Under the Lanham Act, before any trademark registration will issue, an application must first be published for opposition. This publication provides the public with an opportunity to challenge registration of a trademark by another party. An opposition action is an adversarial proceeding before the Trademark Trial and Appeal Board (TTAB) and though not generally as lengthy or formal as litigation in the courts, follows essentially the same process. While there are a number of bases for an opposition, the most common is based on an allegation from one party that the trademark of the other party is likely to be confused with its own. Oppositions involve pleadings, discovery, depositions, legal briefs and ultimately oral arguments in front of a panel of three administrative judges of the TTAB. This panel ultimately issues a written opinion and a decision as to whether the opposed mark is or is not entitled to registration.

An opposition action is very narrow, however, as it only relates to the question of whether a particular trademark is entitled to registration. Issues outside that (such as any actual infringement of a trademark or damages) are not addressed. Historically, those issues are addressed via trademark infringement litigation in federal court. There has always been a question, however, as to the impact of a TTAB decision regarding registrability of a given trademark in any other trademark litigation between the parties at issue. If the TTAB determines that A’s trademark is confusingly similar to B’s, does that automatically mean that A’s mark is confusingly similar to B’s in the courts? Per the recent B.B. Hardware v. Hargis Industries decision, the answer is potentially yes.

Facts of the Case

Hargis sought federal registration for the trademark SEALTITE with the United States Patent and Trademark Office. The application was published for opposition as required by the Lanham Act and B&B opposed, arguing Hargis’ SEALTITE was confusingly similar to B&B’s SEALTIGHT mark. At the same time, B&B initiated a trademark infringement action in the federal courts, claiming the Hargis mark infringed its SEALTIGHT mark.

The TTAB ultimately decided in B&B’s favor, finding a potential likelihood of confusion between SEALTITE and SEALTIGHT and refused registration of the Hargis mark. While the opposition process contains a mechanism for an aggrieved litigant to appeal an opposition decision, Hargis did not appeal the TTAB decision. Following this, B&B moved for summary judgment in the district court case arguing the unappealed TTAB decision in its favor established a likelihood of confusion between the marks at issue and Hargis was precluded from re-litigating the confusion issues in the district court proceeding.

Lower Court’s Decision

Generally, parties are precluded from re-litigating issues where there is a valid prior decision by another tribunal between those same two parties on an identical issue. Against this, the district court found no preclusion because the TTAB is a “court” created under an agency and not a court created and sanctioned by Article III of the Constitution. Thus, the district court was not bound by the TTAB decision. B&B appealed and the Eighth Circuit Appellate Court affirmed finding additional reasons in favor of no preclusion, including the fact that the TTAB and courts use different formulations and weigh factors differently when determining likelihood of confusion. Thus, the TTAB decision did not preclude addressing the confusion issue anew.

Supreme Court Decision

On appeal to the Supreme Court, the appellate and district courts were reversed. The Supreme Court held 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.” Turning to the reasoning of the lower courts, contrary to the district court’s conclusion, the Supreme Court found that agency decisions can have preclusive effect on courts unless there is a clear statutory prohibition of same. The Lanham Act has no such prohibition and therefore the TTAB decision can have preclusive effect. With regard to the differences in factors, weight and procedures between TTAB and court actions considered by the Eighth Circuit, the Supreme Court rejected those conclusions noting that even if the forum is different, the general concept of likelihood of confusion in both opposition and court proceedings is the same. Further, procedural differences due to the more informal opposition proceeding alone are not enough to defeat preclusion. Accordingly, the Court determined that a TTAB proceeding can have a preclusive effect in a federal court infringement litigation where all other elements of issue preclusion are present.

Impact

B&B is an important decision because it increases the stakes in opposition actions. If an opposition might have preclusive effect in later infringement litigation, parties before the TTAB will likely want to put more time and effort into opposition litigation, which could include greater reliance on experts and surveys. Given this potential preclusive effect of TTAB decisions, trademark owners should also monitor USPTO filings and take greater advantage of the less formal, faster and economic TTAB opposition in order to protect their brands.