Supreme Court Likely to Mend Circuit Split Over Court Deference to TTAB Findings

Currently, the federal circuits are split over the level of deference that should be afforded to findings made by the USPTO’s Trademark Trial & Appeal Board (TTAB) on likelihood of confusion, with the circuit courts applying at least five different standards. But that may be about to change because the US Supreme Court recently granted certiorari in a case that directly addresses the issue.

In the case, trademark owner B&B Hardware, Inc. claims that a federal district court and the Eighth Circuit failed to properly defer to a TTAB holding that its registered mark SEALTIGHT is likely to be confused with another mark, SEALTITE. While the TTAB found in favor of B&B, the federal district court ruled against B&B after the court found that the TTAB’s decision should be given no preclusive effect or deference.
 
In its petition for certiorari, B&B argued that the Eighth Circuit’s rejection of the TTAB’s likelihood of confusion decision reinforces a circuit split. In the Eighth Circuit, TTAB findings on likelihood of confusion are afforded no weight in subsequent federal district court proceedings. But in the Third and Seventh Circuits, TTAB findings are given preclusive effect, and the likelihood of confusion finding cannot be re-litigated later before a district court. Other circuits apply preclusion to varying degrees: the Fourth Circuit, for example, considers the TTAB findings to be “powerful evidence;” the Eleventh Circuit has held that TTAB findings are entitled to “great weight;” and in the Fifth Circuit, TTAB findings are “controlling unless the contrary is established.”
 
B&B argues that the TTAB’s earlier findings on likelihood of confusion should be given preclusive effect, meaning that the TTAB decision is binding on the district court because the “likelihood of confusion” tests applied by the TTAB and in each circuit are substantively the same. Indeed, if a  federal district court finds that there is a likelihood of confusion, the TTAB will be bound by that decision and will not re-consider the issue. Similarly, B&B argues that as TTAB is the expert forum, earlier TTAB findings should control over later federal court proceedings. Accepting TTAB findings as controlling also promotes judicial economy because parties would not have to re-try the same issue – likelihood of confusion – before the TTAB and again in federal court.
 
Like B&B, the federal government has advocated for more deference to TTAB rulings than the Eighth Circuit permitted. In a brief filed by US Solicitor General Donald B. Verrilli Jr., the government advocated for a uniform rule across the circuits that requires federal courts to give greater weight to TTAB holdings. 

In its opposition brief, Hargis argued that the circuit split is illusory and that federal court deference to TTAB findings is inappropriate. It contends that the forums are different tribunals – one an administrative agency, and the other an Article III court – analyzing different issues under different legal standards. The TTAB decides likelihood of confusion using a 13-factor test focused on similarity between marks in the context of determining whether a particular trademark should be registered. Federal courts, on the other hand, apply a different, multi-factor test focused on actual use of the marks in the marketplace to determine whether there is likelihood of confusion in the context of a Lanham Act claim or similar common law or state claim. 
 
In ruling on the case, the Supreme Court may create new authority on the issue and change the current dynamic of trademark litigation between the TTAB and federal courts. If the Supreme Court rules completely in favor of B&B, this would prevent parties from re-litigating likelihood of confusion before the federal courts once the TTAB has decided the issue. This could effectively force litigants to choose between litigating in federal court or before the TTAB and also could dramatically narrow the issues presented in the thousands of trademark cases filed in federal district court each year. In addition, it may also increase the amount of discovery and evidence in TTAB proceedings in an attempt to ensure the desired result. The Supreme Court decision in this case may not impact infringement of common law trademark rights.
 
A range of other outcomes are possible. The Supreme Court could adopt the position of Hargis and the Eighth Circuit where there is no weight given TTAB findings. Alternatively, the Supreme Court could adopt some type of middle ground of deference, as done by the Fourth Circuit, the Eleventh Circuit or the Fifth Circuit. Or the Supreme Court could adopt a brand new standard for TTAB deference. Regardless of the outcome, the implications of the decision will be far-reaching for trademark owners and alleged infringers as it will affect and hopefully provide uniformity to the currently muddled interplay between likelihood of confusion decisions in proceedings before the TTAB versus federal courts.
 
Our previous alert on the case is available here. Arent Fox is continuing to monitor this case and other trademark cases of interest. For more information, please contact Anthony V. Lupo, Randall A. Brater, Elizabeth H. Cohen, or Leah C. Montesano.