B&B Hardware Inc. v. Hargis Indus., Inc.

This article previously appeared in Incontestable Trademark Newsletter - June 2013.

CASE SUMMARY

Facts

Plaintiff B&B Hardware Inc. ("B&B") has produced industrial fasteners for the aerospace industry under the mark SEALTIGHT since 1990. B&B's SEALTIGHT mark was registered with the PTO in 1993. Subsequently, Hargis Industries, Inc. ("Hargis") adopted the mark SEALTITE for its self-drilling, self-taping screws for use in the metal-building industry. Hargis applied to register SEALTITE with the PTO in 1996, but its application was initially refused due to the B&B registration. In response, Hargis petitioned to cancel the B&B registration in the TTAB on the ground that the B&B mark had been abandoned. The TTAB cancellation action was suspended before a final decision because B&B sued Hargis in the U.S. District Court for the District of Arkansas, alleging infringement of its registered SEALTIGHT trademark. After trial, the jury found that the B&B mark was descriptive without secondary meaning and thus could not be infringed by the Hargis mark ("Arkansas Decision 1"). However, Hargis failed to timely amend its cancellation petition to substitute the claim that B&B's mark was merely descriptive and lacked secondary meaning in place of its original abandonment claim. Therefore, the TTAB dismissed the cancellation action ("TTAB Decision 1").

In 2003, the Hargis application for SEALTITE was published and opposed by B&B on the ground that it was likely to be confused with B&B's registered SEALTIGHT mark. Hargis argued that the opposition was collaterally estopped based on Arkansas Decision 1's finding that the B&B mark was descriptive and lacked secondary meaning. The TTAB rejected the collateral-estoppel argument on the grounds that (1) B&B's SEALTIGHT mark had become incontestable due to five years of continuous usage; and (2) Arkansas Decision 1 did not address likelihood of confusion. Ultimately, in 2007, the TTAB found that Hargis's SEALTITE mark was confusingly similar to B&B's SEALTIGHT mark and sustained B&B's opposition ("TTAB Decision 2").

Meanwhile, in 2006, before the issuance of TTAB Decision 2, B&B again sued Hargis in the U.S. District Court for the District of Arkansas, alleging that the Hargis mark infringed the B&B mark. Initially, the district court dismissed B&B's claim, citing issue preclusion based on Arkansas Decision 1. B&B was successful in overturning the dismissal on appeal, given the changed incontestability status of the...