Last week the Supreme Court granted certiorari to determine whether decisions of the Trademark Trial and Appeals Board (TTAB) concerning likelihood of confusion preclude relitigating that issue in subsequent infringement litigation. If there is not preclusive effect, then the court will decide whether the district court must still refer to the TTAB’s findings on likelihood of confusion absent strong evidence to rebut those findings.
The TTAB decided that Hargis Industries Inc., doing business as Sealtite Building Fasteners, (Hargis) could not trademark the name “Sealtite” because of likelihood of confusion with B&B Hardware Inc.’s (B&B) trademark “Sealtight Technology.” In a subsequent Lanham Act action, B&B sued Hargis for infringement. The district court ultimately found no infringement and the Eighth Circuit affirmed with one dissent.
The district court held that decisions of the TTAB do not have preclusive effect on subsequent litigation. An administrative agency’s factual decisions may not trump an Article III court. On appeal, the Eighth Circuit approached the issue somewhat differently concluding that the likelihood of confusion standard which the TTAB uses is not identical to that which courts apply and thus is not binding on those courts.
The dissent cites decisions of the Supreme Court in which the court suggests that giving preclusive effect to administrative agency decisions is appropriate:
“[T]he Supreme Court more recently emphasized that ‘giving preclusive effect to administrative factfinding serves the value underlying general principles of collateral estoppel: enforcing repose.’ Univ. of Tenn. v. Elliott, 478 U.S. 788 , 798 (1986). Therefore,’”[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.’ Id. at 797-98 (quoting United States v. Utah Constr. & Mining Co., 384 U.S. 394 , 422 (1966)). There is good reason to apply this general proposition to decisions of the Trademark Board. See Jean Alexander Cosmetics, Inc. v. L’Oreal USA, Inc., 458 F.3d 244 , 250-56 (3d Cir. 2006) (applying collateral estoppel to a decision of the Trademark Board on likelihood of confusion).”
The Court invited the Solicitor General to file a brief expressing the views of the United States on the propriety of a grant of certiorari. In response, and because the circuit courts were not in agreement on the proper standard, the Solicitor General urged the Court to grant certiorari. In so doing the Solicitor General set forth the following standard which he urged the Court to adopt:
“[I]ssue preclusion often turns on whether the actual usage of the marks at issue in the infringement action differs materially from the usage of the marks set forth in the application for registration and in the opposer’s prior registration submitted in the board proceedings. When the usages adjudicated in the two proceedings are materially identical, or when the usages at issue in the infringement action represent a subset of the usages adjudicated in the board proceeding, issue preclusion applies. But when the infringement action concerns usages not ruled upon by the board, issue preclusion does not apply to those additional usages.”
The suggested approach of the Solicitor General makes sense. In prior cases, the Court has expressed a willingness to allow preclusive effect to administrative findings. The Solicitor General’s brief acknowledges this and logically argues for preclusive effect only to those issues actually litigated before, and determined by, the TTAB.