High Court Says Trademark Trial And Appeal Board Decisions Can Have Preclusive Effect

On March 24, 2015, the United States Supreme Court issued its decision in B&B Hardware, Inc. v. Hargis Industries, Inc., holding that "a court should give preclusive effect to [Trademark Trial and Appeal Board] decisions if the ordinary elements of issue preclusion are met." 575 U.S. __ (2015) (slip op., at 2). The issue before the Supreme Court was whether the district court should have applied issue preclusion to the TTAB's decision that "SEALTITE" is confusingly similar to "SEALTIGHT." Id.

Background and Procedural History of B&B Hardware

In 1996, Hargis Industries, Inc. ("Hargis") applied to register the mark SEALTITE for "self-piercing and self-drilling metal screws for use in the manufacture of metal and post-frame buildings." As part of the long-running trademark dispute between the parties, B&B Hardware, Inc. ("B&B") opposed the application in 2003 on the basis that SEALTITE was likely to cause confusion with B&B's registered SEALTIGHT mark for "threaded or unthreaded metal fasteners and other related hardwar[e] ... for use in the aerospace industry." While the opposition proceeding was pending, B&B brought an infringement action against Hargis in the United States District Court for the Eastern District of Arkansas. Shortly thereafter, the TTAB denied registration to Hargis's SEALTITE mark, holding that the mark was likely to cause confusion with B&B's SEALTIGHT mark. Hargis did not seek judicial review of the TTAB's decision. B&B then moved for summary judgment on the issue of whether the TTAB's prior finding of likelihood of confusion in a matter involving the same parties and trademarks should be given preclusive effect. The district court denied B&B's request for summary judgment, holding that the TTAB's determination did not preclude the jury's consideration of the likelihood of confusion issue. The district court also declined to admit the TTAB's decision into evidence at trial. While the jury was informed that the TTAB refused to register Hargis's mark, the jury was not told how the TTAB resolved the likelihood of confusion issue. Ultimately, the jury found that Hargis's use of the SEALTITE mark was not likely to cause confusion with B&B's SEALTIGHT mark. On appeal of the preclusion issue, a divided panel of the United States Court of Appeals for the Eighth Circuit, consisting of Judges Shepherd, Loken, and Colloton, affirmed. Judge Shepherd, writing the opinion for the majority, held that TTAB findings regarding a likelihood of confusion should be accorded neither preclusive effect nor deference. B&B Hardware v. Hargis Indust., 716 F.3d 1020, 1026 (8th Cir. 2013). The Eighth Circuit held that for preclusion to apply, the issue sought to be precluded must be the same as the issue involved in the original action. This prerequisite was not satisfied because the likelihood of confusion issue decided by the TTAB in opposition proceedings was not the same issue decided by district courts in trademark infringement actions. The Eighth Circuit noted that the TTAB relies on the 13-factor test articulated in In re E.I. DuPont DeNemours & Co., 476 F.2d 1357 (C.C.P.A. 1973), to evaluate whether there is likely to be confusion between the applied-for mark and an existing registration, while district courts in the Eighth...