B&B Hardware, Inc. v. Hargis Industries, Inc. (No. 13-352)
March 25, 2015

 
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The Decision

The Supreme Court issued a landmark trademark decision yesterday addressing whether a finding of likelihood of confusion by the Trademark Trial and Appeal Board ("TTAB") can preclude re-litigation in federal court. The Court ultimately held that “[s]o 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.” Thus, the Court's decision included a key caveat. Issue preclusion may apply, but only if “a mark owner uses its mark in ways that are materially the same as the usages included in its registration application.” That being said, “if a mark owner uses its mark in ways that are materially unlike the usages in its application, then the TTAB is not deciding the same issue.” The Court further explained that “trivial variations” are not “material.” District courts may have difficulty applying this new standard and determining whether uses in the marketplace are materially the same as usages in trademark applications. This decision will also undoubtedly influence trademark owners’ strategies for battling trademark disputes in both the TTAB and federal courts. More background on the decision is below.

Background

B&B Hardware registered the trademark SEALTIGHT for fasteners. Years later, Hargis applied to register the trademark SEALTITE for fasteners. B&B opposed Hargis’ application, and the TTAB sustained the opposition and determined that SEALTITE could not register because of a likelihood of confusion with B&B’s SEALTIGHT mark. In a related infringement suit in federal court, B&B argued that Hargis could not contest the likelihood of confusion because of the preclusive effect of the TTAB decision. The district court disagreed, and a jury found that there was no likelihood of confusion. B&B appealed to the Eighth Circuit, and the Eighth Circuit affirmed holding that the TTAB’s findings on the likelihood of confusion issue did not address the same issues as the district court. Yesterday, the Supreme Court overturned the Eighth Circuit finding that an agency decision can ground issue preclusion, that nothing in the Lanham Act bars the application of issue preclusion, and that trademark registration decisions can meet the ordinary elements of issue preclusion. Still, the Court included important caveat. Issue preclusion may apply, but only if “a mark owner uses its mark in ways that are materially the same as the usages included in its registration application.” On the other hand, “if a mark owner uses its mark in ways that are materially unlike the usages in its application, then the TTAB is not deciding the same issue.”

To obtain more information, please contact Mary Innis at minnis@innislaw.com or Lucy Mackey at lmackey@innislaw.com



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