The stakes of Trademark Trial and Appeal Board (TTAB) proceedings have just been (perhaps slightly) raised by the U.S. Supreme Court's opinion in B&B Hardware, Inc. v. Hargis Industries, Inc., which held that "so long as other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply."
The immediate likely result of this opinion is that trademark rights owners will now be looking at TTAB opposition and cancellation proceedings more closely, since a determination by the Board can have a more serious, lasting effect on trademark rights. Parties in federal court may now legitimately argue that since the TTAB has found (or not found) a likelihood of confusion with respect to a particular trademark, a party is estopped from litigating the issue again in federal court.
Up until the Supreme Court's opinion in B&B Hardware, the effect of TTAB determinations on federal court litigation has not been very clear.
In TTAB proceedings, it is well known that the Board relies mostly on the goods and services identified in the trademark application or registrations at issue in making a likelihood of confusion determination (i.e. if the opposed mark registers, is there likely to be confusion as to source, sponsorship or affiliation?). However, many times, a party's actual use of the mark in commerce may differ from what is identified in the application. Yet, at the TTAB, how the mark is actually used in the marketplace is not usually made a part of the record, unless the goods or services identified in the applications or registrations at issue disclose those discrete goods or services.
Trademark law practitioners know the evidentiary difference in TTAB proceedings versus district court litigation. It was generally understood that the likelihood of confusion inquiry at the TTAB is different than in federal court and a finding at the TTAB would not necessarily have a preclusive effect on subsequent federal court litigation because the inquiry at the TTAB"”whether the trademark should register"”was different that the inquiry in a federal court infringement action. Now, the Supreme Court had held that:
"If a mark owner uses its mark in ways that are materially the same as the usages included in its registration application, then the TTAB is deciding the same likelihood of confusion issue as a district court in infringement litigation" (Page 18 of the Opinion, emphasis added)
The result is that a finding of likelihood of confusion at the TTAB may operate as issue preclusion against a party in subsequent federal court litigation on the same issue.
Yet, importantly, the Court did not hold that all TTAB decisions"”even those based on likelihood of confusion"”will have preclusive effect in subsequent federal court litigation. Rather, if the TTAB "does not consider the marketplace usage of the parties' mark, the TTAB's decision should not operate as issue preclusion because the marketplace reality was not determined during the earlier TTAB proceeding."
The Real World Implications for Trademark Owners
While the trademark law bar will prognosticate for months, if not years, on the effects of this opinion, there are some points that trademark owners will want to consider now:
- The choice of forum, either the TTAB or federal district court, will now be more heavily weighed, since a win at the TTAB on likelihood of confusion could set up a trademark owner nicely for an infringement or injunction cause of action against the same infringer in federal district court.
- If a party sustains a loss at the TTAB, the right of trial de novo in district court may now be exercised more frequently, since it appears that evidence not considered at the TTAB could obviate issue preclusion in federal court.
- The filing of TTAB trademark oppositions or cancellations may result in more knee-jerk declaratory judgment actions being filed in federal court by the TTAB defendant (applicant), since a sufficient controversy may now openly exist.
You can read Justice Alito's B&B Hardware opinion by clicking here.
Hiscock & Barclay has extensive experience in establishing, protecting, commercializing, and enforcing brands, trademarks, and copyrights, both domestically and internationally. Should you have any questions regarding the issues raised in this Legal Alert, please contact Jason S. Nardiello or any member of the Branding, Trademarks & Copyrights Practice Area.