Thursday, February 20, 2014

Certiorari Petition Seeks Clarification of Preclusive Effect of TTAB Likelihood of Confusion Determination

On September 18, 2013, B&B Hardware, Inc. filed with the U.S. Supreme Court a petition for writ of certiorari (here), seeking review of the Eighth Circuit's decision in B & B Hardware, Inc. v. Hargis Industries, Inc., 106 USPQ2d 1660 (8th Cir. 2013). [TTABlogged here]. B & B sued Hargis Industries for trademark infringement, unsuccessfully claiming that defendant's use of the mark "Sealtite" for "self-drilling and self-taping screws" infringed B&B's mark "Sealtight" for fasteners used in the aerospace industry. The appellate court affirmed, in a split decision.

The TTAB had sustained B&B's opposition to registration of the "Sealtite" mark on the ground of likelihood of confusion with B&B's mark. The district court rejected B&B's contention that the TTAB decision should be given preclusive effect on the likelihood of confusion issue, and the United States Court of Appeals for the Eight Circuit agreed. The panel majority ruled that because the TTAB is not an Article III court, its decision on the issue of likelihood of confusion is not entitled to preclusive effect in a subsequent trademark infringement action between the parties.

The appellate court further ruled that the TTAB decision was not entitled to deference, and that the district court did not abuse its discretion in excluding the evidence of the TTAB decision before the jury. Hargis had argued that this evidence would be too prejudicial.

On January 13, 2014, the Supreme Court invited the Solicitor General "to file a brief in this case expressing the views of the United States." In its petition, B&B presents the following questions:

1. Whether the TTAB’s finding of a likelihood of confusion precludes Hargis from relitigating that issue in infringement litigation, in which likelihood of confusion is an element.

2. Whether, if issue preclusion does not apply, the district court was obliged to defer to the TTAB’s finding of a likelihood of confusion absent strong evidence to rebut it.

Read comments and post your comment here. Also see comments here on the Eighth Circuit ruling.

Text Copyright John L. Welch 2014.


At 8:17 AM, Anonymous Anonymous said...

Another example of a single litigant wanting to win at all costs and if successful, possibly ending the use and value of the TTAB. Oppositions are not meant to substitute for the more formal proceedings and potential injunctive and monetary relief of a federal court. There is not space here to go into all of the details but 99% of oppositions are settled! few have full blown discovery like a district court! experts! surveys and of course live testimony before the court. If TTAB findings are now preclusive, is it malpractice for a lawyer to recommend a TTAB action against any use based application? I venture to say that it is malpractice if your client is going to be bound on the findings of an administrative board, on an incomplete record and no ability to hear live testimony. That has never been the purpose of the Board but if it's findings now bind a federal court, it seems a litigator going this route is seriously disadvantaging his client.

At 8:23 AM, Anonymous Anonymous said...

If INTA wants to do some good they had better jump in on this one with an amicus brief and it surely should not support a per se rule that a TTAB finding has preclusive effect.

At 9:12 AM, Anonymous Anonymous said...

One of the key distinctions is the fact that the TTAB only looks at the goods and services as described in the opposed application and opposer's registration, rather than the real world of what they offer.

At 1:51 PM, Anonymous Tal Benschar said...

The last anonymous (at 9:12 a.m.) nailed it. The law of collateral estoppel requires that the issue decided in the first case and before the court in the second case be "identical." They are not, because the TTAB standard for confusion and the standard in a civil action under the Lanham Act are different.

At 3:00 PM, Anonymous Anonymous said...

It is important to note that this case addresses whether a TTAB decision, which is not appealed, has preclusive effect during subsequent litigation before a District Court. There is no per se issue preclusion rule without regard to whether the decision was rendered by an administrative body or Art III Court. The case law on issue preclusion requires a careful analysis of the factual issues considered.

Like other administrative boards, sometime a TTAB decision should be given preclusive effect and sometimes it should not be-it depends at what was actually decided. In this case the 8th Cir. found that the TTAB did not address the same likelihood of confusion issue that was before the District Court.

However, sometimes the TTAB addresses the exact same issue. For example, when the actual use of the applied for mark on the goods is identical to the goods identifed in the application. For this example, evidence of use in the marketplace (price, channels of trade, customer surveys) can be submitted to the TTAB. A TTAB decision on likelihood of confusion in this case would be directed to the identical issue that would subsequently be before the District Court, and thus the TTAB decision (which was not appealed)should be given preclusive effect.

Another example, where preclusion may apply is where the TTAB determines that a mark is generic. In order to determine genericness, the TTAB considers the common law use in the marketplace and receives evidence of use, channels of trade, customer perceptions, etc. Thus, a TTAB decision that an applied for mark is generic and therefore cannot function as a trademark should have preclsuive effect since the issue is identical to what a District Court would consider in a subsequent litigaiton. However, if suffcient time passes between the TTAB decision and the subsequent District Court case and customer perceptions of the mark change, then a TTAB decision 10 years earlier may not have preclusive effect on a subsequent DC case due to changed facts, i.e., the TTAB did not address the identical issue - whether the mark is generic TODAY.)

As noted above, the current case deals with preclsuive effects for TTAB decisions which are not appealed. A party may appeal an adverse ruling from the TTAB to a DC for de novo retrial (new evidence/new arguments) or a traditional appelate review before the CAFC. Thus, a party is not bound by an adverse ruling by the TTAB but can elect to seek review in a DC where live testimony can be heard and the record can be supplemented. Thus, the TTAB provides a forum where a decision can be rendered genrally chepaer and faster than a DC, but still affords adequate avenues of review for the adverse party.

A ruling by the Sup. Ct. as to the potential preclusive effect of TTAB decisions, including the defernece to be given to factual findings would be useful to the trademark bar.


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