A recent decision of the Supreme Court creates broader effect for decisions of the Trademark Trial and Appeal Board (“TTAB”), suggesting that parties may expend greater effort and expense in opposition and cancellation actions before the TTAB.
The TTAB, part of the U.S. Patent and Trademark Office, provides an administrative venue for resolving disputes regarding the registration of an applied-for trademark (an opposition action) and the cancellation of an existing trademark registration (a cancellation action). Decisions of the TTAB are limited to the right to federal registration for a mark, not the right to use the mark in commerce or issues of trademark infringement, which are decided in court. However, the Supreme Court’s decision indicates those TTAB rulings will sometimes have broader effect.
The case involves a principle called “issue preclusion.” According to that principle, a party that has litigated an issue and had that issue decided against it cannot re-litigate the same issue in a later proceeding. Instead, it will be bound by the decision in the earlier proceeding.
The recent case, B&B Hardware v. Hargis Indus., involved a trademark opposition before the TTAB running in parallel with trademark infringement litigation over the marks SEALTITE and SEALTIGHT, which both parties used with different types of fasteners. The TTAB barred Hargis from registering its SEALTITE mark, finding that the mark created a likelihood of confusion with B&B’s previously-registered SEALTIGHT mark. In the litigation, the Federal appellate court held that a TTAB decision that two trademarks are (or are not) confusingly similar can never bind a later court in an infringement proceeding. The Supreme Court disagreed and held that an agency decision may preclude later court proceedings if the TTAB decides an issue that is “materially similar” to the issue before the court.
For trademark owners, this decision suggests that disputes before the TTAB may become more heated. A trademark owner may have only a moderate interest in maintaining its trademark registration and preventing others from registering similar marks. However, that same owner may be deeply troubled by widespread use of similar marks. Alternatively, an applicant may not be particularly concerned if it is not able to register its mark because of a TTAB finding of likelihood of confusion with a mark that is already registered, but it might be very concerned that the TTAB’s finding could bind it in infringement litigation, where it could be subject to an award of damages or an injunction preventing its continued use of its mark.
The Supreme Court was careful to note that TTAB decisions will not always be binding in later litigation. They may not have binding effect for various reasons, especially when the TTAB decided an issue that is materially different from the issue presented in a later infringement lawsuit. For example, the way a mark is actually used in the market may make confusion either more or less likely because of graphics associated with the mark, but unless those graphics were reflected in the registrations or applications beforeds the TTAB, they would not have been considered in an opposition proceeding. That difference might well prevent the TTAB’s decision from binding a court.
When decisions of the TTAB were considered only to affect the registration of a mark, owners may have been willing to abandon a trademark application or registration or put less than maximum effort into an opposition or cancellation proceeding knowing that the TTAB decision would not affect the owners’ commercial use of their marks. The Supreme Court’s B&B Hardware decision indicates that a TTAB decision concerning a likelihood of confusion between marks may, in some cases, bind later courts on the same issue. Instead of a TTAB decision only affecting a federal registration for a mark, now the decision could potentially control the outcome of a much more critical trademark infringement litigation. As such, trademark owners may begin to routinely expend greater effort in TTAB proceedings, increasing the time and expense of such proceedings.