On March 24, 2015, the U.S. Supreme Court issued a decision that requires courts in trademark cases to give greater consideration to prior decisions of the Patent and Trademark Office's Trademark Trial and Appeal Board ("TTAB") as to whether two trademarks are likely to be confused. In B&B Hardware, Inc. v. Hargis Industries, Inc., 13-352 (U.S. Mar. 24, 2015), the Court held that "consistent with principles of law that apply in innumerable contexts . . . a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met." Slip op. at 2.
There are a number of interesting facets to this decision (detailed here). The bottom line for trademark owners--including most fashion, retail, and consumer products companies—is that trademark owners can no longer be cavalier about ignoring the results of administrative proceedings over whether a trademark registration should be allowed. Many courts had been dismissive of these kind of administrative determinations, and often allowed litigants to retry likelihood of confusion issues de novo if a related dispute made its way into federal court. The B&B Hardware case will make that more dangerous, because courts of appeal will likely look closely to see if the elements of issue preclusion were present in prior TTAB determinations. The Court hinted at some important limitations on issue preclusion, but it may not be apparent whether these limits apply until after a TTAB proceeding is completed.
As a result, brand owners should evaluate opposition proceedings that are instituted against them more carefully, consider whether the more informal format of TTAB proceedings may suit their litigation goals, and generally take them more seriously, so they do not need to explain after the fact why issue preclusion should not apply. The Supreme Court was clear that if a trademark owner is dissatisfied with a TTAB determination, it must take advantage of its options for judicial review, and seek an immediate appeal, or else it could find itself precluded from trying to reargue the issue.
Interestingly, this is the second trademark case that the Supreme Court has issued this year, after having avoided trademark decisions for nearly a decade. The new B&B decision did not explicitly address the Court’s earlier decision in Hana Financial, Inc. v. Hana Bank, 13-1211 (U.S. Jan. 21, 2015).