The United States Supreme Court has decided a question of trademark law that is important to brand owners. Opposition proceedings in the Trademark Trial and Appeal Board (TTAB) often turn on whether a trademark applied for is likely to be confused with an already registered trademark. The owner of the registered trademark may separately sue for infringement in a federal court, claiming that the use of the junior trademark creates a likelihood of confusion. The Supreme Court held that if the TTAB rules first on likelihood of confusion, that decision will be binding in the later infringement action, provided that: (1) the ordinary elements of issue preclusion are satisfied; and (2) the plaintiff in the infringement action does not claim use of the registered trademark on goods other than those listed in its registration. B&B Hardware, Inc. v. Hargis Industries, Inc., No. 13-352, 575 U.S., 2015 WL 1291915 (March 24, 2015).
B&B Hardware’s holding has the potential to change trademark litigation and enforcement strategies. It could make TTAB oppositions more important and expensive. Until now, parties have often spent relatively limited resources on TTAB oppositions as compared to an infringement action. However, the TTAB may become the arena where the crucial issue of likelihood of confusion is definitively decided. With the higher stakes of preclusion, parties will now consider putting their strongest case forward at the TTAB. Typically streamlined opposition proceedings may evolve into something more like full-scale litigation, with more discovery disputes and requests for oral arguments. Losers before the TTAB may be more likely to seek de novo court review of an adverse TTAB determination on confusion.
Registered trademark owners who believe their chances of success are greater in federal court may consider a three-step process where trademarks applied for are already being used: (1) bring an opposition proceeding in the TTAB; (2) sue for infringement in federal court before the TTAB addresses the confusion issue; and (3) then immediately move to suspend the TTAB proceeding.
In addition, the types of evidence submitted to the TTAB may also change: parties may now urge the TTAB to consider marketplace uses and surveys based on how trademarks are actually used on goods when determining likelihood of confusion.
The exceptions to preclusion identified in B&B Hardware have the potential to create new kinds of disputes in infringement actions. For example, to avoid preclusion, a party may contend that the TTAB’s bar on live testimony prevented it from effectively attacking the credibility of an adverse witness on issues such as intent or fraud.
The full impact of B&B Hardware will become clearer as the courts and TTAB begin applying the decision, and litigation strategies will evolve accordingly. In the meantime, trademark owners and applicants should carefully analyze their options on a case-by-case basis. Each trademark will present a different set of facts and strategic considerations, and there will not be a one-size-fits-all answer to where likelihood of confusion issues should be litigated.