Caseflicks

Supreme Court of the United States • 2015

B&B Hardware, Inc. v. Hargis Industries, Inc.

575 U.S. 138 | 135 S. Ct. 1293 | 191 L. Ed. 2d 222 | 2015 U.S. LEXIS 2119 | 83 U.S.L.W. 4176 | 25 Fla. L. Weekly Fed. S 146

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Takeaway

In short, a TTAB confusion ruling can bind an infringement court—but only when it decided the same issue involving materially the same trademark usages.

Background

B&B owned the SEALTIGHT trademark for aerospace fasteners. When Hargis sought to register SEALTITE for construction screws, B&B opposed the application. The Trademark Trial and Appeal Board (TTAB) found a likelihood of confusion and refused registration. Hargis did not seek judicial review.

In a related infringement suit, B&B argued that the TTAB’s finding barred Hargis from relitigating likelihood of confusion. The district court rejected that argument, and a jury found for Hargis. The Eighth Circuit affirmed, reasoning that the TTAB and the court used different factors, weighed the marks differently, and assigned the burden of proof differently.

Issues

Issue #1

Whether a TTAB finding of likelihood of confusion can preclude relitigation of that issue in a trademark infringement suit.

Holding

Yes. A TTAB decision should have preclusive effect when the usages it adjudicated are materially the same as those before the district court and the ordinary requirements of issue preclusion are met.

Reasoning

Issue preclusion generally prevents parties from relitigating an issue actually litigated, necessarily decided, and resolved by a valid, final judgment. Agency decisions can have that effect when the parties had an adequate opportunity to litigate. Congress is presumed to permit such preclusion unless a contrary statutory purpose is evident.

Nothing in the Lanham Act displaces that presumption. Registration and infringement are separate proceedings that determine separate rights; registration is not a required step before an infringement suit. Nor does the option of de novo judicial review prevent an unchallenged TTAB decision from becoming final.

Registration and infringement use the same likelihood-of-confusion standard, even though the TTAB and the Eighth Circuit organize their analyses around different factors. The critical limit is factual: the TTAB often assesses the usages described in a registration application, while an infringement court considers marketplace use. If those usages are materially different, the Board has not decided the same issue and preclusion does not apply.

Differences in procedure do not categorically make TTAB decisions unfair or unreliable. TTAB proceedings allow discovery and sworn testimony, and B&B bore the burden of persuasion there just as it did in the infringement suit. The substantial benefits of registration also give parties reason to litigate an opposition seriously.

The Court reversed the Eighth Circuit’s categorical rejection of preclusion and remanded. It did not decide whether every requirement for preclusion was satisfied in this particular infringement suit.

Concurrences

Justice Ginsburg

Reasoning

Justice Ginsburg stressed that many TTAB decisions compare marks apart from their marketplace use. She joined on the understanding that those decisions ordinarily will not preclude a later infringement court from deciding whether actual use causes confusion.

Dissents

Justice Thomas

Reasoning

Joined by Justice Scalia, Justice Thomas argued that the 1946 Lanham Act does not authorize TTAB findings to bind courts. In his view, administrative preclusion was not an established common-law rule when Congress enacted the Act, and the TTAB’s limited authority and the availability of de novo review pointed against it.