B&B and Hargis have long contested each other’s rights in the mark "SEALTIGHT" for fasteners. B&B was the first to the market and registered the mark first. The Trademark Office refused Hargis’s later registration based on a likelihood of confusion with B&B's senior mark. Hargis attempted to cancel B&B’s registration. The TTAB refused to cancel the registration and sustained B&B’s opposition to Hargis’ application.
In a subsequent action for infringement by B&B against Hargis, the district court refused to apply issue preclusion on the likelihood of confusion question, and the jury found Hargis did not infringe B&B’s mark. The Eighth Circuit affirmed the district court’s refusal to give the TTAB’s findings preclusive effect, reasoning the TTAB is not an Article III court, and the likelihood of confusion issues are different in the two forums—the TTAB decides whether a registration should be issued for a mark, while courts generally decide whether someone is infringing a mark.
The Supreme Court reversed the Eighth Circuit’s decision and held that, so long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply. Even though the TTAB and courts are weighing different things, their standards are “not fundamentally different, and, more important, the operative language of each statute is essentially the same.” The Court observed, however, that issue preclusion will not apply for “a great many” TTAB decisions, because the “ordinary elements” of preclusion will not have been met. For example, “[i]f the TTAB does not consider the market-place usage of the parties’ marks, the TTAB’s decision should have no later preclusive effect in a suit where actual usage in the marketplace is the paramount issue.”
This case, to some extent, resolves an inter-circuit split on the question of TTAB issue preclusion and clarifies that circuits should not apply a bright-line ban like the Eighth Circuit’s. The Court observed: “There is no categorical reason why registration decisions can never meet the ordinary elements of issue preclusion. That many registrations will not satisfy those ordinary elements does not mean that none will.”
B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. ____, No. 13-352 (March 24, 2015).