INTA and AIPLA Weigh In on Questions of TTAB Issue Preclusion and Deference before the U.S. Supreme Court


On July 1, 2014, the U.S. Supreme Court granted certiorari in B&B Hardware Inc. v. Hargis Industries, Inc., to determine whether a finding by the Trademark Trial and Appeal Board ("TTAB") of likelihood of confusion precludes a respondent from relitigating that issue in infringement litigation, and, if issue preclusion does not apply, whether the district court was obliged to give deference to the TTAB's finding of a likelihood of confusion absent strong evidence to rebut it. In its brief filed on September 4, 2014, B&B claims that issue preclusion is appropriate where the TTAB has determined the question of likelihood of confusion since the concept is the same under the Lanham Act in both registration and infringement disputes. "'Likelihood of confusion' is one concept, not two. The comparison between two marks, and the goods on which they appear, works the same way whether the underlying dispute concerns infringement, registration, or both."

The circuits are split on the issue. The Third and Seventh Circuits give TTAB rulings preclusive effect when the facts and analyses sufficiently line up. The Second Circuit does so only in cases where the TTAB considered evidence about confusion "in the entire marketplace context." Other circuits, including the Fifth and the Eleventh Circuits, refuse issue preclusion but give TTAB rulings varying degrees of deference. In the case of B&B Hardware Inc., the Eighth Circuit not only refused to give the underlying TTAB decision preclusive effect, but also refused to afford it any deference.

On September 11, 2014, the International Trademark Association ("INTA") and the American Intellectual Property Law Association ("AIPLA") both filed amicus briefs weighing in on the questions of issue preclusion and deference. For its part, INTA urges the Court to rule that TTAB determinations on the likelihood of confusion do not have preclusive effect in subsequent civil court proceedings, but that district courts should determine, on a case-by-case basis, whether, and to what extent, the TTAB's determinations should be afforded deference. If deference is granted, then INTA urges that any such deference should be limited to fact issues that were identical and fully litigated and should not prevent a party from offering other evidence and arguments. INTA's position is based on the differences between TTAB and district court adjudications. The TTAB has a limited jurisdictional mandate to determine the right to registration, whereas district courts determine the right to use a mark. As a result, the TTAB typically focuses only on an abstract comparison of the marks and goods as listed in the application rather than on how the litigants' marks actually are used, and perceived by consumers, in the marketplace. "The TTAB's...comparison of the marks as they appear on paper is no substitute for the type of real-world, evidence-based analysis undertaken in civil litigation."

AIPLA, on the other hand, essentially adopts the Second Circuit approach, urging that TTAB decisions may indeed have preclusive effect, but only in appropriate and narrow circumstances. Contrary to INTA, AIPLA emphasizes that the determination of issue preclusion should not be based on "functional differences between the TTAB and district courts, on high-level descriptions of the issues, or on differences in a list of analytical factors used by the various tribunals to decide likelihood of confusion." Rather, the determination of issue preclusion requires a fact-intensive inquiry into the record presented and considered by a previous tribunal and the issues to be decided in the subsequent proceeding. That said, AIPLA also urges the Court to rule narrowly. "Issue preclusion should not apply where, for instance, the Board simply compared the marks as they appeared in the trademark applications and registrations at issue, rather than comparing the manner in which they appeared as used in the marketplace, which is the analysis typically conducted in trademark infringement lawsuits." As a result, while TTAB decisions can have preclusive effect, it should be the "exception, not the rule." AIPLA further urges that, if a TTAB decision is not afforded preclusive effect because the issue is not the same, then no deference should be given to the TTAB findings. Deference would only be appropriate where a TTAB decision is denied preclusive effect for other reasons.

The respondent's brief is due on October 24, 2014, and argument before the U.S. Supreme Court is set for December 2, 2014. We’ll continue to watch this case as it develops.