In B&B Hardware, Inc. v. Hargis Industries, Inc., the U.S. Supreme Court found that administrative decisions of the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB) may have a preclusive effect on later civil cases. While the federal Lanham Act already provides the possibility of appeal of TTAB decisions, district courts have reached different conclusions on whether a TTAB decision creates issue preclusion, also referred to as “collateral estoppel,” in a later civil case.

In answering this question in the affirmative, the Court appears to be largely motivated by issues of judicial economy where essentially the same legal standard — likelihood of confusion — is applied upon essentially the same facts. However, the Court noted that issue preclusion would be improper when additional facts are relevant in the later civil proceeding. This can occur, for example, when the registrant uses its trademark for purposes beyond those recited in the trademark registration, because those facts can be considered in the civil proceeding but not by the TTAB.

Businesses need to be aware of the importance of the TTAB. When there is a dispute over trademarks, the TTAB has frequently been the best first step toward resolution. With this opinion from the U.S. Supreme Court, that seems to be the case.