CAFC Affirms TTAB Rejection of Res Judicata Claim in "THINKSHARP" Opposition

In a precedential opinion, the CAFC affirmed the TTAB's decision (TTABlogged here) dismissing a Section 2(d)/dilution opposition brought by Sharp against the mark THINKSHARP for educational software and services. Sharp appealed only the portion of the Board's ruling that involved the issue of res judicata. Sharp Kabushiki Kaisha v. ThinkSharp, Inc., 79 USPQ2d 1376 (Fed. Cir. 2006).

ThinkSharp had filed two applications, one for the word mark THINKSHARP and one for a word-and-design version shown above. Sharp opposed both, but ThinkSharp chose to defend only the word mark. In the other opposition, it did not file an answer, leading the Board to issue a default judgment.

Sharp asserted (somewhat belatedly) that the default judgment as to the word-and-design mark "operated as res judicata to preclude ThinkSharp from contesting" the other opposition. The Board disagreed.

The CAFC noted that "issue preclusion" could not apply, because no particular issues were decided in the word-and-design opposition. As to "claim preclusion," the court found it "highly relevant" that the default judgment was entered without consideration of the merits. Quoting precedent, the Board observed:

"Precedent cautions that res judicata is not readily extended to claims that were not before the court, and precedent weighs heavily against denying litigants a day in court unless there is a clear and persuasive basis for that denial. *** Restraint is particularly warranted when the prior action was dismissed on procedural grounds." [citations omitted].

The Board concluded that applying claim preclusion here would not further the purpose of res judicata, which is to protect a party from having to relitigate the same issue against the same party in a separate action. Here, "not only are the marks not identical, but the issues of dilution and likelihood of confusion were not litigated in the defaulted opposition."

"Precedent and sound administrative policy support the Board's reasoning that a trademark owner is entitled to choose which opposition to defend, when the proceedings are not an attempt to evade the effect of a previous adverse judgment on the merits."

Text Copyright John L. Welch 2006.