B&B Hardware: The TTAB, the trademark bloggers and the likelihood of preclusion (Updated)
A trademark case involving LIKELIHOOD OF CONFUSION (the legal thing, not the fun blog) got unusual Supreme Court attention last week, as you doubtless know by now. [UPDATE: Here’s the ruling in B&B Hardware, handed down on March 24, 2015; but keep reading!] Good summary here by Sutherland Asbill & Brennan LLP (link added by me):
The U.S. Supreme Court heard oral argument last week in a much anticipated trademark matter, B&B Hardware Inc. v. Hargis Industries Inc. et al. The primary question presented was whether a likelihood-of-confusion* determination in a contested administrative proceeding regarding trademark registration should have preclusive effect in future trademark infringement litigation between the same parties over use of the same mark in commerce. The justices also considered, if the administrative determinations do not have preclusive effect, what deference, if any, may be appropriate at the litigation stage. . . .
The main question at oral argument focused on whether the likelihood of confusion analyses in TTAB proceedings and infringement litigations are sufficiently similar to support preclusion. . . .
Counsel for Hargis Industries, arguing against preclusion, attempted to explain the distinction between the confusion analyses in the two venues. For example, counsel argued, the TTAB does not consider in its likelihood-of-confusion analysis how the parties actually use their marks, but rather compares the marks only as they appear on the respective registrations or applications. Further, counsel argued, the TTAB does not consider the goods with which the marks are actually used. Instead, the goods as claimed in the registration or application frame the TTAB’s analysis. Accordingly, by way of example, counsel asserted that if an applicant were to claim a broad range of goods in its application for a mark, it may be denied registration, even if its comparatively narrow use of the mark would not be sufficient to support a finding of infringement. The justices appeared to struggle with the examples provided by counsel for Hargis of the differences between the likelihood-of-confusion inquiries.
In questioning B&B Hardware’s counsel, the justices explored whether the different stakes before the TTAB did not warrant an exception to the general rules of issue preclusion. The justices also questioned whether Congress intended TTAB proceedings to provide expeditious resolution to disputes between rightsholders and, if so, whether a ruling effectively upping the stakes of those proceedings would defeat congressional intent. Finally, the justices queried why ordinary rules of issue preclusion should not apply, with exceptions applicable where justified by the circumstances of each individual case.
OK, but the main question is, what are they saying at the trademark blogs? I can’t have an opinion, after all, until I see what everyone else’s is!First, good old Rebecca Tushnet, who can always be counted on to have an opinion, and to say it:
When I read the SG’s brief advocating for preclusion as an ordinary result, I was concerned that there was limited understanding of what a registration/opposition proceeding actually is compared to an infringement case. For example, the SG assumed that in every case, the right at issue in an infringement case could only be bigger than the registration, because the right might also be based on uses on goods for which there wasn’t a registration. This is of course completely wrong: the registration covers all the goods listed, traveling in all the channels in which such goods ordinarily travel unless there’s an explicit restriction, at any price, and also covers the mark as registered and does not include matter that’s not part of the registration. Thus, it is both possible and indeed commonplace for a registration cited as a 2(d) bar to have a bigger footprint than it would in an infringement case, where differences in actual sales channels, price, house marks, and other marketplace features that in fact distinguish the two uses in question can prevent a finding of likely confusion. See, e.g., J.T. Colby & Co. v. Apple Inc., No. 13-2227 (2d Cir. Sept. 29, 2014) (finding no likely confusion between Apple’s iBooks mark for electronic books and plaintiff’s ibooks mark for electronic books, because plaintiff’s mark was “frequently surrounded by contextual information that associates it with a publishing company, including the publishing company’s name and location, the title of a book and its author, and other copyright information, while Apple’s mark “appear[ed] exclusively on Apple-branded hardware.”).
But it got worse at oral argument, when the Assistant SG, who I’m sure was just doing his job but seems not to be a subject matter expert, talked about the role of consumer surveys and completely misstated the law . . .
Without presenting the mark as it’s actually used in context, your survey is not worth very much and might even face exclusion, since it doesn’t test the question at issue: will this use, with all its attendant circumstances, cause confusion?
So too the redoubtable Steve Baird at Duetsblog:
We sounded the alarm exactly six months ago about a trademark case of great importance to brand owners: B&B Hardware v. Hargis Industries. Earlier this week, the U.S. Supreme Court heard oral argument in the case, and here is a link to the transcript (hat tip to Draeke).
As you will recall, our concern in sounding the alarm is that the Supreme Court might follow the advice of the Solicitor General (SG) who essentially equates the right to register with the right to use a trademark, seemingly suggesting the right to [exclusive] use is dependent on the right to register . . .
We liked INTA’s amicus brief far better, calling for a black and white test against preclusion:
INTA’s amicus brief is the only one to score an A. INTA’s amicus brief did a very impressive job of communicating the clear difference between how likelihood of confusion is addressed at the TTAB in determining the right to register, as compared to how likelihood of confusion is addressed in federal courts across the country — with brand owners having far more at stake in the latter, including injunctive relief, damages, and attorneys fees.
