Collateral Estoppel of TTAB Ruling and The Race to the Courthouse

In B&B Hardware, Inc. v. Hargis Indus., 135 S. Ct. 1293 (2015), the Supreme Court recently ruled that collateral estoppel at a district court applies to decisions adjudicated by the Trademark Trial and Appeal Board (TTAB) so long as “other ordinary elements of issue preclusion are met.” However, because the context of the “likelihood of confusion” determination is manifestly different between decisions at the TTAB and a district court, there should be no issue preclusion at a district court in a determination of a likelihood of confusion.

Context of the “likelihood of confusion” determination

In a district court proceeding, a claim of trademark infringement arises out of an injury from someone using the plaintiff’s mark in commerce. The owner of a registered mark is suing someone for the damages caused by their actual sale, offer for sale, or advertising of goods or services under the mark. The district court considers likelihood of confusion in the context of use of the mark, looking at the actual mark. See, e.g., Jim Beam Brands Co. v. Beamish & Crawford Ltd., 937 F.2d 729, 735 (2d Cir. 1991)(in “determining the similarity of marks in an infringement action, a court must examine the visual appearance of each mark in the context of its use.”); see also Kemp v. Bumble Bee Seafoods, Inc., 398 F.3d 1049, 1054 (8th Cir. 2005)(“[O]ur comparison of the similarity between marks and products [for trademark infringement] must occur in a context that recognizes how consumers encounter the products and how carefully consumers are likely to
scrutinize the marks”).

In contrast, at the TTAB, the claim is that opposer believes it would be damaged by registration of another’s mark (either in a cancellation proceeding by continued registration of the mark or in an opposition proceeding opposing application for a mark). The claim is based not on actual use of the mark in commerce, but rather only on the content of the registration application. In other words, the claim is based on the goods and services as listed in the application and only as to the goods listed on that application, regardless of actual usage and the context of actual usage. See In re Infinity Broadcasting Corp. of Dallas, 60 U.S.P.Q.2d 1214, 1218 (T.T.A.B. 2001)(noting that “in Board proceedings, likelihood of confusion is determined independent of the context of actual usage”).

These two different contexts are driven by different purposes, and use different procedures with different legal presumptions. Justice Ginsburg acknowledged this in her concurrence, noting that because TTAB contests are usually based on “a comparison of the marks in the abstract and apart from their marketplace usage,” there will usually be no issue preclusion. She repeats the majority’s dicta that “for a great many registration decisions issue preclusion obviously will not apply.” However, neither the majority nor Justice Ginsburg adequately address the different types of facts which will be considered in the two different tribunals.

Legal Presumptions

One of the key differences in legal standards between TTAB proceedings and district court proceedings presumption given to the registrant at the TTAB. At the TTAB, the owner of a registered mark has all doubts resolved in their favor. “If there is any doubt as to whether there is a likelihood of confusion, that doubt must be resolved in favor of the prior registrant.” TMEP § 1207.01(d)(i)(citations omitted); see also Hewlett-Packard Co. v. Packard Press, Inc., 281 F.3d 1261, 1265 (Fed. Cir. 2002) (“This court resolves doubts about the likelihood of confusion [in TTAB proceedings] against the newcomer because the newcomer has the opportunity and the obligation to avoid confusion with existing marks.”).

In contrast, at the district court, the owner of the mark has no such assumption in their favor. While the Supreme Court did note that the burdens are the same, the Court did not address the presumption that exists in favor of the registrant at the TTAB. For example, at the TTAB, there may be doubt as to whether there is likelihood of confusion, but that doubt is resolved in favor of the prior registrant. At the district court, the plaintiff would have no such presumption in their favor. If this presumption changes the burden of proof at all, issue preclusion should not apply.

Ironically, the Supreme Court’s attempt to address the fact that the actual use of the mark is often of a different scope than that in the application leaves the issue unresolved. The Court stated:

If a mark owner uses its mark in ways that are materially the same as the usages included in its registration application, then the TTAB is deciding the same likelihood-of-confusion issue as a district court in infringement litigation. By contrast, if a mark owner uses its mark in ways that are materially unlike the usages in its application, then the TTAB is not deciding the same issue. Thus, if the TTAB does not consider the marketplace 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.

Thus, the question is left unresolved of what happens if the use is not “different” but is “narrower.” Applicants often use broad terminology when describing goods or services in a trademark application, while the actual use of the goods or services in commerce are a narrow subset. For example, one product could be a dietary and nutritional supplement helpful in treating intestinal pain, while the other is dietary and nutritional supplement helpful in bodybuilding. In such a scenario, the TTAB could find a likelihood of confusion based on the identical goods and services, while a district court would find no confusion based on a finding that most customers would not believe that a body building supplements originated from the same source as a homeopathic remedy for Krohn’s disease.

Looking Forward

In light of B&B Hardware, those who have their trademark applications opposed may wish to race to the courthouse and seek a declaratory judgment in a jurisdiction with a quick docket. This may avoid a later court following a TTAB decision finding a likelihood of confusion, even though the actual goods or services at issue are less alike than the identification of goods or services in a trademark application might suggest.