IP and Tech Law Alert: Recent Supreme Court Case Impacts Trademark Enforcement Strategy

April 23, 2015

In a case with implications that reach beyond trademark law, the Supreme Court of the United States held that a prior likelihood of confusion determination by the Trademark Trial and Appeal Board (“TTAB”) can have preclusive effect in subsequent trademark litigation in district court. See B&B Hardware, Inc. v. Hargis Indus., Inc., __ U.S. __ (March 24, 2015). While acknowledging that collateral estoppel would not apply in many cases, Justice Alito, writing for the seven-justice majority, nonetheless made clear that “when the TTAB adjudicates a [trademark] usage within its authority, that adjudication can ground issue preclusion.” (emphasis in original).

The B&B Hardware case stems from a trademark dispute between two companies, both of which manufacture metal fasteners; one sells fasteners for use in the aerospace industry while the other sells fasteners for use in the construction trade. The senior mark holder, the aerospace fastener company, registered the trademark SEALTIGHT in 1993. The junior mark holder, the construction fastener company, sought to register its trademark SEALTITE in 1996. When the PTO published the SEALTITE trademark in the Official Gazette—in other words, it allowed the trademark but then asked if there was any public opposition to the application—the senior mark holder filed an opposition proceeding with the TTAB. The TTAB agreed with the senior mark holder and found SEALTITE confusingly similar to SEALTIGHT and refused to register the SEALTITE trademark. In a parallel district court infringement action, the senior mark holder argued that issue preclusion bars reconsideration of the likelihood of confusion analysis. The district court disagreed and the appeal that culminated in the Supreme Court case ensued.

Although the dissent sharply disagreed, the Court passed over the constitutional Article III question and instead focused its analysis on the juxtaposition of TTAB proceedings and “ordinary civil litigation.” The Court honed in on the substantive question: whether the legal issue to be decided by the TTAB in the opposition proceeding was similar to the issue decided by a district court in an infringement proceeding. (After all, issue preclusion only makes sense when the decided issues are the same). Ultimately, the Court held that the question is the same: is there a likelihood of confusion if the marks are used in the same goods in the same channels of trade?

To be sure, in a TTAB opposition proceeding, the TTAB must refuse registration of a mark that “so resembles a mark . . . as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive . . .”. See 15 U.S.C. § 1052(d) (emphasis added). Likewise, in an infringement action, the district court must decide whether the defendant’s use of the mark is “likely to cause confusion, or to cause mistake, or to deceive.” See 15 U.S.C. § 1114(1)(a) (registered mark); 15 U.S.C. § 1125(a)(1)(A) (unregistered mark).

The Court’ holding in B&B Hardware should instruct parties seeking to oppose a registration before the TTAB. If a mark holder is going to spend the money to oppose the registration of a mark at the TTAB then it should not do so thinking that it will get another bite at the apple. If cost is a concern—as is often the case for a company that has a substantial IP portfolio to police—then it should consider whether it makes sense to file an opposition proceeding at all.