B&B Hardware v. Hargis Industries and the implications for Trademark Law Practice

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Best in class…and infringed by SEALTITE

Imagine this situation: you have a trademark and someone else is using and trying to trademark a similar name. You decide to sue them for trademark infringement in district court and oppose the registration at the USPTO. Your opposition is successful and is based on likelihood-of-confusion grounds (the same grounds that will win the day in court) – does the district court judge have to abide by the USPTO’s determination? The U.S. Supreme Court’s recent decision in B&B Hardware, Inc. v. Hargis Indus., Inc., No. 13-352, 575 U.S. __ (2015), says yes, but only under certain conditions. The Court’s decision leaves trademark practitioners struggling to grasp = level of impact it will have, if any, on the everyday practice of trademark law.

The second of two trademark cases heard by the Court in 2014, B&B Hardware addresses the question of whether the doctrine of issue preclusion applies to registration decisions of the USPTO’s Trademark Trial and Appeal Board (TTAB) in later civil litigation over trademark infringement.  Issue preclusion prevents parties from re-litigating issues that have already been decided by a court (or in this case, an agency)—meaning that if a second case arises between the same parties related to the same issue as the first case, the first court’s decision on the issue stands, and the second court is precluded from finding differently on that issue. Registration opposition and an infringement action are two separate trademark proceedings that can be filed by a trademark holder over similarities between the same two marks, and thus there is the potential for issue preclusion to apply. Here, B&B Hardware opposed Hargis Industries’ registration of the mark SEALTITE on the basis that it was too similar to its own registered mark, SEALTIGHT— and while the TTAB was deciding the registration issue, B&B brought suit against Hargis for trademark infringement in District Court. Ultimately, the TTAB sided with B&B, barring registration of SEALTITE on the grounds that it was likely to be confused with SEALTIGHT. B&B then argued that the TTAB’s likelihood-of-confusion analysis should preclude the district court from conducting its own analysis and determining an opposite result.

In the 7-2 decision written by Justice Alito (with Justices Thomas and Scalia dissenting), the majority reversed the Eighth Circuit and held that issue preclusion does apply to administrative agencies such as the TTAB where the issue decided by the agency is “materially the same” as the issue before the court. The Court determined that even though the likelihood-of-confusion analysis conducted by the TTAB in the context of registration varies somewhat from the likelihood-of-confusion analysis conducted by a court in an infringement suit, they are not materially different standards.

Although, as Ronald Mann of SCOTUSblog points out, the decision may well be cited for its clear recitation of the doctrine of issue preclusion, the extent to which it will affect the everyday practice of trademark law is less clear.  The Court itself acknowledged that for “a great many registration decisions issue preclusion obviously will not apply because the ordinary elements will not be met”  (such as when there are different parties or issues presented).  And in her concurrence, Justice Ginsberg clarified her understanding that the decision would not invoke issue preclusion for contested registrations where the likelihood-of-confusion analysis only compared two marks in the abstract, and not their marketplace usage.

It appears that most legal commentators agree that the decision is unlikely to affect most trademark registrations. Laura Chapman and Toni Qui of the National Law Review suggest that litigants can attempt to bypass preclusion from a negative TTAB decision by appealing to the district court for a de novo review (which the Court also alluded to). John Welch of TTABlog agrees that the de novo review is a critical loophole, and adds that B&B Hardware may just be the very rare case where the opposition to registration and infringement action were simultaneous, and the TTAB’s decision was not appealed.

Thus, while the stakes of not appealing a negative decision from TTAB on registration have been raised somewhat in that TTAB’s analysis could carry forward into any future infringement litigation, the likelihood that issue preclusion will affect most trademarks seems pretty remote. There may be some carryover for patent law, says Dennis Crouch of PatentlyO, since the same reasoning the Court applied to the TTAB could likely be applied to the Patent Trial and Appeal Board (PTAB)—unless, unlike trademark’s Lanham Act, the Court views patent statutes as barring the application of issue preclusion. All in all, SCOTUSblog may be right that the biggest impact the case may have on trademark practice could well be the Court’s descriptions of the processes and procedures of trademark registration and infringement litigation as they get applied and interpreted in future litigation.

