By: Briana Polan
The United States judicial court system is one of the primary tool litigants choose in resolving civil disputes. In conjunction, administrative agencies often have internal boards, such as the Trademark Trial and Appeal Board (TTAB) and Patent Trial and Appeal Board (PTAB) to decide adversary proceedings between opposing parties. For decades, the decisions reached through these agencies did not impact those within the judicial court system.
On March 24, 2015, the Supreme Court made yet another shocking decision within the realm of Intellectual Property law. In the case B&B Hardware v. Hargis Industries, B&B Hardware asserted that Hagis’ mark SEALTITE, used for fasteners for metal frames on buildings, caused a likelihood of confusion with their registered trademark SEALTIGHT used in connection with fasteners in the aerospace industry. Concurrently, B&B Hardware initiated opposition proceedings at the Trademark Trial and Appeal Board, challenging Haggis’ application to register the mark SEALTITE. The TTAB ultimately decided that there was a likelihood of confusion and denied registration of the SEALTITE mark while litigation proceeded in the U.S. District Court.
The District Court rejected B&B’s assertion that the court was bound to find a likelihood of confusion due to the TTAB’s ultimate decision. B&B argued that issue preclusion prohibited the same issue to be re-litigated in district court once the TTAB ruled on that same issue. On appeal, the 8th Circuit affirmed the District Court’s rejection regarding issue preclusion. The problem of whether the TTAB can initiate issue preclusion to estop further litigation was argued in front of the Supreme Court. Ultimately, the Court reversed in a 7-2 decision, holding a TTAB decision can have preclusive effect as long as the ordinary elements of issue preclusion are met.
Issue preclusion, a common law doctrine, prevents the relitigation of the same issue if the ordinary elements are met: (1) there must be prior litigation in which the identical issue was before the court, (2) that issue was actually litigated; and (3) the issue was actually decided and was essential to the judgment. In B&B Hardware, Hagis argued the factors considered by the TTAB differ from those considered by the 8th Circuit. While this may be literally true, the factors differ slightly. The Supreme Court found little merit that the minute differences in factors made a big difference in the ultimate decision in finding a likelihood of confusion. Although it may appear that the purpose of the TTAB is opposing or challenging the registration of a mark while bringing suit is to find infringement, the Supreme Court found the fundamental purposes of those tests the same. As a result, the court should have been precluded from re-litigating the TTAB’s final decision.
In response to limitation, plaintiffs must now be strategic in their choices when they wish to challenge the distinctiveness of a mark or the likelihood of confusion. One option is to go through the TTAB risking the possibility of being precluded from further litigation. Second, a plaintiff may choose to forego the TTAB and bring suit directly to the district court. Lastly, a plaintiff who chose to go through the TTAB can request the district court to review the matter de novo.
Bio: Briana is a Staff Member of the Journal of High Technology Law. She is currently a 2L at Suffolk Law with a concentration in Intellectual Property. She holds a B.A. in Music Performance and Music Education from Connecticut College and a M.M. in Instrumental Conducting from the University of Miami.