Due Deference Requirement

The Supreme Court issued its first major trademark decision in more than a decade on Tuesday in B&B Hardware v. Hargis Industries, ruling that federal courts must defer to previously issued Trademark Trial and Appeal Board rulings when the issues that the two consider are identical.

The Court reached the decision by a 7-2 majority, overturning a ruling by the 8th Circuit Court of Appeals, which found that federal courts owed the TTAB no such deference. Justice Samuel Alito wrote for the majority and Justice Clarence Thomas, joined by Justice Antonin Scalia, wrote in dissent.

Ruling Ends Long Battle of B&B Hardware v. Hargis Industries

The decision brought to a close a nearly two-decade legal battle between two nuts-and-bolts manufacturers: B&B, which primarily works within the aerospace industry, and Hargis, which primarily manufactures bolts for sheet metal buildings. In 1996, Hargis came to B&B’s attention when it attempted to register the trademark “Sealtite.” B&B held a similar mark under “Sealtight,” which it had registered with the Patent and Trademark Office in 1993. B&B sued Hargis for trademark infringement, but a jury ruled against B&B in 2000, finding that its mark was too descriptive and had not acquired sufficient secondary meaning for trademark protection.

Hargis then attempted to cancel B&B’s mark via the TTAB, but in its decision, the Board neither cancelled B&B’s mark nor registered Hargis’s mark, finding that Hargis’s mark was too similar to B&B’s—in other words, a likelihood of confusion existed. Finally, B&B again sued Hargis for trademark infringement, and a jury once again ruled against B&B, finding that there was no likelihood of confusion, contrary to the Board’s finding.

During oral arguments before the Court, Hargis emphasized that the TTAB proceedings were too summary to preclude a full subsequent inquiry in federal court. It also pointed out that while a TTAB proceeding focuses narrowly on whether confusion exists between two marks’ resemblance, a federal court proceeding focuses more broadly on whether consumer confusion exists when two marks are used in commerce.

Thomas and Scalia Dissented on Due Deference Ruling

Ultimately, none of the justices seemed won over by the main thrusts of Hargis’s argument. Justices Thomas and Scalia dissented on the grounds that federal law does not facially justify giving TTAB decisions “preclusive effect in trademark cases.”

Now, TTAB decisions probably take on an even greater importance. When the board has its say, the parties involved likely cannot litigate that particular issue any further.

Sources: http://www.scotusblog.com/2014/12/argument-preview-justices-will-use-rare-look-at-trademark-law-to-consider-broad-and-narrow-conceptions-of-trademarks/ http://www.scotusblog.com/2014/12/argument-analysis-justices-unsettled-in-trademark-preclusion-dispute/ http://www.supremecourt.gov/opinions/14pdf/13-352_c0n2.pdf

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