“Issue Preclusion” is a legal doctrine stating that litigants should not get two opportunities to argue the same issue. Now according to the U.S. Supreme Court, if the TTAB finds likelihood of confusion between two marks, a federal district court should honor such determination and not allow the parties to reargue the issue.

On March 24, 2015, the Supreme Court held in B&B Hardware, Inc. v. Hargis Industries, Inc., 13-352 (U.S. Mar. 24, 2015) that decisions of the Trademark Trial and Appeal Board (“TTAB”) can have preclusive effect in infringement litigation brought in federal district courts. In particular, the Supreme Court stated “So long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply.” Slip op. at 22. But the Supreme Court also acknowledged limitations to this rule stating “if the TTAB does not consider the marketplace usage of the parties’ marks, the TTAB’s decision should “have no later preclusive effect in a suit where actual usage in the marketplace is the paramount issue.” Slip op. at 18.

In 1996, Hargis Industries, Inc. (“Hargis”) applied to register the mark SEALTITE. (“B&B”) opposed the application on the basis that the mark SEALTITE was likely to cause confusion with B&B’s registered mark SEALTIGHT. During the opposition proceeding B&B brought an infringement action against Hargis in federal district court. Later, the TTAB denied registration to Hargis’s SEALTITE mark on the basis that SEALTITE was likely to cause confusion with B&B’s SEALTIGHT mark. After the TTAB decision, B&B moved for summary judgment that the TTAB’s finding of likelihood of confusion should be given preclusive effect. The district court denied B&B’s request for summary judgment. The jury found no likelihood of confusion between the marks SEALTITE and SEALTIGHT. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed, holding that preclusion was unwarranted because the TTAB and the court used different factors to evaluate likelihood of confusion, the TTAB placed too much emphasis on the appearance and sound of the two marks, and Hargis bore the burden of persuasion before the TTAB while B&B bore it before the District Court.

In its decision, the Supreme Court stated “[c]ontrary to the Eighth Circuit’s conclusion, the same likelihood-of-confusion standard applies to both registration and infringement. The factors that the TTAB and the Eighth Circuit use to assess likelihood of confusion are not fundamentally different, and, more important, the operative language of each statute is essentially the same.”

What does all this mean? The stakes in trademark oppositions and cancellations are probably raised since TTAB decisions can now be used as grounds for finding infringement in federal district court.

Copyright 2015, Buche & Associates, P.C. and Scott Compton.  This article was written by Scott Compton, J.D., who is of counsel to Buche & Associates, P.C.  Scott Compton’s practice is in the realms of litigation and acquisition of patents and trademarks.  Any questions can be emailed to scompton@buchelaw.com

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