Currently, the federal circuits are split over the level of
deference that should be afforded to findings made by the
USPTO's Trademark Trial & Appeal Board (TTAB) on likelihood
of confusion, with the circuit courts applying at least five
different standards. But that may be about to change because the US
Supreme Court recently granted certiorari in a
case that directly addresses the issue.
In the case, trademark owner B&B Hardware, Inc. claims that a
federal district court and the Eighth Circuit failed to properly
defer to a TTAB holding that its registered mark SEALTIGHT is
likely to be confused with another mark, SEALTITE. While the TTAB
found in favor of B&B, the federal district court ruled against
B&B after the court found that the TTAB's decision should
be given no preclusive effect or deference.
In its petition for certiorari, B&B argued that the Eighth
Circuit's rejection of the TTAB's likelihood of confusion
decision reinforces a circuit split. In the Eighth Circuit, TTAB
findings on likelihood of confusion are afforded no weight in
subsequent federal district court proceedings. But in the Third and
Seventh Circuits, TTAB findings are given preclusive effect, and
the likelihood of confusion finding cannot be re-litigated later
before a district court. Other circuits apply preclusion to varying
degrees: the Fourth Circuit, for example, considers the TTAB
findings to be "powerful evidence;" the Eleventh Circuit
has held that TTAB findings are entitled to "great
weight;" and in the Fifth Circuit, TTAB findings are
"controlling unless the contrary is established."
B&B argues that the TTAB's earlier findings on likelihood
of confusion should be given preclusive effect, meaning that the
TTAB decision is binding on the district court because the
"likelihood of confusion" tests applied by the TTAB and
in each circuit are substantively the same. Indeed, if a federal
district court finds that there is a likelihood of confusion, the
TTAB will be bound by that decision and will not re-consider the
issue. Similarly, B&B argues that as TTAB is the expert forum,
earlier TTAB findings should control over later federal court
proceedings. Accepting TTAB findings as controlling also promotes
judicial economy because parties would not have to re-try the same
issue – likelihood of confusion – before the TTAB and
again in federal court.
Like B&B, the federal government has advocated for more
deference to TTAB rulings than the Eighth Circuit permitted. In a
brief filed by US Solicitor General Donald B. Verrilli Jr., the
government advocated for a uniform rule across the circuits that
requires federal courts to give greater weight to TTAB
holdings.
In its opposition brief, Hargis argued that the circuit split is
illusory and that federal court deference to TTAB findings is
inappropriate. It contends that the forums are different tribunals
– one an administrative agency, and the other an Article III
court – analyzing different issues under different legal
standards. The TTAB decides likelihood of confusion using a
13-factor test focused on similarity between marks in the context
of determining whether a particular trademark should be registered.
Federal courts, on the other hand, apply a different, multi-factor
test focused on actual use of the marks in the marketplace to
determine whether there is likelihood of confusion in the context
of a Lanham Act claim or similar common law or state claim.
In ruling on the case, the Supreme Court may create new authority
on the issue and change the current dynamic of trademark litigation
between the TTAB and federal courts. If the Supreme Court rules
completely in favor of B&B, this would prevent parties from
re-litigating likelihood of confusion before the federal courts
once the TTAB has decided the issue. This could effectively force
litigants to choose between litigating in federal court or before
the TTAB and also could dramatically narrow the issues presented in
the thousands of trademark cases filed in federal district court
each year. In addition, it may also increase the amount of
discovery and evidence in TTAB proceedings in an attempt to ensure
the desired result. The Supreme Court decision in this case may not
impact infringement of common law trademark rights.
A range of other outcomes are possible. The Supreme Court could
adopt the position of Hargis and the Eighth Circuit where there is
no weight given TTAB findings. Alternatively, the Supreme Court
could adopt some type of middle ground of deference, as done by the
Fourth Circuit, the Eleventh Circuit or the Fifth Circuit. Or the
Supreme Court could adopt a brand new standard for TTAB deference.
Regardless of the outcome, the implications of the decision will be
far-reaching for trademark owners and alleged infringers as it will
affect and hopefully provide uniformity to the currently muddled
interplay between likelihood of confusion decisions in proceedings
before the TTAB versus federal courts.
Our previous alert on the case is available here. Arent Fox is continuing to monitor this
case and other trademark cases of interest.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.