24 March 2015

Law in Plain English: B&B Hardware, Inc. v. Hargis Industries, Inc.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblogB&B Hardware, Inc. v. Hargis Industries, Inc.

Argument: Dec 2 2014 (Aud.)

Background: In 2007, the Trademark Trial and Appeal Board (TTAB) denied Hargis' application for registration of its "Sealtite" mark for a line of self-drilling and self-taping screws that are commonly used in the construction of metal buildings. The TTAB determined that there was a likelihood of confusion with B&B Hardware's "Sealtight" mark for fasteners that is used predominantly in the aerospace industry. B&B later brought trademark infringement and unfair competition claims against Hargis, and argued that the TTAB's decision should be given preclusive effect on the question of likelihood of confusion. Alternatively, B&B attempted to admit the TTAB decision into evidence. Hargis filed counterclaims for false advertising and false designation of origin. The jury rejected B&B's trademark infringement and unfair competition claims. Hargis prevailed on its counterclaims. The district court also awarded Hargis attorney fees, holding that B&B's conduct of willfully and deliberately manufacturing evidence to support its trademark infringement claim made the case an exceptional one appropriate under the Lanham Act. The Eighth Circuit affirmed, finding that the TTAB, in denying registration, did not decide the same likelihood-of-confusion issues presented to the district court. Additionally, the panel ruled that admitting the TTAB' s decision into evidence would be confusing and misleading to the jury because the TTAB applied its factors and analyzed the evidence in a manner significantly different than the jury would be required to do in an infringement action.

Issue: The questions before the Court are (1) whether the Trademark Trial and Appeal Board’s finding of a likelihood of confusion precludes respondent from relitigating that issue in infringement litigation, in which likelihood of confusion is an element; and (2) whether, if issue preclusion does not apply, the district court was obliged to defer to the Board’s finding of a likelihood of confusion absent strong evidence to rebut it.

Holding: In a 7-2 decision, the Supreme Court ruled that so long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially thesame as those before a district court, issue preclusion should apply.
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