The Stakes In Your TTAB Opposition Proceeding Just Went Way Up: Trademark Trial And Appeal Board 'Likelihood Of Confusion' Determinations May Have Preclusive Effect In Contemporaneous Or Later-Filed Infringement Actions

Yesterday the United States Supreme Court issued a landmark ruling in B&B Hardware, Inc. v. Hargis Industries, Inc. et al., case number 13-352, 575 U.S. ___ (2015), holding that likelihood of confusion determinations by the Trademark Trial and Appeal Board ("TTAB") may have preclusive effect in infringement litigation.1

In the subject case, Petitioner B&B, owner of the mark SEALTIGHT, had opposed Respondent Hargis' attempt to register the mark SEALTITE with the United States Patent and Trademark Office. While those opposition proceedings were pending before the TTAB, infringement litigation B&B had commenced in 2006 against Hargis also was pending in the United States District Court for the Eastern District of Arkansas. The TTAB rendered its decision first, issuing an August 28, 2007 opinion agreeing with B&B, finding a likelihood of confusion between the two marks and denying Hargis' attempt to register SEALTITE. Hargis did not appeal the TTAB decision. In 2010, three years after the TTAB's decision, a jury in the infringement action agreed with Hargis, finding no likelihood of confusion between the two marks. B&B Hardware, Inc. v. Hargis Industries, Inc., 736 F. Supp. 2d 1212, 1214 (E.D. Ark. 2010). Although B&B argued that collateral estoppel precluded Hargis from challenging the TTAB's determination that there was a likelihood of confusion between the two marks, the district court disagreed, id., and the Eighth Circuit Court of Appeals affirmed. B&B Hardware, Inc. v. Hargis Industries, Inc., 716 F.3d 1020, 1024 (8th Cir. 2013). Although the Eighth Circuit did not adopt the district court's reasoning - which rejected issue preclusion because the TTAB is not an Article III Court - it held that the TTAB decision regarding likelihood of confusion could not have preclusive effect in the infringement action because (1) the agency applied a different likelihood of confusion standard in assessing registration than a court applies in assessing infringement; (2) in applying that standard the TTAB placed too much emphasis on the "appearance and sound when spoken" of the two marks rather than on "the marketplace usage of the marks and products," which is "critical" to the question of infringement; and (3) the burden of persuasion was on Hargis in the TTAB proceeding, whereas the burden was on B&B in the infringement action. Id. at 1025-26.

The Supreme Court reversed the decision of the Eighth Circuit, holding that the doctrine of collateral...