In a decision released March 24, 2015, the Supreme Court held that the U.S. Patent and Trademark Office Trademark Trial and Appeal Board’s (TTAB) determination of likelihood of confusion in an opposition proceeding can bind federal courts in trademark infringement litigation. The case is B&B Hardware, Inc. v. Hargis Industries, Inc., ___ U.S. ___ (No. 13-352 March 24, 2015).
By way of background, B&B Hardware filed an opposition proceeding in the TTAB against Hargis Industries, Inc. for Hargis’s application for the mark “Sealtite.” B&B’s opposition was based on B&B existing registration for “Sealtight.” B&B also sued Hargis in federal court for trademark infringement. Both cases proceeded simultaneously.
The TTAB sustained B&B’s opposition, finding that Hargis’s application should not proceed to registration because of a likelihood of confusion with B&B pre-existing registration.
In district court, B&B then argued that the TTAB’s decision on likelihood of confusion should apply in the infringement action. The district court disagreed and the case proceeded to trial, where the jury found no likelihood of confusion. The Eighth Circuit Court of Appeals affirmed the district court.
B&B appealed to the Supreme Court, and the Supreme Court reversed, saying the federal courts were bound by the TTAB’s decision on likelihood of confusion pursuant to the doctrine of issue preclusion.
The Supreme Court rejected the argument that TTAB proceedings are supposed to be more streamlined than infringement litigation, saying all the Federal Rules of Civil Procedure and Evidence apply to TTAB proceedings. The Court also rejected the argument that the stakes are much lower in TTAB proceedings than infringement litigation, saying “there is good reason to think that both sides will take the matter seriously.” The Supreme Court also held that despite minor differences, the legal standard for proving a likelihood of confusion was the same for purposes of registration and infringement.
The Supreme Court was careful to note that issue preclusion will apply only in those instances where the trademark usage at issue in the TTAB (based on the application and/or registration language) is the same as the usage at issue in the infringement litigation. The Court stated if a mark owner uses its mark in ways that are materially unlike the usages in its application, then the TTAB is not deciding the same issue because the TTAB does not examine actual marketplace uses, which is the paramount issue in infringement litigation.
A party to a TTAB proceeding can no longer assume the TTAB is “litigation-lite” and that the real battle can always be fought later in infringement litigation. If the TTAB issues any substantive decision on the merits, the real battle may have already begun – and perhaps ended.