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Trademark owners cautioned about issue preclusion

California businesses that own trademarks may be interested in a recent ruling by the U.S. Court of Appeals for the 8th Circuit that reversed its earlier decision after the case was remanded back to it by the U.S. Supreme Court. It deals with a long fight over trademarks between B&B Hardware and Hargis Industries. B&B, which owns the registered trademark SEALTIGHT, had filed opposition proceedings with the Trademark Trial and Appeal Board over the proposed registration by Hargis of the mark SEALTITE. At the same time, it filed a trademark infringement lawsuit against Hargis in federal district court.

The TTAB denied the registration of the proposed Hargis mark, saying in its finding that there was a likelihood of confusion between the two. Hargis did not appeal the TTAB finding, but it continued on with the federal court litigation. Three years later, it won a favorable decision from a jury that said the two marks weren’t similar enough to be confused. B&B appealed, claiming that the earlier TTAB decision constituted issue preclusion. The 8th Circuit denied its appeal on the basis that the TTAB decision did not place sufficient weight on how the marks in question would be used in the marketplace.

The matter eventually went all the way to the Supreme Court. The high court ruled in favor of B&B, stating that the likelihood of confusion standard should be the same for both the TTAB and federal courts, regardless of how the board had reached its conclusion. The Supreme Court noted that the appropriate remedy for Hargis would have been for it to appeal the TTAB decision. It then remanded the case back to the 8th Circuit, which reversed its earlier decision and found for B&B.

The outcome of trademark infringement actions, as was the case here, can often depend upon the forum that is chosen. Those who are involved in such a situation may want to obtain the advice and counsel of an attorney who has experience in intellectual property disputes.