On March 24, 2015, the Supreme Court decided the case of B&B Hardware v. Hargis Indus. This case represented a long-standing trademark battle brought in both federal court and before the Trademark Trial and Appeal Board (TTAB).
The TTAB is an administrative agency charged with hearing and deciding certain kinds of cases involved the trademarks. This includes appeals from decisions from trademark examiners denying registration of marks, opposition proceedings--where one party attempts to stop the registration of another party’s trademark-- and cancellation proceedings. The marks at issue in B&B Hardware were SEALTITE v. SEALTIGHT. However, the Supreme Court was not tasked with finding whether these marks were likely to be confused in the marketplace--the standard for determining trademark infringement.
Instead, the Court was tasked with determining whether a TTAB decision could prohibit a party from bringing a lawsuit later on in federal court. Parties cannot bring the same lawsuit against the same party—or different parties in some circumstances—more than once. The Supreme Court held that a TTAB decision could stop a party from filing a trademark infringement suit against the same party late down the line.
In deciding this, the Supreme Court split with the law as it previously stood. Prior to the B&B Hardware decision, federal courts did not give TTAB decisions any preclusive effect on the later filed federal lawsuit. Importantly, the Supreme Court did not lay down any bright line rule on this issue. Rather, it simply held the TTAB decision could be used to prohibit a party from filing a second lawsuit in federal court.
What this means to you
To the average trademark owner, this probably sounds like a bunch of legal jargon that is not applicable to everyday situations and concerns. However, this decision can--and most likely will--affect a trademark owner.
A trademark owner has a duty to police and enforce its trademark rights against infringing uses of a mark. TTAB actions, such as an opposition or cancellation proceeding, are typically considered to be less expensive measures of enforcing one’s trademark rights. Additionally, there other strategic advantages in a TTAB action that are not always available in a later federal infringement action. Prior to the B&B Hardware decision, a trademark owner could bring both a TTAB action and infringement action either separately or contemporaneously to attack an infringer and know that the TTAB decision would not affect the federal court action. In effect, trademark owners had the unique ability to have two-bites at the apple. After B&B Hardware, this is not necessarily the case.
Now, a trademark owner now must heavily consider--in some circumstances--whether bringing a TTAB action will prejudice its chances later down the road at stopping the same party from infringing its trademark. Importantly, the Court left this somewhat open by using open-ended language, such as “should” or “may.” The practical effect being that how a court will rule on this issue will be hard to predict and add a level of uncertainty to trademark litigation.
Of course, the situation has to be right in order for the TTAB decision to have preclusive effects on a later filed federal lawsuit. However, this is a consideration that trademark owners now must think about when enforcing and policing their trademarks.
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