Did TTAB proceedings — until now considered a relatively obscure branch of IP litigation, conducted before an administrative body of which most attorneys are blissfully unaware — just assume greater importance? That seems to be the general reaction to the U.S. Supreme Court’s holding in B&B Hardware v. Hargis Industries last month.
B&B Hardware took an unusually aggressive approach to its trademark dispute with Hargis, which centered on the likelihood of confusion between B&B’s SEALTIGHT mark and Hargis’ SEALTITE. B&B brought a TTAB opposition proceeding and won, preventing SEALTITE from being registered (despite some differences between the products). B&B then went to court seeking an injunction against Hargis’ actual use in commerce of the mark, arguing that Hargis should be precluded, because of the TTAB ruling, from contesting likelihood of confusion between the marks. B&B lost this argument, and ultimately lost the trial, when the jury ruled there was no likelihood of confusion. Many litigants would have folded up the tent and gone home at that point. But B&B appealed the preclusion issue to the Eighth Circuit, and when a majority of that panel disagreed, it took the issue to the Supreme Court.
The Supreme Court reversed and remanded, holding in a 7-2 decision that B&B’s preclusion argument was correct. Administrative agency decisions can have preclusive effect in court cases, the court clarified, and the legal standard for likelihood of confusion is basically the same in registration and infringement disputes. There is one key difference, of course: the TTAB looks at marks only as set forth in the application/registration, whereas a court evaluates them as actually used in commerce. So, preclusion only applies if there is no substantial difference between the two usages:
If a mark owner uses its mark in ways that are materially the same as the usages included in its registration application, then the TTAB is deciding the same likelihood-of-confusion issue as a district court in infringement litigation. By contrast, if a mark owner uses its mark in ways that are materially unlike the usages in its application, then the TTAB is not deciding the same issue. . . . [and] the TTAB’s decision should have no later preclusive effect.
The court clarified that the differences must be “material,” and not mere “trivial variations,” but left it to future decisions to clarify application of this standard.
Some of the commentary following the B&B decision has implied that this is a game-changing ruling: that TTAB cases, heretofore litigated in the backwaters on small budgets, will now take on higher priority because they can now determine the outcome of court cases.
Not so fast, say many of us who have been litigating in the TTAB. Some TTAB cases are litigated to “keep the register clean,” with no intention of following up with a court case unless the client starts to actually lose sales revenue (which is fairly rare); this decision should have little effect on that category. Regardless, most TTAB cases — or the minority that didn’t settle early on, at least — have been taken seriously and litigated thoroughly all along, complete with depositions and sometimes surveys. Finally, in many (if not most) cases there are at least some differences in how a mark is used in commerce, as opposed to how it is set forth in an application or registration — creative lawyers will very often be able to make colorable arguments against preclusion, even under the B&B analysis. (Indeed, the B&B case itself may or may not come out differently on remand.) We may see more de novo appeals of TTAB rulings in federal district court than previously, true; otherwise, the B&B ruling gave the TTAB its moment in the sun, but seems unlikely to be a true game-changer.