Introduction

B&B Hardware Inc (“The Petitioner”) sells fasteners used in aerospace. The Petitioner registered with the trademark- ‘SEALTIGHT’ in 1993. On the other hand, Hargis Industries (“The Respondent”) sells self-drilling screws used in the construction industry. In 1996, the Respondent tried to register its trademark, ‘SEALTITE’, with the United States Patent and Trademark Office (USPTO).

The Petitioner opposed the registration and sued the Respondent for infringement, claiming SEALTITE is too similar to its trademark, SEALTIGHT, thus, capable of confusing customers.

The Trademark Trial and Appeal Board (“TTAB”) heard the case, determined that there was confusion between the two marks, and denied the Respondent’s application.

Discussion

The Respondent later brought an infringement suit before a District Court. The Petitioner argued that the Respondent was precluded from contesting the likelihood of confusion decided by TTAB. The District Court disagreed and held that  TTAB was not an Article III court. As a result, it needed not to give deference to TTAB’s decision.

The District Court refused to admit the decision of TTAB into evidence. Therefore, the jury found in favour of the Respondent. The Petitioner appealed the decision before the United States Court of Appeals (the “Eighth Circuit”). The Eighth Circuit affirmed and upheld the decision of the District Court. The affirmation was by using a likelihood of confusion test slightly different from that of TTAB. The Petitioner further appealed to the Supreme Court.

At the Supreme Court, the question for determination was whether a finding of the likelihood of confusion by TTAB could be re-litigated. Out of 9 Justices, 7 gave the majority opinion, while 2 dissented.

The Supreme Court held that preclusion often applied where a court or administrative agency has a single issue for determination. Therefore, parties must have had adequate opportunity to litigate the issue of facts. Also, the administrative agency must determine the issue properly and in a judicial capacity.

Unless the law or Congress stated otherwise, re-litigation stood precluded. The Supreme Court noted that TTAB’s decision met the standards of trademark preclusion. As a result, the issue ought not to be re-litigated at the District Court. Justice Ginsburg concurred entirely to this decision.

The Supreme Court found that although TTAB could determine only trademark registration issues. Nevertheless, the likelihood of confusion standards for registration and infringement were the same.

The Supreme Court also found that although parties could seek judicial review of agencies’ decisions, nothing in the federal trademark laws prohibited issue preclusion.

Justice Thomas gave the leading dissenting opinion. He opined that administrative agencies’ decisions should not qualify for issue preclusion. He said Congress authorized TTAB to determine rights from trademark registration only. TTAB did not have the power to decide questions of infringement.

Justice Thomas held that Congress allowed provision for judicial review. Thus, issue preclusion was not the intendment of the lawmakers.

Conclusion

The Supreme Court submitted that there was no reason to doubt TTAB’s procedures as the procedure involved fairness, quality, and extensiveness.