Partner Dyan Finguerra-DuCharme Authors Article About U.S. Supreme Court Decision in B&B Hardware, Inc. on Likelihood of Confusion
Partner Dyan Finguerra-Du Charme, a member of Pryor Cashman’s Litigation and Intellectual Property Groups, has authored the article “Supreme Court Trademark Decision Creates More Questions Than Answers” for the April/May 2015 edition of the New York Intellectual Property Law Association (NYIPLA) Bulletin.
In the article, Finguerra-DuCharme discusses the March 14, 2015 decision of the U.S. Supreme Court in B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293 (2015). In a 7-2 ruling, the Court held that an adjudication of likelihood of confusion by the Trademark Trial and Appeal Board (TTAB) can constitute issue preclusion in a federal district court case involving the same trademarks. Although the Supreme Court recognized that district courts and the TTAB often consider different factors, the Court ruled that the confusion standards are essentially the same. Acknowledging concerns raised by amicus briefs, the Supreme Cout further held that “if the TTAB does not consider the marketplace usage of the parties’ marks, the TTAB’s decision should have no later preclusive effect in a suit where actual usage in the marketplace is the paramount issue.”
Finguerra-DuCharme, who is Co-Chair of the Trademarks Committee of NYIPLA, was Counsel of Record for the NYIPLA’s amicus brief submitted to the Supreme Court in the B&B Hardware, Inc. case.
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© 2015 New York Intellectual Property Law Association, Inc. Page 1 April 2015/May 2015
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On March 24, 2015, in a 7-2 decision, the U.S. Supreme Court reversed the Eighth Circuit’s deci-
sion in B&B Hardware, Inc. v. Hargis Industries, Inc.,
by holding that a Trademark Trial and Appeal Board
(“TTAB”) decision on the issue of likelihood of confu-
sion has preclusive effect in a subsequent district court
trademark infringement action “[s]o long as the other
ordinary elements of issue preclusion are met [and]
when the uses adjudicated by the TTAB are materially
the same as those before the district court.” 135 S. Ct.
1293, 1311 (2015).
The majority opinion, delivered by Justice Alito,
came after an 18-year battle between the parties, which
began when Hargis applied to register SEALTITE in
1996. B&B opposed Hargis’s application, arguing
before the TTAB that Hargis’s SEALTITE mark was
confusingly similar to B&B’s SEALTIGHT mark, which
was registered in 1993. The TTAB agreed with B&B
and denied Hargis’s registration. Even though it had the
right to appeal, Hargis did not seek judicial review of the
TTAB’s decision in the Federal Circuit or district court.
In addition to initiating a TTAB opposition pro-
ceeding, B&B sued Hargis for trademark infringement
in federal court. Before the district court ruled on the
main issue of likelihood of confusion, the TTAB issued
its decision denying Hargis’s registration. B&B then
argued to the district court that the TTAB’s decision
precluded Hargis from relitigating the issue of likelihood
of confusion. The district court refused to apply collat-
eral estoppel on the issue of likelihood of confusion and
gave no deference to the TTAB decision. In the end, an
Arkansas jury determined that there was no likelihood of
confusion. B&B Hardware, Inc. v. Hargis Indus., Inc.,
736 F. Supp. 2d 1212 (E.D. Ark. 2010).
The Eighth Circuit affirmed the district court’s de-
cision to not accord collateral estoppel to the TTAB’s
finding. B&B Hardware, Inc. v. Hargis Indus., Inc., 716
F.3d 1020, 1025 (8th Cir. 2013). The court assessed
whether the TTAB addressed the same matter as that
which was sought to be precluded and concluded that
because the TTAB focused mainly on the registration
and the application and not on the “marketplace con-
text,” its analysis was not entitled to either a preclusive
effect or deference. B&B petitioned for certiorari, which
the Supreme Court granted.
In the Supreme Court, the NYIPLA filed an amicus
brief in support of the Respondents, arguing that TTAB
decisions should not be given preclusive effect as a
matter of course in a subsequent litigation between the
parties concerning the same marks at issue before the
TTAB. The NYIPLA further argued that on the rare oc-
casion that the TTAB considered marketplace evidence
so that the parties have had a full and fair opportunity
to be heard, the court should give minimal evidentiary
weight to the TTAB decision on the narrow issue of
registrability.
