Yesterday, the Supreme Court held in B&B Hardware v. Hargis Industries that likelihood-of-confusion decisions by the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB”) can have preclusive effect in federal court.

Hargis applied to register the mark SEALTITE and B&B opposed, based on its registration for SEALTIGHT.  The TTAB sustained B&B’s opposition, even though the marks would be used for different goods in different markets.  In a contemporaneous federal suit, the district court gave no deference to the TTAB decision and held that SEALTITE was not likely to cause confusion with SEALTIGHT.  Affirming, the Eighth Circuit reasoned that TTAB decisions are not entitled to preclusive effect because the TTAB applied different factors to determine likelihood of confusion, the TTAB placed too much emphasis on the appearance and sound of the marks, and different parties bore the burden of persuasion in the opposition proceeding and infringement suit.

Reversing, the Supreme Court held that “issue preclusion applies where ‘the issues in the two cases are indeed identical and the other rules of collateral estoppel are carefully observed.’”  The same likelihood-of-confusion standard applies in the TTAB and federal courts, as the operative language of the relevant statutes is essentially identical, even though the TTAB does not consider the same list of “factors” as courts in some circuits.  Further, any inquiry regarding procedural differences should focus not on the differences themselves, but on the quality of the procedures available in the different tribunals.  Rejecting Hargis’s argument that procedural differences in the TTAB weigh against giving preclusive effect to its decisions, the Court found that, at least in general, the TTAB’s procedures are equivalent to those in federal courts.

Not all TTAB decisions will have preclusive effect, because not all will meet the ordinary elements of issue preclusion.  For instance, “if the TTAB does not consider the market-place 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.’”  Even with its limits, B&B Hardware makes TTAB proceedings more important for those who enforce trademarks and those who defend against infringement.