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Litigation Lesson: SCOTUS Rules in Favor of Trademark Issue Preclusion [VIDEO]
Posted in Litigation

Cincinnati Office Managing Attorney Daniel J. Donnellon continues his "Litigation Lesson" video series with an update on United States Supreme Court case B&B Hardware, Inc. v. Hargis Industries, which you can watch for free here.

Case Background
Defendant Hargis lost its effort to register the “sealtite” trademark before the Trademark Trial and Appeals Board (TTAB) for use in self-drilling, self-tapping screws in the outdoor metal construction fabrication industry. It lost its registration effort due to an objection filed by B&B Hardware over its previously registered “sealtight” trademark for use in metal fasteners in the aerospace industry.

A federal jury found that there was “absolutely no likelihood of confusion in the marketplace between the two similarly sounding names” and ruled in favor of Hargis. B&B appealed, and urged the court to overturn that decision because it had already won at the registration level before the TTAB. (The TTAB refused to register the “sealtite” trademark because of the preexisting mark of a similar name, claiming there could be some confusion in the marketplace.) Further case details are available in Donnellon’s previous “Litigation Lesson” update, which can be viewed here.

SCOTUS rules in favor of issue preclusion.
That was the subject of issue preclusion that SCOTUS was asked to weigh in on, as discussed in the following “Litigation Lesson” video. Associate Justice Alito wrote, without expressing a specific opinion on the substantial likelihood of confusion in the matter, that, simply because a matter is litigated at the TTAB and then re-litigated in court, does not necessarily mean that issue preclusion will never apply.

Justice Alito was very careful to limit the decision, saying “for a great many TTAB decisions, issue preclusion obviously will not apply. But just because the TTAB and the district court consider different elements, doesn’t mean that it should never apply.”

What will this ruling likely effect?
The possibility of issue preclusion can be an important one. Trademark owners can find victory here because trademark attorneys are likely to argue that the concept of issue preclusion shouldn’t stop at likelihood of confusion; once a matter is litigated before the TTAB and fully vetted on the other material subjects of issue preclusion, that concept should extend to issues such as dilution, genericness, priority and distinctiveness.

The practical effect of the B&B v. Hargis decision will likely be noted at the TTAB level. It is likely that attorneys will take that matter much more seriously and introduce more evidence, even though it remains a written submission proceeding. Other attorneys may choose to opt-out of the TTAB opposition, and litigate their matter in court to avoid unintended issue preclusion.

The decision’s effect will likely be felt at the online trademark registration level by companies like LegalZoom where no trademark attorney is involved. Strategic decisions about how to narrow the scope of application request often require the advice of an attorney, and decisions that could have preclusive effect could have dangerous consequences for those registrants down the road.

Watch "Litigation Lesson: SCOTUS Rules in Favor of Trademark Issue Preclusion"


To learn more about Daniel J. Donnellon and his practice, please visit his profile.

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