A team of attorneys from Goodwin Procter’s Appellate and IP Litigation Practices recently achieved a major victory for client B&B Hardware before the U.S. Supreme Court.
Trademark disputes often focus on whether two marks create a “likelihood of confusion” with one another. That issue can come up before a court considering trademark infringement; before the Trademark Trial and Appeal Board (TTAB), an administrative body that considers trademark registration; or sometimes both. In B&B Hardware, Inc. v. Hargis Industries Inc., the Supreme Court held that when “materially identical” likelihood of confusion issues are presented to both tribunals (court and TTAB), the first final decision is binding on the parties, under the doctrine of “issue preclusion.” The Court rejected arguments that the TTAB cannot render a decision that is binding on courts, or that confusion before the TTAB is always a different issue. The Supreme Court’s decision also endorsed the general principle that agency tribunals can render preclusive judgments. The case was argued before the court in December 2014.
In a 7-2 decision penned by Justice Alito, the Court explained that “[a]llowing the same issue to be decided more than once wastes litigants’ resources and adjudicators’ time, and it encourages parties who lose before one tribunal to shop around for another.” The Court applied that ordinary rule of preclusion to TTAB decisions about confusion: preclusion is no less applicable just because a decision comes from the TTAB, and confusion before the TTAB is not legally different from confusion before a district court. Preclusion thus will depend on whether the issues are factually the same in both cases.
The Supreme Court’s ruling in B&B Hardware, Inc. v. Hargis Industries, Inc. can potentially affect any type of agency adjudication: the Court relied on a presumption that agency decisions are eligible for issue preclusion “except when a statutory purpose to the contrary is evident.” Many independent federal regulatory agencies perform adjudication as part of their duties.
This is the second Supreme Court victory for Goodwin’s Appellate and Intellectual Property practices in 2015. In January, Goodwin prevailed for Teva Pharmaceuticals in Teva v. Sandoz.