Yesterday, in B&B Hardware v. Hargis Industries, the Supreme Court applied ordinary principles of issue preclusion to Federal trademark litigation that follows contested proceedings in the Trademark Trial and Appeal Board (“TTAB”). Specifically, the Court held that “a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met.” In so doing, the Court rejected various constitutional and statutory arguments that issue preclusion should not apply. The Court pointed out, however, that “for a great many registration decisions issue preclusion obviously will not apply because the ordinary elements will not be met.” “For those registrations,” the Court emphasized, “nothing we say today is relevant.”
The Supreme Court’s 7-2 decision in B&B Hardware could have a profound effect on Federal trademark litigation, depending on the issues actually litigated in the TTAB. The decision will also impact strategic decisions parties must make on, for example, whether and how to litigate in the TTAB, whether to appeal adverse rulings in the TTAB, and whether to initiate litigation in Federal Court and how to defend it. B&B Hardware is an important decision that will be cited often as both a sword and a shield in Federal litigation under the Lanham Act.