Trademark Cases Pending Before the U.S. Supreme Court

In December, the Supreme Court of the United States will hear oral arguments on two trademark cases: B&B Hardware, Inc. v. Hargis Industries, Inc. and Hana Financial v. Hana Bank.[1] These cases address the issues of whether a preclusive effect should be given to U.S. Trademark Trial and Appeal Board (TTAB) decisions on likelihood of confusion and whether trademark tacking is an issue of fact or an issue of law, respectively.

B&B Hardware, Inc. v. Hargis Industries, Inc.[2]

In this case, Petitioner B&B Hardware (B&B) and Respondent Hargis both manufacture sealing fasteners.[3] B&B owns the trademark registration for the mark “SEALTIGHT.”[4] Hargis used and sought to register the mark “SEALTITE.”[5] B&B filed an opposition to Hargis’s application with the TTAB and also filed an initial infringement action in the district court (separate from the infringement action currently pending before the Supreme Court).[6] The initial infringement action resulted in judgment for Hargis, but the district court did not decide the issue of likelihood of confusion.[7] Instead, it based its decision on a finding that B&B’s mark was merely descriptive.[8]

During discovery in the opposition proceeding, which was suspended during the initial infringement action, Hargis admitted that there had been incidents of actual customer confusion between its SEALTIGHT fasteners and B&B’s SEALTITE fasteners. B&B then commenced the current infringement action. The TTAB action proceeded and the TTAB sustained B&B’s opposition and denied Hargis’s registration of the SEALTITE mark, concluding that the marks were “substantially identical” and “used on closely related products,” thus, likely to cause confusion.

In the infringement action, both the district court and the Eighth Circuit refused to accord a preclusive effect to the TTAB’s decision on likelihood of confusion.[9] At the district court, B&B tried unsuccessfully to obtain summary judgment of likelihood of confusion and to have the TTAB decision introduced into evidence.[10] The jury subsequently found no infringement.[11] On appeal, the Eighth Circuit panel majority affirmed, refusing to apply issue preclusion because “the same likelihood-of-confusion issues were not decided by the TTAB as those brought in the action before the district court.”[12]

B&B filed a Petition for a Writ of Certiorari on September 18, 2013, which the Supreme Court granted on July 1, 2014.[13]        

The questions presented are as follows:

1. Whether the Board’s finding of a likelihood of confusion precludes Hargis from relitigating that issue in infringement litigation, in which likelihood of confusion is an element.
2. Whether, if issue preclusion does not apply, the district court was obliged to defer to the Board’s finding of a likelihood of confusion absent strong evidence to rebut it.[14]

The American Intellectual Property Law Association (AIPLA), the Intellectual Property Law Association of Chicago (IPLAC), and the International Trademark Association (INTA) each filed a brief of amicus curiae in support of neither party.[15] The United States filed a brief of amicus curiae in support of B&B.[16] AIPLA requested that the Court “clarify that a TTAB decision on likelihood of confusion can, in appropriate and narrow circumstances, have a preclusive effect.”[17] IPLAC requested that the Court be aware that “some [but not all] TTAB cases consider real world usage of trademarks, and TTAB cases are conducted routinely as typical federal litigation cases” but to consider the Seventh Amendment issue that arises because the TTAB does not have juries.[18] INTA requested that the Court rule that:

(1) TTAB determinations on the likelihood of confusion do not have preclusive effect in subsequent civil court proceedings; and (2) district courts should determine, on a case-by-case basis, whether, and to what extent, TTAB’s determinations should be afforded deference, but such deference should be limited to fact issues that were identical and fully litigated and should not prevent a party from offering other evidence and arguments that may nevertheless compel a different result.[19]

Hana Financial, Inc. v. Hana Bank[20]

This case addresses the issue of whether the existence of trademark tacking should be decided by a jury or a judge. Trademark rights are based on use; a party to first use a mark is said to have “priority” and may sue later users for trademark infringement.[21] The doctrine of trademark tacking allows a party to claim an earlier priority date in narrow circumstances where the marks are “legal equivalents.”[22]

