Global Fastener News

April 1, 2015 FIN – The U.S. Supreme Court ruled on a longstanding trademark dispute between two fastener companies that will likely change the way corporate legal departments handle trademark litigation.

In B&B Hardware vs. Hargis Industries, the high court took up the issue of preclusion.

“This case relates to how the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB) turned down the trademark application by Hargis, given the ‘likelihood of confusion’ consumers would find when they saw the fasteners sold by both companies,” writes Ed Silverstein of InsideCounsel.

The court determined that “a decision by the Trademark Trial and Appeal Board (TTAB) on the issue of likelihood of confusion between two trademarks can preclude a federal district court from making its own determination on that issue, as long as the ordinary elements of issue preclusion are met,” according to the National Law Review.

The court, however, noted that in a “great many” TTAB registration decisions, the ordinary elements of issue preclusion will not be met.

According to court documents, B&B Hardware sells a fastener product used in the aerospace industry under the trademark SEALTIGHT for which it had obtained a federal trademark registration in 1993. Hargis Industries sells self-drilling and self-tapping screws used in the construction of metal buildings under the SEALTITE mark and applied to register the SEALTITE mark with the US Patent and Trademark Office (PTO), the National Law Review reports.

“The TTAB said the Hargis trademark was “substantially identical” to that of B&B,” Silverstein wrote. “An Arkansas federal court and the 8th Circuit Court of Appeals said the district court did not have to defer to the TTAB ruling.

But in a 7-to-2 decision, the Supreme Court rejected the arguments made by the Appeals Court, and now federal judges may need to defer to some rulings from the TTAB.

“We’re pleased by the decision,” B&B attorney Willy Jay told InsideCounsel. “It certainly is a victory for our side.”

The court’s decision may “clear the way” for more litigation involving other companies, Jay said.

Jay predicted the decision will be cited in future cases needing to demonstrate the importance of “tak(ing) administrative litigation seriously.”

But the high court’s decision was “nuanced,” making it unclear how the decision will play out in specific cases.

“Previously, the TTAB had to be taken seriously when it came to deciding if a trademark could be registered,” Silverstein wrote. “Now, there is a greater possibility the decision by the three administrative judges hearing a case at the TTAB could ‘ultimately determine’ if the trademark ‘can be used or not,’ he added.

Prior to the ruling, the TTAB was a less expensive venue than litigation. The TTAB proceedings were conducted by deposition instead of a a live trial.

Now litigants may put more resources into a dispute, legal experts say. ©2015 Fastener Industry News.