This entry is an update on a previous blog entry (link to December 5, 2014 entry called “Trademark Case All Trademark Attorneys and Litigants Need to Watch”) regarding the United States Supreme Court’s pending decision in the case entitled B&B Hardware, Inc. v. Hargis Industries, Inc., et. al. Recently the Supreme Court announced its ruling in this case. The main issue in this case is whether a finding regarding “likelihood of confusion” entered by the United States Patent and Trademark’s Office’s Trademark Trial and Appeal Board (“TTAB”) can preclude subsequent decisions on the same issue by United States district courts.
The answer is yes. Specifically, the Supreme Court found that “[s]o long as the other ordinary elements of issue preclusion are met, when the uses adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply” to the issue of likelihood of confusion. This means that issue preclusion does not always apply. Issue preclusion will apply where a mark is used in the marketplace in a materially same manner as the usage(s) identified in the trademark application. However, where a mark is used in the marketplace in ways that are materially unlike the stated usages in the application, the TTAB will not be considering the same likelihood of confusion issue as the United States district court since “actual usage in the marketplace is the paramount issue” in a United States district court proceeding. This distinction is important as Justice Ginsburg in her concurring opinion stated that “for a great many registration decisions issue preclusion will obviously not apply,” since TTAB decisions involve “a comparison of the marks in the abstract and apart from their marketplace usage.” The Supreme Court also provided further guidance by finding that “trivial variations between the usages set out in an application and the use of a mark in the marketplace do not create different ‘issues . . .’” Thus, merely adding an immaterial feature to a mark will not defeat the application of issue preclusion.
This decision is monumental. However, it does leave some important questions unanswered such as whether preclusive effect will be given to other issues and whether this decision will require broader discovery in TTAB cases going forward. We will be monitoring the legal implications that arise from the Supreme Court’s decision and considering the effects for our existing clients.
Santucci Priore, P.L.