US Supreme Court rules on TTAB preclusion in B&B Hardware case

The US Supreme Court has ruled that decisions by the Trademark Trial and Appeal Board (TTAB) on likelihood of confusion should preclude any identical issues from being re-litigated in a district court.

In a 7-2 decision in B&B Hardware v Hargis Industries, the court’s judges reversed a decision by the US Court of Appeals for the Eighth Circuit and remanded the case for further consideration.

Last December, the Supreme Court heard arguments in the case, which centres on two companies that make sealing fasteners. B&B Hardware owns a trademark for the word ‘Sealtight’, while Hargis Industries used and sought to register the term ‘Sealtite’.

B&B filed an opposition to the application at the TTAB, based at the US Patent and Trademark Office, and argued that it was too similar to its mark.

The TTAB agreed and denied Hargis the registration because it ruled there would be a likelihood of confusion.

However, in a separate infringement action filed at the US District Court for the Eastern District of Arkansas, B&B said Hargis was unable to contest the likelihood of confusion between the two marks because of the TTAB’s decision.

The district court disagreed with B&B’s position, and the Eighth Circuit affirmed the judgment on appeal. The eighth circuit found that the TTAB and district court used different factors to assess likelihood of confusion and so “preclusion was unwarranted”.

The appeals court added that the TTAB had focused too much on the appearance and sound of the two marks, adding that that while Hargis bore the burden of persuasion before the TTAB, the burden was on B&B at the district court.

Writing in the Supreme Court’s opinion, Judge Samuel Alito said that the eighth circuit had erred in its conclusion, finding that the same likelihood of confusion standard applies to both registration and infringement.

He added that the factors the TTAB and eighth circuit use to evaluate likelihood of confusion are not “fundamentally different”.

Hargis had argued that the standards adopted by the TTAB and eighth circuit were different, saying that the registration provision asked if the marks “resemble” each other, while the infringement provision considers the marks’ “use in commerce”.

But the Supreme Court said that although the TTAB and district court may not always consider the same uses, this “does not mean the TTAB applies a different standard to the usages it does consider”.

The Supreme Court also decided that the eighth circuit erred when it decided the “issue [of] preclusion could not apply because the TTAB relied too heavily on ‘appearance and sound’.”

Alito wrote: “Contrary to the eighth circuit’s conclusion, B&B, the party opposing registration, not Hargis, bore the burden of persuasion before the TTAB, just as it did in the infringement suit.”

He concluded: “Congress’s creation of an elaborate registration scheme, with many important rights attached and backed up by plenary review, confirms that registration decisions can be weighty enough to ground issue preclusion.”

Justices Roberts, Kennedy, Ginsburg, Breyer, Sotomayor and Kagan joined Alito in his opinion. Justices Thomas and Scalia dissented.