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Is the TTAB falling?

Posted in Almost Advice

A commonly used forum to resolve trademark registration issues, which also commonly resulted in negotiated settlements over the use of mark, may no longer be so common. Today, the United States Supreme Court issued its heavily anticipated opinion in the B&B Hardware v. Hargis Industries case, which involved the issue of whether TTAB decisions on likelihood of confusion should have preclusive effect on a subsequent district court action. The Supreme Court held that a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion were met. Issue preclusion was not limited to those situations in which the same issue was before two courts. Rather, where a single issue was before a court and an administrative agency, preclusion also often applied. The 8th Circuit’s primary objection to issue preclusion was that the TTAB considered different factors. However, the Court held that the same likelihood of confusion standard applied to both registration and infringement. It did not matter that registration and infringement were governed by different statutory provisions. Neither did it matter that that TTAB and the 8th Circuit used different factors to assess likelihood of confusion. The Supreme Court found that the factors were not fundamentally different. Likelihood of confusion for purposes of registration was the same standard as likelihood of confusion for purposes of infringement. However, the Supreme Court also found that if the TTAB did not consider the marketplace usage of the parties’ marks, the TTAB decision would have no preclusive effect in a later suit where actual usage in the marketplace was the main issue.

The practical effect of this decision is that it will likely increase the burden on the district court docket. The TTAB has held on several occasions that because certain presumptions apply to unrestricted registrations, the marketplace reality given little, if any, probative value in the Board’s analysis of the likelihood of confusion. Accordingly, if a plaintiff’s case is stronger with the presumptions, it will begin the action at the TTAB. If the marketplace reality benefits the plaintiff, it will begin the action in district court. Likewise, if a defendant believes the marketplace reality benefits its defense, it will seek to suspend the TTAB proceeding instituted by the plaintiff in favor of a district court action.

Before instituting a cause of action against another party, trademark owners will have to engage in some pre-litigation planning to position the case in the most beneficial forum.