In this case, Petitioner Hana Financial owns a federally registered trademark for “HANA FINANCIAL.”[23] Hana Financial sued Respondent Hana Bank for its use of the mark “HANA BANK.”[24] Although Hana Bank started using its mark after Hana Financial first used its mark, Hana Bank claimed that it actually had priority based on the doctrine of trademark tacking.[25] The district court submitted the question of whether trademark tacking applied to the jury, which returned a verdict in favor of Hana Bank.[26] The Ninth Circuit affirmed.[27]

Hana Financial filed a Petition for a Writ of Certiorari on April 7, 2014, which the Supreme Court granted on June 23, 2014.[28] Hana Financial noted that the circuit courts are split on whether trademark tacking is a question of fact to be decided by a jury or a question of law to be decided by a judge and set forth the question presented as “Whether the jury or the court determines whether use of an older mark may be tacked to a newer one?”[29]

AIPLA also filed a brief of amicus curiae in support of neither party in this case, requesting that the Court decide that trademark tacking be treated as a question of fact for a jury.[30]

Conclusion

These cases address important questions, not only for trademark litigators, but also for practitioners advising clients about their trademark rights in general. Snippets will report on the Supreme Court’s rulings once they are issued.

[1] SCOTUSblog, October Term 2014, http://www.scotusblog.com/case-files/terms/ot2014/ (last visited Oct. 24, 2014).

[2] Oral argument scheduled for December 2, 2014.

[3] See B&B Hardware, Inc. v. Hargis Indus., Inc., 569 F.3d 383, 385 (8th Cir. 2009), cert. granted, 82 U.S.L.W. 3195 (U.S. Jul. 1, 2014) (No. 13-352).

[4] See id.

[5] See id.

[6] Petition for Writ of Certiorai at 5, B&B Hardware (No. 13-352).

[7] Id.

[8] Id.

[9] See B&B Hardware, Inc. v. Hargis Indus., Inc., 716 F.3d 1020, 1026 (8th Cir. 2013); B&B Hardware, Inc. v. Hargis Indus., Inc., 736 F. Supp. 2d 1212, 1217 (E.D. Ark. 2010).

[10] B&B Hardware, 736 F. Supp. 2d at 1217.

[11] Id. at 1214.

[12] B&B Hardware, 716 F.3d at 1024.

[13] SCOTUSblog, B&B Hardware, Inc. v. Hargis Industries, Inc., http://www.scotusblog.com/case-files/cases/bb-hardware-inc-v-hargis-industries-inc/ (last visited Oct. 24, 2014).

[14] Petition for Writ of Certiorai at i, B&B Hardware (No. 13-352).

[15] See SCOTUSblog, B&B Hardware, Inc. v. Hargis Industries, Inc., http://www.scotusblog.com/case-files/cases/bb-hardware-inc-v-hargis-industries-inc/ (last visited Oct. 24, 2014).

[16] Id.

[17] Brief of Amicus Curiae American Intellectual Property Law Association in Support of Neither Party, at 17, B&B Hardware (No. 13-352).

[18] Brief of the Intellectual Property Law Association of Chicago as Amicus Curiae in Support of Neither Petitioner nor Respondents, at 11. 13, B&B Hardware (No. 13-352).

[19] Brief of Amicus Curiae the International Trademark Association in Support of Neither Party, at 33, B&B Hardware (No. 13-352).

[20] Oral argument scheduled for December 3, 2014.

[21] See Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158, 1163-64 (9th Cir. 2013).

[22] Van Dyne-Crotty, Inc. v. Wear-Guard Corp., 926 F.2d 1156, 1159 (Fed. Cir. 1991).

[23] Hana Fin., 735 F.3d at 1161.

[24] Id. at 1162.

[25] See id. at 1162-63.

[26] Hana Fin., Inc. v. Hana Bank, No. CV 07-1534, 2011 WL 2581458, at *1 (C.D. Cal. June 29, 2011).

[27] Hana Fin., 735 F.3d at 1168.

[28] See SCOTUSblog, Hana Financial, Inc. v. Hana Bank, http://www.scotusblog.com/case-files/cases/hana-financial-inc-v-hana-bank/ (last visited Oct. 24, 2014).

[29] Petition for Writ of Certiorai at i, Hana Fin. (No. 13-1211).

[30] Brief of Amicus Curiae the American Intellectual Property Law Association in Support of Neither Party, at 13, Hana Fin. (No. 13-1211).

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