In its second trademark decision this year, the Supreme Court in B&B Hardware, Inc. v. Hargis Industries, Inc. has held that Trademark Trial and Appeal Board ("TTAB") decisions may be given preclusive effect in trademark infringement cases litigated in federal court. TTAB proceedings resolve trademark registration disputes at the Patent and Trademark Office, sometimes by determining if the trademark in dispute is likely to cause confusion, the same question that must be resolved in federal court trademark infringement cases.
In 2002, B&B Hardware Inc., ("B&B") filed an opposition proceeding at the TTAB, opposing registration of Hargis Industries Inc.’s ("Hargis") trademark "SEALTITE." B&B claimed that SEALTITE created a likelihood of confusion with B&B's registration for "SEALTIGHT". At the time the opposition proceeding was filed, litigation brought by B&B against Hargis for trademark infringement was pending in federal district court. Before the district court rendered its decision on likelihood of confusion, the TTAB found in favor of B&B, holding that Hargis's SEALTITE mark was likely to cause confusion with B&B's SEALTIGHT mark and rejected the registration application. Based on the TTAB finding, B&B argued in the district court that the issue regarding the likelihood of confusion had already been resolved in its favor. The district court disagreed with B&B's argument and found no likelihood of confusion created by Hargis's use of SEALTITE. On appeal to the Eighth Circuit, the district court decision was affirmed.
The Supreme Court found that nothing in the Lanham Act barred the application of issue preclusion where the ordinary elements of issue preclusion are met. Hargis argued that preclusion should not apply because the TTAB is a federal agency and not a court and because TTAB applies a different standard than a court does when reviewing likelihood of confusion and uses different procedures to resolve disputes. The Supreme Court rejected these arguments, holding that agency decisions may be given preclusive effect and that the standards applied and procedures used in TTAB proceedings are not fundamentally different from those found in district court proceedings.
Impact Of The Supreme Court Holding
The Supreme Court's decision will force trademark owners and their lawyers to rethink their approach to registration of trademarks. Prior to the Supreme Court's decision, it was generally assumed that parties litigating registration disputes at the Patent and Trademark Office and the TTAB would not need to muster all the resources and evidence that they would normally use in federal court proceedings. Now, parties to registration disputes must be aware that the TTAB's registration decision may end the debate and may mean that the decision made about whether a trademark may be registered may be the final word as to whether a trademark’s use infringes another mark.