B&B Hardware, Inc. v. Hargis Industries, Inc.

135 S. Ct. 1293, 191 L. Ed. 2d 222, 25 Fla. L. Weekly Fed. S 146, 575 U.S. 138, 2015 U.S. LEXIS 2119, 83 U.S.L.W. 4176, 113 U.S.P.Q. 2d (BNA) 2045
Supreme Court of the United States·Decided March 24, 2015·No. 13–352.·Published·Cited by 198 cases

Opinions

Justice ALITOdelivered the opinion of the Court.

Sometimes two different tribunals are asked to decide the same issue. When that happens, the decision of the first tribunal usually must be followed by the second, at least if the issue is really the same. Allowing the same issue to be decided more than once wastes litigants' resources and adjudicators' time, and it *1299encourages parties who lose before one tribunal to shop around for another. The doctrine of collateral estoppel or issue preclusion is designed to prevent this from occurring.

This case concerns the application of issue preclusion in the context of trademark law. Petitioner, B & B Hardware, Inc. (B & B), and respondent Hargis Industries, Inc. (Hargis), both use similar trademarks; B & B owns SEALTIGHT while Hargis owns SEALTITE. Under the Lanham Act, 60 Stat. 427, as amended, 15 U.S.C. § 1051 et seq.,an applicant can seek to register a trademark through an administrative process within the United States Patent and Trademark Office (PTO). But if another party believes that the PTO should not register a mark because it is too similar to its own, that party can oppose registration before the Trademark Trial and Appeal Board (TTAB). Here, Hargis tried to register the mark SEALTITE, but B & B opposed SEALTITE's registration. After a lengthy proceeding, the TTAB agreed with B & B that SEALTITE should not be registered.

In addition to permitting a party to object to the registration of a mark, the Lanham Act allows a mark owner to sue for trademark infringement. Both a registration proceeding and a suit for trademark infringement, more-over, can occur at the same time. In this case, while the TTAB was deciding whether SEALTITE should be registered, B & B and Hargis were also litigating the SEALTIGHT versus SEALTITE dispute in federal court. In both registration proceedings and infringement litigation, the tribunal asks whether a likelihood of confusion exists between the mark sought to be protected (here, SEALTIGHT) and the other mark (SEALTITE).

The question before this Court is whether the District Court in this case should have applied issue preclusion to the TTAB's decision that SEALTITE is confusingly similar to SEALTIGHT. Here, the Eighth Circuit rejected issue preclusion for reasons that would make it difficult for the doctrine ever to apply in trademark disputes. We disagree with that narrow understanding of issue preclusion. Instead, consistent with principles of law that apply in innumerable contexts, we hold that a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met. We therefore reverse the judgment of the Eighth Circuit and remand for further proceedings.

I

A

Trademark law has a long history, going back at least to Roman times. See Restatement (Third) of Unfair Competition § 9, Comment b(1993). The principle underlying trademark protection is that distinctive marks-words, names, symbols, and the like-can help distinguish a particular artisan's goods from those of others. Ibid.One who first uses a distinct mark in commerce thus acquires rights to that mark. See 2 J. McCarthy, Trademarks and Unfair Competition § 16:1 (4th ed. 2014)(hereinafter McCarthy). Those rights include preventing others from using the mark. See 1 A. LaLonde, Gilson on Trademarks § 3.02[8] (2014) (hereinafter Gilson).

Though federal law does not create trademarks, see, e.g., In re Trade-Mark Cases,100 U.S. 82, 92, 25 L.Ed. 550 (1879), Congress has long played a role in protecting them. In 1946, Congress enacted the Lanham Act, the current federal trademark scheme. As relevant here, the Lanham Act creates at least two adjudicative mechanisms to help protect marks. First, *1300a trademark owner can register its mark with the PTO. Second, a mark owner can bring a suit for infringement in federal court.

Registration is significant. The Lanham Act confers "important legal rights and benefits" on trademark owners who register their marks. 3 McCarthy § 19:3, at 19-21see also id.,§ 19:9, at 19-34 (listing seven of the "procedural and substantive legal advantages" of registration). Registration, for instance, serves as "constructive notice of the registrant's claim of ownership" of the mark. 15 U.S.C. § 1072. It also is "prima facie evidence of the validity of the registered mark and of the registration of the mark, of the owner's ownership of the mark, and of the owner's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate." § 1057(b). And once a mark has been registered for five years, it can become "incontestable." §§ 1065, 1115(b).

To obtain the benefits of registration, a mark owner files an application with the PTO.§ 1051. The application must include, among other things, "the date of the applicant's first use of the mark, the date of the applicant's first use of the mark in commerce, the goods in connection with which the mark is used, and a drawing of the mark." § 1051(a)(2). The usages listed in the application-i.e., those goods on which the mark appears along with, if applicable, their channels of distribution-are critical. See, e.g., 3 McCarthy § 20:24, at 20-83("[T]he applicant's right to register must be made on the basis of the goods described in the application"); id.,§ 20:15, at 20-85 (explaining that if an "application does not delimit any specific trade channels of distribution, no limitation will be" applied). The PTO generally cannot register a mark which "so resembles" another mark "as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1052(d).

If a trademark examiner believes that registration is warranted, the mark is published in the Official Gazette of the PTO. § 1062. At that point, "[a]ny person who believes that he would be damaged by the registration" may "file an opposition." § 1063(a). Opposition proceedings occur before the TTAB (or panels thereof). § 1067(a). The TTAB consists of administrative trademark judges and high-ranking PTO officials, including the Director of the PTO and the Commissioner of Trademarks. § 1067(b).

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B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293, 191 L. Ed. 2d 222, 25 Fla. L. Weekly Fed. S 146, 575 U.S. 138, 2015 U.S. LEXIS 2119, 83 U.S.L.W. 4176, 113 U.S.P.Q. 2d (BNA) 2045 (U.S. 2015).

135 S. Ct. 1293 (B&B Hardware, Inc. v. Hargis Industries, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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