Decided March 24, 2015
Brief Summary: “[I]ssue preclusion is not limited to those situations in which the same issue is before two courts” but may also apply “where a single issue is before a court and an administrative agency”.
Summary: The TTAB concluded Hargis should not be able to register SEALTITE for “self-piercing and self-drilling metal screws for use in the manufacture of metal and post-frame buildings” as it is too similar to B&B’s own SEALTIGHT trademark for “threaded or unthreaded metal fasteners and other related hardwar[e]; namely, self-sealing nuts, bolts, screws, rivets and washers, all having a captive o-ring, for use in the aerospace industry.” Hargis did not seek judicial review of that decision and in a co-pending infringement suit B&B argued Hargis should not be able to contest the likelihood of confusion due to the TTAB decision, which was rendered during the litigation. The DC disagreed and the Eigth Circuit affirmed, reasoning that the court used different factors to evaluate likelihood of confusion, the TTAB placed too much emphasis on the appearance and sound of the two marks, and Hargis bore the burden of persuasion before the TTAB while B&B held it before the DC. The SC disagreed with the DC and the appeals court. The opinion explained “[h]ere, the Eight Circuit rejected issue preclusion that would make it difficult for the doctrine ever to apply in trademark disputes” (“So long as the ordinary elements of issue preclusion are met, when the usages adjudicatd by the TTAB are materially the same as those before a district court, issue preclusion should apply…An agency decision can ground issue preclusion…no categorical reason why registration decisions can never meet the ordinary elements of issue preclusion…We disagree with that narrow understanding of issue preclusion.”) The Court found nothing in the “Lanham Act’s text [that] forbid[s] issue preclusion.” It concluded, “consistent with principles of law that apply in innumerable contexts, we hold that a court shold give preclusive effect to TTAB decision if the ordinary elements of issue preclusion are met” (“When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” (Restatement (Second) of Judgments, 1980)). Thus, “issue preclusion is not limited to those situations in which the same issue is before two courts” (“issue preclusion applies where ‘the two issues are indeed identical and the other rules of collateral estoppel are carefully observed”) but may also apply “where a single issue is before a court and an administrative agency” (the “likelihood of confusion for purposes of registration is the same standard as likelihood of confusion for purposes of infringement”). Justice Ginsberg agreed in a concurring opinion, citing McCarthy’s Trademarks and Unfair Competition (“issue preclusion obviously will not apply” where “contested registrations are…decided upon ‘a comparison of the marks in the abstract and apart from their marketplace usage.’”) Justices Thomas and Scalia dissented, arguing that the decision is based on the 1991 “poorly decided dictum” (Astoria, US 1991) that Congress intended “agency decisions to have preclusive effect in Article III courts.”