On March 24, 2015, the US Supreme Court ruled in a 7-2 decision that federal court decisions on the “likelihood of confusion” in trademark cases can be precluded by earlier rulings by the Trademark Trial and Appeal Board (TTAB).
The case arose out of an attempt by Hargis Industries, Inc. to register a trademark for SEALTITE with the US Patent and Trademark Office (USPTO) in 1996.
B&B Hardware, Inc. opposed the registration, claiming that the mark was too similar to its own SEALTIGHT trademark, registered in 1993.
Space Shuttles and A-frames
Both companies manufacture metal fasteners. B&B makes them for the aerospace industry, whereas Hargis makes them for the construction industry. According to the Supreme Court’s decision,
Although there are obvious differences between space shuttles and A-frame buildings, both aerospace and construction engineers prefer fasteners that seal things tightly. Accordingly, both B&B and Hargis want their wares associated with tight seals. A feud of nearly two decades has sprung from this seemingly commonplace set of facts.
The TTAB concluded that the Hargis mark should not be registered because of the likelihood of confusion between the two marks. Hargis did not seek judicial review of that denial.
Later, B&B sued Hargis for trademark infringement. B&B argued that Hargis was precluded from contesting the “likelihood of confusion” issue in court because of the TTAB’s earlier decision.
The district court disagreed, and the Eighth Circuit affirmed, on the grounds that the TTAB and the court used different factors in ruling on likelihood of confusion:
- The TTAB put “too much” emphasis on the sounds and appearances of the marks.
- Hargis bore the burden of persuasion before the TTAB, whereas B&B bore it before the court.
The Supreme Court concluded that when the uses of the trademarks at issue are materially the same before the TTAB as they are before a federal district court, issue preclusion should apply. In other words, the TTAB’s ruling would govern later court proceedings on the uses of same mark.
One Bite at the Apple
As Justice Alito wrote in his opinion,
Sometimes two different tribunals are asked to decide the same issue. When that happens, the decision of the first tribunal usually must be followed by the second, at least if the issue is really the same. Allowing the same issue to be decided more than once wastes litigants’ resources and adjudicators’ time, and it encourages parties who lose before one tribunal to shop around for another.
Significance of the Ruling
According to Leech Tishman IP lawyer, Thomas J. Peistrup, the immediate impact of the Supreme Court’s holding will be an added level of earnestness with which trademark owners approach TTAB proceedings:
“This ruling should dispel any temptation to regard TTAB rulings as only affecting registration, and not determinative on the use of a mark.”
Peistrup added that the scope of the ruling is not limited to trademark decisions by the TTAB.
“Where a government administrative agency adjudicates the same issues that are later presented in federal court, those issues may be deemed to have already been conclusively decided.”
The case was B&B Hardware, Inc. v. Hargis Industries, Inc. d/b/a Sealtite Building Fasteners et al., No. 13-352, slip op. (March 24, 2015) available at http://www.supremecourt.gov/opinions/14pdf/13-352_c0n2.pdf.