Supreme Court Rules That TTAB Decisions Can Have Preclusive Effect In Federal Court

On March 24, 2015, in a trademark dispute captioned B&B Hardware Inc. v. Hargis Indus., Inc., No. 13-352, the United States Supreme Court determined that “likelihood of confusion for purposes of registration [of a trademark] is the same standard as likelihood of confusion for purposes of infringement.” Accordingly, the Court held that federal courts must recognize the preclusive effect of Trademark Trial and Appeal Board (TTAB) determinations on that issue when “the ordinary elements of issue preclusion are met.”

In 2002, the U.S. Patent and Trademark Office (USPTO) published Respondent Hargis Industries' application to register SEALTITE, prompting Petitioner B&B Hardware, Inc. (“B&B”) to oppose registration of that mark based on its own rights in the SEALTIGHT mark. Both companies manufacture metal fasteners, but for use in different industries: B&B's fasteners are used in the aerospace industry, while the Hargis Industries (“Hargis”) fasteners are for the construction trade.

Concurrently with the opposition before the TTAB, B&B also brought a lawsuit for trademark infringement in federal court. While that lawsuit was pending, the TTAB granted B&B's opposition, determining that Hargis's intended use of SEALTITE for its product was likely to cause confusion with B&B's use of the SEALTIGHT mark for its own product, and thus was not entitled to registration. Hargis did not appeal the TTAB's decision. Subsequently, the district court determined that the TTAB's finding of a likelihood of confusion did not have a preclusive effect on the federal court proceeding, and the jury returned a verdict for Hargis. The Eighth Circuit agreed with the district court, and rejected preclusion on the basis that the TTAB had not considered and did not decide the same likelihood of confusion issues presented to the district court. B&B Hardware, Inc. v. Hargis Indus., Inc., 716 F. 3d 1020, 1026 (8th Cir. 2013).

B&B appealed to the Supreme Court on the issue of whether the district court should have given preclusive effect to the TTAB's likelihood of confusion determination.

Writing for a 7-2 majority of the Supreme Court, Justice Alito noted the Courthas long recognized the general rule that once the parties have litigated an issue of law or fact to a final determination, even in administrative proceedings, that determination has a preclusive effect on the consideration of the same issue in a subsequent proceeding between the same parties. The Court rejected as...