I’d promised I’d wait on this, but I couldn’t, and you’ll see why. Here’s my take on today’s Supreme Court decision in B&B Hardware v. Hargis Industries Inc., which — notwithstanding my reluctance to be accused of being that hammer to which everything looks like a nail — may very well have implications for some of the pending litigation involving that popular topic of late, Section 2(a) of the Lanham Act.
First, the analysis of the main holding.
I was struck by the court’s point that Congress could not have been too concerned about making efficiency or cost-effectiveness a priority in the registration process when it authorized de novo challenges of TTAB decisions under 15 U. S. C. §1071(b). Having established that there was nothing in the Lanham Act that made TTAB decisions different from other agency determinations for purposes of issue preclusion principles, the court then stated that preclusion based on TTAB determination could be applied following those principles. In other words, there is preclusion where “the issues in the two cases are indeed identical and the other rules of collateral estoppel are carefully observed.”
What the Eighth Circuit had said, of course, was that under these principles, preclusion did not apply, because the “rules” were not be the same: different standards are applied in evaluating likelihood of confusion in inter partes proceedings as opposed to District Court actions.
Certainly I agree with the Supreme Court that the different circuits’ formulations of the likelihood of confusion standards and the way likelihood of confusion is understood and applied in the PTO do not constitute different “rules”; practitioners know these are all essentially different formulations of the same test – they certainly should be!
My concern was far more with the procedural differences between the two kinds of proceedings. The B&B decision deals with this issue in rather cursory fashion, stating that
The ordinary law of issue preclusion, however, already accounts for those “rare” cases where a “compelling showing of unfairness” can be made.
This formulation is problematic, because, while there may be (I hope) exceptions, there are few times a court is going to be inclined to find “compelling unfairness” in a TTAB determination. Moreover, the argument, after all, is not about unfairness, but differentness. Under the Supreme Court’s analysis, however, there’s no room for that; if there’s preclusion, it’s presumptive, and you need that “unfairness” level of badness to uproot the TTAB’s ruling. That’s a problem.
As the court says, however, there is a solution for a party worried about how a TTAB finding on likelihood of confusion might affect its rights: De novo review of TTAB decisions in the District Court, with full evidentiary submissions — with all the expense that entails. The only alternative appears to be amendment of the Lanham Act, which is probably one thing that should be considered to establish a streamlined, economical quality of PTO proceedings the Supreme Court has determined is not a policy of the Act now.
So… what was I saying about Section 2(a)? Read More…