In a well-written opinion, the Supreme Court ruled this week that a final TTAB decision on likelihood of confusion regarding a particular mark can be binding in separate trademark infringement litigation. The Court reversed a contrary decision of the 8th Circuit Court of Appeals.
The issue in B&B Hardware, Inc. v. Hargis Industries, Inc., No. 13-352, March 24, 2015, (for earlier blog click here) addressed whether a final TTAB decision, in this instance involving likelihood of confusion of a challenged mark, could bind the relevant parties in infringement litigation. This issue involves the legal concept of collateral estoppel or issue preclusion. The general rule is that “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Collateral estoppel is a doctrine typically applied to proceedings in separate courts. Here, the TTAB decision arose out of an administrative proceeding, not a court proceeding.
Rejecting a number of arguments which the respondent presented, the Court first relied upon a line of Supreme Court authority applying collateral estoppel effect to various administrative agencies and decisions. The Court also rejected the assertion that the Lanham Act itself implicitly precluded application of collateral estoppel to TTAB decisions. Lastly, respondent argued that the standard for evaluating likelihood of confusion before the TTAB was different than before a district court. As a general matter, the Court did not see a significant difference in the standards. To the extent there truly was a substantively different analysis, the relevant party could argue that collateral estoppel should not apply because the district court was determining facts or applying a legal analysis different than that of the TTAB.
What this decision presages is a likely increase in the number of court reviews of TTAB decisions. Separate from infringement actions, a district court may review TTAB decisions de novo. Alternatively, parties may appeal TTAB decisions directly to the court of appeals. Now knowing that TTAB decisions that are not reviewed, either in the district court or at the appeals level, can have collateral estoppel effect in infringement actions, parties need to seriously consider whether to accept the TTAB decision as final or seek court review.