Yesterday, the U.S. Supreme Court issued its second trademark ruling of this term, holding in B&B Hardware, Inc. v. Hargis Industries, Inc., No. 13-352, that “a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met.” In this case, discussed in earlier posts here and here, petitioner B&B owns and uses the registered mark SEALTIGHT® for sealing fasteners. Respondent Hargis petitioned to cancel B&B’s registered mark in order to register its own phonetically identical mark SEALTITE for sealing fasteners, but the Trademark Trial and Appeal Board (TTAB) held that Hargis’s SEALTITE mark created a likelihood of confusion with B&B’s SEALTIGHT mark, and refused to cancel B&B’s mark or register Hargis’s mark. B&B then sued Hargis in federal court for trademark infringement, but, contrary to the TTAB’s finding, the jury found no likelihood of confusion and ruled against B&B. The Eighth Circuit Court of Appeals upheld the district court’s ruling, declining to give preclusive effect to the TTAB’s prior finding of a likelihood of confusion.
Yesterday’s ruling by the Supremes addressed the issue of “whether the District Court in this case should have applied issue preclusion to the TTAB’s decision that SEALTITE is confusingly similar to SEALTIGHT.” Finding that “the Eighth Circuit rejected issue preclusion for reasons that would make it difficult for the doctrine ever to apply in trademark disputes,” the Supreme Court reversed the Eighth Circuit’s decision, and instructed that “[o]n remand, the court should apply the following rule: So long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply.” The decision has the practical effect of making TTAB registration decisions potentially much more consequential with respect to subsequent infringement determinations between the same parties in federal court, and therefore will almost certainly affect the strategies and practices of litigants before both tribunals. Read the Court’s opinion here.