Duty of Disclosure: Apple and the USPTO

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Apple has been active in the last few years attempting to protect a design, under the patent and trademark laws, that includes a pair of eighth notes. Notably, Apple has received some feedback from USPTO regarding both–it being granted a design patent to the musical notes (left image below), but being rebuffed by the Trademark Trial and Appeal Board (TTAB) as it attempted to register a similar trademark (right image below).


There is little doubt that you can obtain both a design patent and a trademark to the same ornamental design.  As the Federal Circuit has opined:

The underlying purpose and the essence of patent rights are separate and distinct from those appertaining to trademarks. No right accruing from the one is dependent upon or conditioned by any right concomitant to the other. The longevity of the exclusivity of one is limited by law while the other may be extended in perpetuity. . . .trademark rights, or rights under the law of unfair competition, which happen to continue beyond the expiration of a design patent, do not ‘extend’ the patent monopoly. They exist independently of it, under different law and for different reasons.

In fact, there are reasons to apply for both a design patent and a trademark as it may provide protection for an important design that is (or will become) an important brand for your company or assist in the prevention of copying.

However, whether or not Apple should be entitled to both the design patent and the trademark is not the topic of this post – what is worth discussing is that the TTAB found that Apple’s potential trademark was confusingly similar to the iLike trademark (right), yet neither the iLike trademark (registered in 2008 well prior to Apple’s patent issuance) nor the analysis of the examining attorney at the USPTO was submitted to the examiner reviewing Apple’s design patent application.

Under the patent laws, all printed publications may be used as references, the date to be cited being the publication date. (Manual of Patent Examining Procedure (MPEP 901.06)).  Additionally, applicants (and their attorney) owe a duty of candor to the USPTO and a duty to disclose information that would be material to the patentability of the invention.  37 CFR §1.56. The term “information” as used in 37 CFR 1.56 includes any information which is “material to patentability.” “Information is material to patentability when it is not cumulative to information already of record or being made of record in the application, and (1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or (2) It refutes, or is inconsistent with, a position the applicant takes in: (i) Opposing an argument of unpatentability relied on by the Office, or (ii) Asserting an argument of patentability.” 37 CFR §1.56(b).

Based on the broad scope of “information” should Apple have provided the USPTO patent examiner with the iLike trademark and the prosecution history of Apple’s trademark application?  Given the TTAB’s findings and the broad definition of “information”, it seems as though there is a strong argument they should have.  The argument for submission is buttressed when one considers the similarities between the tests for trademark registration and design patent infringement/allowance.

Both trademarks and design patents have similar tests for infringement and allowances—a mark infringes a registered trademark if the mark is confusingly similar to the trademark, such that a consumer would be deceived as to origin of similar products, and similarly a design patent is infringed if in the eye of an ordinary observer, situated as a typical purchaser of the item, the two designs are substantially the same such that observer would be deceived into consummating the purchase, the patent is infringed.  In determining whether or not a trademark should be registered in view of other existing marks or whether a design patent should be allowed over existing prior art, the USPTO uses similar guidelines as are used to determine infringement (based on old rule that what is infringed is necessarily anticipating prior art).

Given the apparent similarity between Apple’s design patent and trademark designs and the similarities between how the designs would be evaluated in view of prior art designs and registrations, it seems clear that Apple should have submitted the iLike trademark as prior art and also submitted the analysis and prosecuting history of the examining attorney at the USPTO who was evaluating the trademark application.  Apple may have believed that the iLike trademark was cumulative of the volume of prior art patents and patent applications it submitted to the USPTO, but certainly the examining attorney’s remarks (and Apple’s responses) would not have been.  Ultimately, Apple’s omission may leave its design patent vulnerable to an invalidity challenge.