In a 7-2 decision authored by Justice Alito, the Supreme Court held on March 24, 2015, that issue preclusion may apply to Trademark Trial and Appeal Board (TTAB) decisions.^[1] The case, B&B Hardware, Inc. v. Hargis Industries, Inc., sought to determine:

1. Whether the TTAB’s finding of a likelihood of confusion precludes Hargis from relitigating that issue in infringement litigation, in which likelihood of confusion is an element.

2. Whether, if issue preclusion does not apply, the district court was obliged to defer to the TTAB’s finding of a likelihood of confusion absent strong evidence to rebut it.^[2]

As discussed in an earlier Snippets article,^[3] this case involved both an opposition before the TTAB and an infringement action in federal court. In the TTAB proceeding, the TTAB sustained B&B’s opposition and denied Hargis’s registration of the SEALTITE mark, concluding that the marks were “substantially identical” and “used on closely related products,” thus, likely to cause confusion.^[4] However, in the infringement action, both the district court and the Eighth Circuit refused to accord a preclusive effect to the TTAB’s decision on likelihood of confusion.^[5]

The Supreme Court held that an agency decision, such as that of the TTAB, may be grounds for issue preclusion.^[6] As an initial matter, the Court found nothing in the Lanham Act that would forbid issue preclusion.^[7] The Court also noted that:

What matters here is that registration is not a prerequisite to an infringement action. Rather, it is a separate proceeding to decide separate rights. Neither is issue preclusion a one-way street. When a district court, as part of its judgment, decides an issue that overlaps with part of the TTAB’s analysis, the TTAB gives preclusive effect to the court’s judgment.^[8]

In addition, the Court also rejected arguments that issue preclusion should never be available because the TTAB applies different factors in accessing likelihood of confusion and TTAB proceedings are procedurally different than court proceedings.^[9] Finally, the Court rejected the argument that the stakes are lower in TTAB proceedings than in court actions, noting the benefits of registration.^[10]

Ultimately, the Court held that “[s]o long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply.”^[11]

In view of this decision, trademark practitioners should advise clients to treat TTAB proceedings with the same seriousness as federal court proceedings.