While the Supreme Court did not adopt the
NYIPLA’s suggested approach, the Court’s decision
acknowledged and addressed the concerns raised in our
brief. In particular, the thrust of the NYIPLA’s main
argument was that because critical information concern-
ing marketplace usage is not assessed by the TTAB, its
decision should not be given automatic preclusive effect
in a subsequent litigation. Some examples of how the
evidence presented in each forum differs are as follows:
(1) if the drawing for at least one of the marks is in stan-
dard character form, the TTAB will compare the marks
visually and phonetically without regard to the intended
stylization, whereas a court will compare the marks as
they appear in commerce, including the visual similari-
ties, as well as the marks’ actual pronunciation, styliza-
tion, and appearance; (2) the TTAB compares the goods
as they are identified in the application and registration,
which are oftentimes very broad and appear to overlap,
whereas a court will look to the actual services rendered
or goods sold bearing the mark; (3) if the channels of
trade and targeted consumers are not limited in either
the registration or application, the TTAB will presume
Supreme Court Trademark Decision Creates More
Questions Than Answers
By Dyan Finguerra-DuCharme*
© 2015 New York Intellectual Property Law Association, Inc. Page 2 April 2015/May 2015
www.nyipla.org
that the goods/services travel through normal channels
and are targeted to ordinary purchasers of the identi-
fied goods/services; in contrast, a court will consider
the actual channels of trade and targeted consumers,
including retail price points, packaging, advertising,
and merchandising markets.
The Court addressed these concerns by ruling that
“if the TTAB does not consider the marketplace usage
of the parties’ marks, the TTAB’s decision should ‘have
no later preclusive effect in a suit where actual usage in
the marketplace is the paramount issue.’” 135 S. Ct. at
1308 (quoting 6 J. Thomas McCarthy, Trademarks and
Unfair Competition § 32:101, at 32-247 (4th ed. 2014)).
In a concurring opinion, Justice Ginsburg echoed
the majority’s observation that “for a great many reg-
istration decisions issue preclusion obviously will not
apply,” because contested registrations are usually de-
cided based on a “ʻcomparison of marks in the abstract
and apart from their marketplace usage.’” Under those
circumstances, “ʻthere will be no [preclusion] of the
likel[ihood] of confusion issue.’” 135 S. Ct. at 1310
(Ginsburg, J., concurring) (quoting 6 McCarthy on
Trademarks § 32:101, at 32-247).
It remains to be seen how the B&B Hardware deci-
sion will affect practice before the TTAB. Often TTAB
proceedings are initiated to test the waters and/or to keep
the Register “clean.” Before B&B Hardware, the issue
was solely whether the applicant can register the mark,
not whether it can use the mark. Because of that critical
difference, parties often choose not to present the same
evidence before the TTAB that they would present in
federal court because the TTAB has been quite clear
that it looks only to the identification of goods in the
registration and application and presumes that a stan-
dard character mark can appear in any stylization. Now
litigants are in a quandary – do they submit marketplace
usage to the TTAB or do they stick to arguments related
to the identified goods and hope that the decision will not
be given preclusive effect? Does the TTAB have to con-
sider marketplace usage even if it broadens or narrows
the identified goods? How does the TTAB treat visual
and commercial impression similarities if the application
and registration are in standard character form yet the
stylization of the respective marks in the marketplace
are clearly distinctive and different? When is actual
usage not the paramount issue in an infringement case?
In response to a TTAB opposition filing, an ap-
plicant must now consider whether its resources are
better spent in a declaratory judgment action given that
there is a significant chance that the TTAB decision will
ultimately determine whether it may use the mark at is-
sue. If litigants are going to spend more money on the
issue of confusion, they might as well do so in federal
court where they can take advantage of live testimony,
broader survey designs, and live judicial intervention
throughout the case rather than just at oral argument
after trial briefing is complete.
TTAB Chief Administrative Trademark Judge
Gerard F. Rogers will be the keynote speaker at the
Trademark Law & Practice Committee’s annual Half-
Day Program set for July 15, 2015. The NYIPLA is
looking forward to hearing from Judge Rogers about the
TTAB’s reaction to B&B Hardware and gaining insights
with respect to proposed changes to the Trademark Trial
and Appeal Board Manual of Procedure (TBMP) in light
of the decision.
* Dyan Finguerra-DuCharme is a Partner
in Pryor Cashman’s Intellectual Property
and Litigation Departments. Ms. Finguerra-
DuCharme is also the Co-Chair of the NYIP-
LA’s Trademark Law & Practice Committee
and was Counsel of Record for the amicus
brief that the NYIPLA submitted in support
of the Respondents in B&B Hardware, Inc.
v. Hargis Industries, Inc.
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