TTAB Rulings Held Preclusive in Federal Court - April 16, 2015

On March 24, 2015, the United States Supreme Court released its long-awaited decision in B&B Hardware v. Hargis Industries, 13-352 (U.S. Mar. 24, 2015), holding that the Trademark Trial and Appeal Board (TTAB) findings of mark similarity can be preclusive in later federal proceedings as long as "the ordinary elements of issue preclusion are met." Slip op. at 2. This ruling stands in direct opposition to the majority of recent federal precedent, and will dramatically increase the import of TTAB rulings in the coming years. In other words, the TTAB just got a bit of a promotion.

Case Background

This case initially arose when Hargis Industries applied to register the trademark "SEALTITE" in the construction industry in 1996. B&B Hardware opposed this application and simultaneously filed a Lanham Act trademark infringement lawsuit, asserting that B&B had previously registered the trademark "SEALTIGHT" in 1993 for its fastener product in the aerospace industry. While B&B's federal suit was pending the TTAB determined that Hargis's proposed mark was confusingly similar to B&B's mark and denied Hargis's trademark application. As a result, B&B argued in its district court proceeding that the TTAB's finding of mark similarity was entitled to preclusive effect in the court. Unpersuaded, the district court refused to admit the TTAB's holding into evidence, stating that no deference should be accorded to the findings of a non-Article III court. The jury then held in favor of Hargis. Later, in upholding this decision, the U.S. Court of Appeals for the Eighth Circuit found that because the TTAB uses a slightly different "likelihood of confusion" standard, each court inevitably decides different factual questions and, thus, that TTAB's findings could never preclude federal courts.

Supreme Court Holding

The Supreme Court summarily reversed these holdings, finding that "[s]o 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 a district court, issue preclusion should apply." Slip op. at 2. In fact, these "ordinary elements of issue preclusion" are present "[w]hen [the same] issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment,..." RESTATEMENT (SECOND) OF JUDGMENTS §27 (emphasis added). As such, while the Court's ruling does give the TTAB preclusive power regardless of its...