Collateral Estoppel Defense in Trademark Likelihood of Confusion Analysis

A recent opinion of the Trademark Trial and Appeal Board (“TTAB”) addressed the application of the collateral estoppel defense to a single factor in the likelihood of confusion analysis rather than to the ultimate outcome of a likelihood of confusion claim.

Monster Energy’s Opposition Claiming Likelihood of Confusion

In April 2021, Monster Energy Company (in whom the Coca-Cola Company now maintains an ownership interest) filed an opposition proceeding against Applicant Cheng Shin Rubber Ind. Co. claiming Applicant’s application for federal trademark registration of its “M” design was likely to cause confusion with and dilute Monster’s family of “M” claw-design marks, as shown below:

Applicant’s application identified an intent-to-use its Mark in connection with “tires” and “promoting sports competitions and events of others; promoting sports competitions for others; promotion of goods and services through sponsorship of sports events.” Monster Energy’s claw-design mark (or variations of that mark) was shown to be in use on “automobile wheels” and in connection with “sponsorship of athletes and motorsports events.” Monster Energy also asserted a claim against Applicant for lack of a bona fide intent to use the mark.

In May 2023, Applicant filed a motion seeking leave to amend its answer to assert the defense of collateral estoppel based on a recent ruling in a separate opposition proceeding pending between the same parties, and involving the same marks, but in connection with use on clothing and apparel. On the same date, Applicant filed its motion for summary judgment on Monster Energy’s claims of likelihood of confusion, dilution, and lack of bona fide intent.

Collateral Estoppel in Likelihood of Confusion Analysis

In an order dated October 19, 2023, TTAB first addressed Applicant’s request to amend its answer to assert the defense of collateral estoppel. TTAB took note of the prior proceeding at Monster Energy Co. v. Cheng Shin Rubber Ind. Co., Ltd., Opp. No. 91244820 (TTAB May 4, 2023) (the “Prior Proceeding”), involving the same parties and the same marks, but different goods and services. There, the Board issued a final decision denying Monster Energy’s claims for relief based on its conclusion that “each mark is so stylized differently that they bear no resemblance to one another” (Id. at 133) and “the [parties’] two marks are quite dissimilar” (Id. at 137). Although acknowledging that “[s]everal factors weigh in favor of finding confusion likely,” the Board ultimately “accord[ed] a great deal of weight to the overall dissimilarity of the marks and, in conjunction with [its] finding of weakness as to the mere use of a stylized letter M in connection with clothing[,]” concluded that “confusion [was] unlikely.” Id. at 139-40.

In light of the Board’s ruling in the Prior Proceeding, Applicant maintained that Monster Energy should be “collaterally estopped from relitigating the issue of similarity or dissimilarity of” the parties’ respective marks. (31 TTABVUE 17). Monster Energy responded that collateral estoppel did not apply because (1) the ruling in the Prior Proceeding was not yet final as the time for appeal had not passed; and (2) the applications involved in the two proceedings were for different goods and services. (35 TTABVUE 4-7). In reply, Applicant urged that the collateral estoppel doctrine can apply to a single likelihood of confusion factor, even where the collateral estoppel doctrine does not bar re-litigation of a likelihood of confusion claim as a whole. (38 TTABVUE 3-7).

TTAB Allows Monster Energy’s Motion to Assert Collateral Estoppel Defense

Noting first that there was no evidence of undue delay, prejudice to Monster Energy, or any bad faith or dilatory motive, and that this was the first time Applicant had moved to amend its pleading, the Board also found the collateral estoppel defense was not futile. After citing the general rule that “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim,’” the Board acknowledged that collateral estoppel would not apply to the Board’s ultimate ruling of no likelihood of confusion in the Prior Proceeding because that proceeding involved different goods and services. (40 TTAB 8, citing B&B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 113 USPQ2d 2045, 2051 (2015)). Nevertheless, the Board concluded it was not prohibited from applying the defense of collateral estoppel to individual likelihood of confusion factors, such as the similarity (or dissimilarity) of the marks at issue. Id. at 9. Accordingly, TTAB granted Applicant’s motion and allowed Applicant to amend its answer to assert the defense of collateral estoppel solely as to the similarity (or dissimilarity) of the marks at issue.

Having concluded that collateral estoppel applied to determine a complete lack of any similarity between the parties’ marks at issue, the Board then went on to evaluate Applicant’s summary judgment motion. TTAB denied Applicant’s motion as to the likelihood of confusion and dilution claims on the basis that a fact issue existed regarding the balance of the likelihood of confusion factors (particularity any similarity in connotation or commercial impression) as applied to the goods and services at issue (which were not a part of the Prior Proceeding). Finally, the Board granted Applicant summary judgment on Monster Energy’s claim of no bona fide intent to use Applicant’s Mark based on evidence that Applicant’s wholly owned subsidiary MAXXIS had already used the mark in connection with producing and giving away promotional cups at a racing event, the MAXXIS house mark was in use in connection with promotional items and related goods and services, and Applicant’s Mark had been in use in combination with the MAXXIS mark.

This Monster Energy opinion demonstrates important nuance surrounding application of the collateral estoppel defense to one or more factors of the likelihood of confusion analysis as opposed to the ultimate conclusion reached as to likelihood of confusion claim and could provide a path forward for defendants who have experienced repeat proceedings and/or litigation with an opponent related to the same marks.

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This article has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2024 Klemchuk PLLC