Tuesday, November 24, 2015

Applying B&B Hardware, District Court Gives Preclusive Effect to TTAB Priority Finding

Applying collateral estoppel (i.e., issue preclusion) based on a prior TTAB decision [TTABlogged here], the United States District Court for the District of Maryland granted Defendant PNC's motion to dismiss Plaintiff's Ashe's complaint for trademark infringement. The Board had granted PNC's motion for summary judgment in an opposition brought by Ashe against PNC's application to register the mark SPENDOLOGY for an online financial management tool, ruling that PNC and not Ashe had priority of use. The district court applied the Supreme Court's holding in B&B Hardware v. Hargis that "a court should give preclusive effect to [Trademark Board] decisions if the ordinary elements of issue preclusion are met." Ashe v. PNC Financial Services Group, Inc., Case No.: PWG-15-144 (D. Md. November 17, 2015).

The district court found that the determination of priority of use by the TTAB in an opposition is the same as the determination of priority of use for purposes of an infringement claim. Furthermore, that issue was resolved in the TTAB proceeding, the issue was critical and necessary to the TTAB's judgment, the judgment was final, and Ash has a full and fair opportunity to litigate the issue before the Board. Thus all five requirements for issue preclusion were met.

Because priority is a necessary element of Ashe's infringement claim, the Board granted PNC's motion to dismiss.

Read comments and post your comment here.

TTABlog comment: Ownership is another issue that seems to be ripe for the application of issue preclusion. So even if issue preclusion is unlikely to result from a TTAB ruling on the issues of likelihood of confusion because the Board does not consider "marketplace usage," one should be aware that the Board's determination of ownership and priority may well have preclusive effect. Consequently, a party should be give those issues its full attention and maximum effort.

Text Copyright John L. Welch 2015.


At 10:37 AM, Anonymous joe dreitler said...

John, your comment is "Consequently, a party should be give those issues its full attention and maximum effort." That is fine to say in retrospect after the district court ruled and with the hindsight of 3 years after the Opposition began and Supreme Court's decision. I don't think saying that focusing on this issue or that issue addresses the problems Hargis has created. What Hargis does teach, regrettably, is that parties are going to have to treat Board proceedings like a civil suit going in, with respect to creating a very thorough record, pleading and putting in all sorts of defenses and evidence on all sorts of fact issues, even in cases that do not warrant it for fear of it being precluded IF the Board decides to makes it decision based on 1 or more elements that result in claim preclusion. I hope that your crystal ball is working 3 years before you come to the end of a Board decision so you know which facts and factors will be focused on and dealt with in their decision. Failure to do so with your side of the case can undoubtedly result in the other side "dumping" in a record on all of the duPont factors that are relevant in their circuit and imploring the Board for findings of fact on them. This is truly a gotcha game and makes the Board's life (I assume) more difficult in deciding which factors they need to address in making their decision. Sadly, it encourages much more gamesmanship - and voluminous records - on the part of parties in Board proceedings. I have not read anything as to whether the Board is going to change in any way how it decides cases, no would I necessarily expect one. But, what it does mean is that if your panel decides to write a simple opinion, it may not be preclusive but if they write a complete analysis, they are binding the parties and a district court. And for lawyers, not knowing which type of decision it will be until you get the opinion is a bit more uncertainty than most of us want to deal with in an area of the law that is never black and white.

At 10:46 AM, Blogger John L. Welch said...

Joe: I wasn't criticizing this plaintiff/opposer. I was commenting on the future. I do think, however, that the handwringing over possible preclusion on the issue of likelihood of confusion is overdone.

At 10:51 AM, Blogger John L. Welch said...

Joe: take a look at the Delmonico's case: http://thettablog.blogspot.com/2015/06/precedential-no-15-ttab-refuses.html.

The Board addressed the "marketplace usage" issue, observing that its determination did not, in some respects, take into account actual marketplace conditions, and affects only the issue of registrability and not Southwestern's right to use the mark.

This is a precedential ruling, and my signal the TTAB's approach in the future: making clear that its likelihood of confusion determination is not based on actual marketplace conditions.

At 1:44 PM, Anonymous Anonymous said...

Easy to say when no Rule 11 sanctioning powers at the TTAB. A liar can fake documents and have issue preclusion at the district court? Whatever, the TTAB powers have gotten out of hand.

At 1:46 PM, Anonymous Anonymous said...

Reason 1001 as to why to never go to the TTAB for any remotely important LOC case...real judges only for my clients.


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