So, imagine my pleasant surprise in reading the Supreme Court transcript (because I couldn’t just walk down the street to hear the live oral argument like Erik Pelton) that Justice Ginsburg appeared receptive to our channeling — coming out of the gates hard against preclusion, within the first 75 words uttered by counsel for Petitioner B&B Hardware . . .
Imagine! It’s not hard to. Professional trademark lawyers seem pretty well aligned on this one. Here, for example, my friend Tal Benschar, in comments written last year at John Welch’s TTABlog®:
The inquiry of likelihood of confusion in a cancellation or opposition proceeding before the TTAB is different from the inquiry in an infringement case in federal court. It is basic TTAB law that it considers a use of the trademark for the goods listed to the full extent covered by the application or registration, regardless of factors not in the application/registration, for example price, market segment, use of other marks (such as house marks) etc. OTOH, it is basic trademark law that to determine infringement, all these factors — what the defendant is actually doing, not what it could do — must be taken into account.
In discussing a preclusive effect, we are discussing collateral estoppel, or issue preclusion, not claim preclusion. (The TTAB lacks jurisdiction to entertain an infringement claim, so there is no claim preclusion.)
A basic requirement of collateral estoppel is that the issue decided in the first case must be the same as what is at issue in the second case. In these kind of cases, that requirement is not meant. Even though both are labelled “likelihood of confusion,” the inquiries are different. I accordingly don’t see how preclusion can apply (unless there is something very unusual about the TTAB proceeding or the registration at issue.)
There are some other good, feisty comments on John’s blog here, too, but they’re all anonymous. Unless I’ve missed something, John himself has not weighed in on this, as have some other expected usual suspects. But Erik Pelton does, and, interestingly, comes out the other way:
While they are not identical proceedings, the differences are not huge, in my opinion. There really are no limitations in a TTAB proceeding other than no live testimony before the judges. And a TTAB litigant could remove the case to District Court if they believe infringement is an issue and the procedures or other aspects of the TTAB case harm the party’s potential to make their case. Furthermore, a TTAB case can be reviewed de novo on appeal, with new evidence, by a District Court. This point was reiterated by several of the judges on the Supreme Court multiple times.
A central issue that came up in the arguments repeatedly is whether, or how, the TTAB considers the circumstances of use. Despite some differences in the statutory language, most of the judges appeared ready to conclude that of course the TTAB considers the context of use on the goods or services. The Board often does consider those issues, in my experience. And a party that believe those issues are relevant can certainly introduce evidence about the issues. Furthermore, a party that believes that clarification of a description of goods at the USPTO would have a bearing on the proceeding may move, under Section 18 of the Trademark Act and/or a counterclaim, to restrict the registration or application at issue (although this was not raised by either of the parties or any of the judges). . . . While it was not raised in the hearing before the Court, the availability of Section 18 means that the manner of use or the details of how a mark is used with the goods can be made at issue before a Board proceeding by any party if it properly raises the issue.
After the hearing today, I believe it is likely that the Supreme Court will find preclusion, while allowing for standard exceptions.
Why? Because while the TTAB and infringement proceedings are not identical they are similar enough such that: (A) the TTAB always suspends its proceedings if there is a separate District Court action between the parties, and (B) I am not aware of any case in which the TTAB did not follow the same findings and outcome of District Court decision.
What do I think? I like this:
It remains to be seen how the Court will rule in this case, but there are compelling arguments to be made on both sides, and the decision could significantly affect the strategies and practices of future litigants before both the TTAB and the federal courts.
Actually, here I don’t agree with Erik, and I tend to agree with what seems to me to be the INTA position: These are really very different kinds of proceedings. Moreover, I would suggest that the very fact that, as Erik notes, District Courts usually do line up with the TTAB means that there’s no need to mandate preclusion: District Courts can and do use TTAB determinations as they see fit. But litigants in the District Court are entitled to fight like hell to convince a judge that, in a given case, the court should not do so.
Having said this, I think Erik raises a far more troubling question at the end of his post — one which, in my view, needs to be addressed before we even get to the fancy stuff above:
The Solicitor General’s office pronounced TTAB as “T-T-A-B.” Counsel for both parties used “T-Tab.”
Huh? Now, that’s troubling — especially if, as might well be the case, it’s part of some icky trend among our people (i.e. Trademark Nation).
Someone’s got to deal with this, however. John Welch, please call your office!
UPDATE: As mentioned above, the Supreme Court has ruled (March 24, 2014) — here, again, is the opinion, and here’s the official takeaway:
Held: So 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 a district court, issue preclusion should apply.
I’ll round up learned opinion after it’s out, then, standing as ever on the shoulders of giants, offer my own two cents. Here’s my take on the opinion — including a surprising discovery (or indication of unshakable obsession).