If you are involved in trademark or unfair competition litigation, you should be asking yourself: “Will my case come to an abrupt, unexpected end in the next few weeks?”
If you are considering filing such a lawsuit, or expecting to be sued, you should be asking yourself: “Should I try to settle the potential claim or abandon plans immediately?”
Prudent risk assessment regarding trademark and unfair competition claims requires your immediate consideration of the issues raised in this article.
This week, the United States Supreme court heard oral arguments in a substantive trademark case, the first it has heard in a decade. The decision could affect thousands of pending trademark infringement lawsuits. The case is B&B Hardware, Inc. v. Hargis Industries, Inc., et al., Case Number 13-352. The main issue in the case is whether rulings on the issue of “likelihood of confusion” entered by the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB”) should preclude subsequent decisions on the same issue by United States district courts.
The TTAB only has jurisdiction to decide issues of whether a trademark or service mark should be registered, in light of other similar marks. Only the courts can decide the issues of whether a company can use a trademark, and whether damages should be awarded for infringement. However, both the TTAB and the courts are required to apply some form of a test for whether the subject marks are likely to be confused with each other by potential consumers. The test is required to be applied in federal trademark infringement and unfair competition lawsuits and in TTAB Opposition, Cancellation and Concurrent Use proceedings.
As it stands now, the same issue of “likelihood of consumer confusion” can be litigated simultaneously and/or separately in the courts and the TTAB, thereby leading to possibly inconsistent decisions. At the moment, the decisions of the U.S. District Court are said to take priority over contrary TTAB decisions. The decisions of the TTAB are considered “persuasive” to the courts, but not “binding.” The High Court could change that in the coming weeks with its decision in the B&B Hardware case.
This is a case that all trademark attorneys and all actual or potential plaintiffs and defendants litigants should watch closely for several reasons. If the current law changes, any pending trademark infringement case in the courts might come to a quick end if a prior TTAB decision exists on the issue likelihood of confusion regarding the same trademarks.
The decision could also result in reducing the number of trademark infringement and unfair competition lawsuits brought in the courts. It could also eliminate an unsatisfied TTAB litigant’s current right to bring a separate trademark infringement lawsuit, or declaratory judgment action raising similar issues before a United States district court.
An argument against declaring the binding effect of such TTAB decisions concerns the fact that each federal circuit in the United States has a slightly different test and standard for determining whether a likelihood of confusion exists. The Supreme Court’s decision could further homogenize trademark law to a large extent by suppressing diversity and regional interpretations of trademark law (only in cases in which a prior TTAB decision exists though).
Another argument against creating the binding effect is that the scope of examination of the marks is inherently different under the TTAB standard, than under law applied by the courts. This inherent difference stems from the fact that the TTAB is only deciding the issue of whether marks should be registered by the government, whereas courts also decide the broader commercial issue of whether an individual or business can use a mark. Courts have to balance the broad competing concerns of the need to restrict commerce in certain situations and the value of free competition. The TTAB does not.
If anyone has any concerns about the possible effect this imminent ruling will have on their trademark claims, defenses and trademarks, feel free to contact me at our office. We will be monitoring the High Court’s decision, and considering the effects for our existing clients.