The United States Supreme Court ruled today that a Trademark Trial and Appeal Board (“TTAB”) ruling on likelihood of confusion can preclude later litigation on the same issue in federal courts. This highly anticipated and long-awaited decision, penned by Justice Alito, ends nearly two decades of litigation on whether the TTAB’s refusal to register an applied-for mark on the basis that it is likely to be confused with a prior registered mark is enough to preclude a federal court from coming to a different conclusion in the infringement context. The court said it is, so long as the ordinary elements of issue preclusion are met.
Preceding today’s decision was a nearly twenty year dispute between B&B Hardware and Hargis Industries over the marks used in connection with their metal fasteners. In 2003, B&B Hardware, the owner of the registered mark SEALTIGHT filed an opposition proceeding before the TTAB against Hargis Industries' application for registration of the mark SEALTITE. While the TTAB affirmed the refusal to register on the basis of likelihood of confusion, in a contemporaneous infringement action, the U.S. District Court for the District of Arkansas denied any preclusive effect to the TTAB determination. On appeal, the U.S. Court of Appeals for the Eighth Circuit, affirmed the decision, reasoning that the likelihood of confusion analysis for opposition purposes is a different issue from likelihood of confusion for infringement purposes.
The preclusive effect at interest in B&B Hardware is based upon the idea that later courts should honor the first decision on a matter that has actually been litigated. In the trademark context, however, issue preclusion has been historically unclear. Not only are there differences in how the circuits interpret the preclusive effect of TTAB rulings, but there are also inherent differences in how the TTAB and federal courts analyze likelihood of confusion. While the TTAB determines likelihood of confusion upon whether likely confusion exists between the potential use of marks in a trademark registration or application, federal courts decide likelihood of confusion based upon how the mark is actually used in the marketplace. In addition, there are procedural differences. Testimony in TTAB proceedings occur by way of depositions submitted on paper, and discovery is usually limited and may not include the range of evidence typically submitted in the infringement context.
Despite questions from some Justices during oral arguments that seemed to hone in on the contrast between TTAB registration proceedings and civil infringement proceedings, the Court made clear today that the analytical and procedural differences between the two are in fact not so different. If a party in a TTAB proceeding, however, faces the possibility that it will be precluded from contesting confusion in the future, then this will likely influence litigation strategies going forward. Brand owners and their counsel will be analyzing the implications of this decision, the associated costs and ramifications of choosing one type of proceeding over another, in brand new ways.