B&B Hardware, Inc. v. Hargis Industries, Inc.
Holding: A Trademark Trial and Appeal Board (TTAB) ruling refusing registration on likelihood of confusion grounds can have preclusive effect on a district court trademark infringement case when the elements of issue preclusion are met.
Petitioner B&B owns the registered trademark SEALTIGHT; respondent Hargis manufactures a similar metal fastener product and sought the trademark SEALTITE. B&B filed an opposition to Hargis’s proposed trademark with the TTAB. The TTAB denied Hargis’s trademark because it was “substantially identical” to B&B’s and was “used on closely related products” such that it would cause a likelihood of confusion. Hargis did not seek judicial review of this TTAB decision. However, in a co-pending district court litigation, the court, declining to afford the TTAB’s decision preclusive effect, sent the case to a jury, which found no likelihood of confusion. B&B appealed, but the Eighth Circuit affirmed, holding there was no preclusion because the TTAB used factors to analyze likelihood of confusion that were different from the factors required by Eighth Circuit law.
In a 7-2 opinion authored by Justice Samuel A. Alito (Justices Clarence Thomas and Antonin Scalia dissenting), the majority found the findings of the TTAB, an administrative agency, can have preclusive effect on a district court trademark infringement action when the ordinary elements of issue preclusion are met. The majority’s reasoning began with the established tenet that agency decisions rendered in a judicial capacity, where the parties are given an adequate opportunity to ligitate the issues, gives rise to a presumption of preclusive effect in district courts and that this principle applies to the TTAB. The court found likelihood of confusion is a single standard applicable to both trademark registration and infringement, and that preclusion can apply even though the TTAB’s confusion analysis uses a different set of factors from those used by federal courts in infringement cases.
The Court agreed that preclusion would not apply where a mark owner in a later infringement case relied on common-law usages of its registered mark on goods not within the scope of its registration because those usages would not have been considered by the TTAB. However, the Court added an important caveat: if the infringement case involves usages that are “materially the same as the usages included in the [plaintiff’s] registration application,” then the likelihood of confusion issue will be the same in the TTAB and the federal court, and the TTAB determination will be preclusive. Thus, “trivial variations” will not defeat preclusion, nor will an infringement court’s belief that the TTAB gave too much or too little emphasis to particular factors in analyzing confusion.
The B&B Hardware decision is likely to affect how future trademark litigation is conducted. For example, mark owners may have to devote more resources to TTAB opposition proceedings, treating them with as much importance as infringement lawsuits; and if they lose at the TTAB level, they will need to consider an appeal or face the risk that a district court will find the TTAB’s conclusions on confusion to be preclusive. For a fuller analysis, including additional implications of this important ruling, please visit this page.
CASES TO WATCH
Google, Inc. v. Vederi, LLC
Issue: Whether, in construing patent claims that have been amended, the district court should presume that the amendment narrowed the scope of the claim (i.e., strict construction), or should presume that the amendment maintained the scope of the claim and require that any narrowing be clear and unmistakable.
Vederi sued Google and alleged that Google’s Street View product infringes four related patents claiming a system and method allowing a user “to visually navigate [an] area from a user terminal.” During prosecution of the patents, the applicant amended certain claims to overcome an examiner’s rejection. Google argued that a particular amendment narrowed the scope of the claim. The district court agreed.. On appeal, the Federal Circuit reversed the district court’s claim construction on the ground that there was “no clear and unambiguous disavowal” of certain subject matter when the applicant amended the claims.
Google argues that the Federal Circuit erred by presuming that an amendment does not narrow the scope of the claim. According to Google, Supreme Court precedent presumes that a claim amendment narrows the claim’s scope and a district court therefore must strictly construe claim amendments made to obtain a patent. Vederi argues that the Federal Circuit did not adopt such a presumption here and that Google conflates the standards applicable to claim construction and the doctrine of equivalents.
Status: Cert. pending.