Supreme Court Raises the Stakes for Trademark Trial and Appeal Board Proceedings

April 3, 2015

On March 24, 2015, the U.S. Supreme Court issued a decision that quickly made waves in the trademark community. In B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. ___ (Mar. 24, 2015), the Court held for the first time that certain rulings made by the Trademark Trial and Appeal Board (TTAB), such as whether a likelihood of confusion exists, can have binding effects on subsequent trademark infringement litigation. Although the Court cautioned that not all issues decided by the TTAB will result in such binding effects, the B&B Hardware decision will undoubtedly increase the gravity—and, likely, the time and expense—of proceedings before the TTAB.

Background on TTAB Proceedings vs. Federal Trademark Litigation

Although registration proceedings before the TTAB (such as Oppositions) have similarities in form to litigation in federal courts, TTAB proceedings differ substantially in that they are typically narrower in scope, are conducted with little, if any, oral testimony, and are focused only on potential registration and usually not on actual usage or money damages. TTAB proceedings tend to center on the visual and audible impressions of the marks at issue and on a comparison of the descriptions of goods or services as set forth in the respective applications. Federal court proceedings, on the other hand, focus primarily on uses of the marks in the marketplace and the actual goods and services sold under the respective marks. Thus, federal trademark litigation often involves a more thorough fact-finding process, whereas TTAB proceedings focus narrowly on the applications and/or registrations at issue.

Prior to B&B Hardware, the losing party in an Opposition action would have to weigh the costs and benefits of appealing the TTAB decision. In the past, a party may have operated under the assumption that the only risk in foregoing an appeal was the lost registration and that, if an issue of confusion arose in the future, the party would be free to litigate the merits in a federal district court.

Effect of B&B Hardware

In view of the Supreme Court's ruling in B&B Hardware, TTAB proceedings now may have binding effect on federal trademark litigation. Therefore, proceedings before the TTAB may be handled differently than in the past. Should the TTAB determine that a likelihood of confusion exists, the losing party may now risk forfeiting its ability to use or enforce its chosen mark in the marketplace. Moreover, although the losing party technically loses only its ability to register its mark, B&B Hardware suggests that the losing party may now also face a more serious risk of money damages in a trademark infringement action than was previously the case, depending on how the mark is used in the marketplace compared to the description of goods and services in the trademark application.

Because of the many new questions raised by B&B Hardware, individuals or businesses faced with TTAB proceedings should consult with an experienced attorney to discuss how best to address and adjudicate such proceedings, particularly in light of the substantial effect that the results can have on any and all future uses of the mark.