The Lawletter Vol 40 No 6
In opposed trademark registration proceedings, the administrative adjudicative body is the Trademark Trial and Appeal Board ("TTAB"). It hears the appeals of applicants for registration and of those who oppose registration who are aggrieved by the decision of the Patent and Trademark Office whether to grant or deny registration to an application for registration of a trademark. There is a further level of appeal to the Federal Circuit, and a plaintiff can always seek cancellation of a registered trademark in district court. An issue often involved in registration proceedings is whether there is a likelihood of confusion between the applicant's mark and the opposer's mark. Unlike court proceedings, there is no discovery and no live testimony. The TTAB makes its decision based on the written record that is submitted to it by the parties. If the TTAB makes a determination that there is a risk of confusion between the marks in suit, what weight should be assigned to that determination by a court that is hearing a dispute between two markholders, one of whom claims that the other's mark infringes on its mark?
That was the issue before the U.S. Supreme Court in B&B Hardware, Inc. v. Hargis Industries, 135 S. Ct. 1293 (2015). The owner of the SEALTIGHT trademark used with respect to fasteners in the aerospace industry brought action against the owner of the SEALTITE mark used on self-drilling screws for the constructing of buildings, alleging trademark infringement, unfair competition, and false designation of origin. The defendant counterclaimed for copyright infringement, false advertising, false designation of origin, and unfair competition. Following a jury verdict in favor of the defendant on all claims, the district court denied the plaintiff's motion for a judgment as a matter of law and a new trial and awarded the defendant its attorney's fees. The judgment was affirmed in part and remanded in part. B&B Hardware, Inc. v. Hargis Indus., 716 F.3d 1020 (8th Cir. 2013).
An application for registration of the SEALTITE mark by Hargis was refused by the TTAB because that body concluded that there was a likelihood of confusion between the two marks. That issue was presented in the litigation between the parties in court, but the district court and the court of appeals both found, based on a jury verdict after a trial, that there was no risk of confusion between the two marks. The issue before the Supreme Court was whether the earlier administrative determination by the TTAB should have been given preclusive effect in the later court proceeding. The Court disagreed with both lower courts and reversed. The majority found that likelihood of confusion for purposes of registration is the same standard as likelihood of confusion for purposes of trademark infringement. B&B Hardware, 135 S. Ct. at 1307. Thus, the majority, over a sharp dissent by Justice Thomas, concluded that at least in some circumstances, an administrative adjudication can have preclusive effect if the same issue is later presented in a court proceeding. Whether other administrative adjudicative proceedings will have similar preclusive effect in court proceedings remains an open question. Hargis could have sought cancellation of B&B's trademark, a remedy that is available under the Lanham Trademark Act, 15 U.S.C. § 1119, in addition to the remedies available for infringement, in which case the TTAB's finding would have had no more than persuasive effect. As a result, a case that is already two decades old continues to have a life of its own, since it was remanded for further proceedings, presumably for a new (third) trial.