)?
  • Is the language "all expenses of the proceeding" sufficiently "specific and explicit" to demonstrate Congressional intent to depart from the American Rule?
  • Are fixed costs of the government attorneys that would have been paid irrespective of any specific litigation sufficiently "of the proceeding" to be encompassed by Section 1071(b)(3)?
  • Does requiring litigants seeking to vindicate their statutory rights under Section 1071 to pay the government’s attorneys’ fees, win or lose, infringe their rights under the First Amendment to petition the government for redress of grievances?

Peter v. NantKwest. The decision in NantKwest was issued December 11, 2019. In that case—a dispute arising from the USPTO’s rejection of a patent application related to a cancer-treatment method—the Court held that Patent Act Section 145, 35 U.S.C. § 145, did not entitle the USPTO to recover the salaries of its legal personnel that it incurred when its employees, including attorneys, defended the agency in district court litigation. In the Court’s view, the phrase "All the expenses of the proceedings" in Section 145 did not authorize payment of the USPTO’s legal fees. The statutory language did not overcome the presumption against fee-shifting under the "American Rule," a bedrock principle standing for the proposition that litigants pay their own fees, win or lose, unless a statute or contract provides otherwise.

According to the Court, "expenses of the proceedings" would not have been commonly understood to include attorney fees at the time Section 145 was enacted, and the term "all" did not transform the term "expenses" to reach fees when it would not otherwise have covered them. The Court also noted that when Congress intended to provide for awards of attorney fees in the Patent Act, it had stated so explicitly. The Court affirmed a decision of the U.S. Court of Appeals for the Federal Circuit, which held in an en banc opinion that patentee NantKwest was not required to pay the USPTO’s requested personnel expenses after prevailing in an appeal from an adverse decision by Patent Trial and Appeal Board.

Order vacating and remanding. In its July 2 order, the Court granted Booking.com’s petition for certiorari, vacated the portion of the Fourth Circuit’s opinion upholding the fee award, and remanded for further consideration in light of NantKwest.

The case is Dkt. No. 18-1309.

Attorneys: Jonathan E. Moskin (Foley & Lardner LLP), David H. Bernstein (Debevoise & Plimpton LLP) for Booking.com B.V. Noel J. Francisco, U.S. Department of Justice, for the USPTO.

Companies: Booking.com B.V.

MainStory: TopStory TechnologyInternet Trademark GCNNews

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