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

Background

A small manufacturer, B & B Hardware, owns the mark SEALTIGHT and opposed Hargis Industries’ application to register SEALTITE. The Trademark Trial and Appeal Board (TTAB) concluded SEALTITE should not be registered because it is likely to cause confusion. At the same time, B & B sued Hargis in federal court for trademark infringement; a jury later found no likelihood of confusion. The Eighth Circuit ruled that the TTAB decision could not be given preclusive effect in the infringement suit.

Reasoning

The Court addressed whether a TTAB registration decision can prevent the same issue from being relitigated in a later infringement case. The majority held that federal courts should give preclusive effect to TTAB findings when the ordinary elements of issue preclusion are met and the usages the TTAB decided are materially the same as those before the court. The Court explained that differences in procedures or in the way factors are applied do not automatically defeat preclusion, and nothing in the Lanham Act plainly forbids it. The Eighth Circuit’s narrow approach was reversed and the case was sent back for further proceedings.

Real world impact

Trademark applicants and owners will now treat TTAB rulings as potentially binding if they cover the same marketplace uses that a later court would consider. That makes TTAB contests more consequential, but the decision is case-by-case: many TTAB rulings will not be preclusive if they address different or limited usages. The Court remanded for further fact-based work to see if preclusion applies here.

Dissents or concurrances

Justice Ginsburg agreed but emphasized many TTAB decisions will not bind courts. Justice Thomas (joined by Justice Scalia) dissented, warning the presumption of administrative preclusion lacks historical support and raises Article III and jury-trial concerns.