Brand owners long have had several strategic alternatives when a competitor or other party seeks to register a mark that may infringe, or at least dilute the brand equity in, the owner’s trademark. The brand owner can sue in federal or state court, seeking not only to prevent registration of the conflicting mark but to obtain an injunction and damages. Alternatively, the brand owner can oppose registration of the mark, or petition to cancel an existing registration, through the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB). While monetary damages and injunctive relief are not available through TTAB opposition and cancellation proceedings, these proceedings are viewed as less expensive and potentially quicker to resolve. And, until now, there was at least the perception that the TTAB’s decision would not bind a court handling a later suit involving the same marks, meaning that the brand owner might have two bites at the litigation apple. After this week’s U.S. Supreme Court decision in B&B Hardware, Inc. v. Hargis Industries,Inc., that second bite may not always be available.
The B&B Hardware case culminated a litigation saga spanning over 10 years. The Supreme Court resolved the question of whether and when a TTAB decision in an opposition proceeding can bind a court in later litigation and preclude re-litigation of the issues raised in the opposition. The Court held that, in certain situations, a decision rendered by the TTAB in an opposition proceeding can have a binding impact on a separate and distinct trademark infringement lawsuit between the same parties over the same mark. In particular, the Court held that if a TTAB decision hinges on a finding of “likelihood of confusion” between the applicant’s and opposer’s trademarks, then a court adjudicating a trademark infringement dispute between the same parties over the same marks may be required to adopt the TTAB’s finding with respect to likelihood of confusion because the legal standard for likelihood of confusion is the same in both the registration and infringement contexts. In other words, where B&B Hardware is controlling, the TTAB’s decision on registrability may dictate the outcome of the infringement lawsuit.
So what does this decision mean to brand owners? A brand owner seeking to prevent registration of or seek to cancel a registration for a conflicting mark must carefully weigh the strategic advantages and disadvantages of initiating an opposition or cancellation proceeding at the TTAB versus resorting directly to litigation. By the same token, a brand owner facing third-party opposition of its federal trademark registration application must recognize that it may be advisable to pursue judicial review of an adverse outcome at the TTAB if an infringement suit involving the opposed mark is pending or anticipated. While the exact implications of the Supreme Court’s decision will be fleshed out as courts apply the new standard on claim preclusion, brand owners now face a more significant set of consequences when deciding where to pick the first fight.