On March 24, 2015, the Supreme Court issued a rare opinion in a trademark matter. In B&B Hardware v. Hargis Industries, the Court held that findings made by the Trademark Trial and Appeal Board (“TTAB”) of the Patent and Trademark Office can have a “preclusive effect” in subsequent infringement proceedings in federal court.
The case arose out of an ongoing dispute between B&B Hardware (“B&B”) and Hargis Industries (“Hargis”) over the mark SEALTITE. In 1993, B&B federally registered the mark SEALTIGHT for its fasteners used in the aerospace industry. Later, in 1996, Hargis applied for federal registration of the mark SEALTITE for its self-drilling screws used in the construction industry. Although the two companies manufacture different products, for different industries, B&B opposed the Hargis SEALTITE mark on grounds that it was confusingly similar to B&B’s previously registered SEALTIGHT mark.
While the two parties were litigating the “confusingly similar” issue before the TTAB, B&B brought a trademark infringement suit against Hargis in federal court. Before the infringement litigation proceeded to trial in federal court, the TTAB issued a final decision rejecting Hargis’s registration application, finding a likelihood of confusion between the two marks. B&B then argued that Hargis could not contest likelihood of confusion because the TTAB registration decision was binding on the federal court. Both the federal court and the Court of Appeals for the Eighth Circuit held that the TTAB ruling was not binding on the federal court. Ultimately, the issue was presented to the Supreme Court.
The Court ruled that issue preclusion can apply to TTAB registration determinations if they meet the ordinary elements of issue preclusion and if the usages adjudicated by the TTAB are materially the same as those adjudicated by the federal court. The Court, however, was quick to recognize that issue preclusion will not always apply, as many registration decisions will not satisfy the ordinary elements of issue preclusion and that contested registration findings of likelihood of confusion in front of the TTAB are often decided upon a comparison of the marks in the abstract, apart from their marketplace usage. In doing so, the Court raised many uncertainties, leaving open the question as to when exactly issue preclusion applies. Notwithstanding the uncertainties, however, the Court’s holding made evident that TTAB decisions now carry higher implications than ever.
Faced with the issue of “confusing similarity” between your trademark and the mark of a third party, you will want to seek counsel as to how best to resolve that issue. Your Davis & Kuelthau attorneys can assist you with that. For more information on trademarks and other intellectual property matters, please contact your Davis & Kuelthau attorney or co-author Joseph S. Heino at 414.225.1452 / jheino@dkattorneys.com.
Authored by intellectual property law clerk, Xheneta Ademi, and intellectual property attorney and shareholder, Joseph S. Heino.