[135 S.Ct. 1296] Argued December 2, 2014.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
Reversed and remanded.
[135 S.Ct. 1297] [191 L.Ed.2d 229] Respondent Hargis Industries, Inc. (Hargis), tried to register its trademark for SEALTITE with the United States Patent and Trademark Office pursuant to the Lanham Act. Petitioner, B& B Hardware, Inc. (B& B), however, opposed registration, claiming that SEALTITE is too similar to B& B's own SEALTIGHT trademark. The Trademark Trial and Appeal Board (TTAB) concluded that SEALTITE should not be registered because of the likelihood of confusion. Hargis did not seek judicial review of that decision.
Later, in an infringement suit before the District Court, B& B argued that Hargis was precluded from contesting the likelihood of confusion because of the TTAB's decision. The District Court disagreed. The Eighth Circuit affirmed, holding that preclusion was unwarranted because the TTAB and the court used different [191 L.Ed.2d 230] factors to evaluate likelihood of confusion, the TTAB placed too much emphasis on the appearance and sound of the two marks, and Hargis bore the burden of persuasion before the TTAB while B& B bore it before the District Court.
Held : So long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply. Pp. 8-22.
(a) An agency decision can ground issue preclusion. The Court's cases establish that when Congress authorizes agencies to resolve disputes, " courts may take it as given that Congress has legislated with the expectation that [issue preclusion] will apply except when a statutory purpose to the contrary is evident." Astoria Fed. Sav. & Loan Assn. v. Solimino, 501 U.S. 104, 108, 111 S.Ct. 2166, 115 L.Ed.2d 96. Constitutional avoidance does not compel a different conclusion. Pp. 8-12.
(b) Neither the Lanham Act's text nor its structure rebuts the " presumption" in favor of giving preclusive effect to TTAB decisions where the ordinary elements of issue preclusion are met. Astoria, 501 U.S. at 108, 111 S.Ct. 2166, 115 L.Ed.2d 96. This case is unlike Astoria. There, where exhausting the administrative process was a prerequisite to suit in court, giving preclusive effect to the agency's determination in that very administrative process could have rendered the judicial suit " strictly pro forma." Id., at 111, 111 S.Ct. 2166, 115 L.Ed.2d 96. By contrast, registration involves a separate proceeding to decide separate rights. Pp. 12-14.
(c) There is no categorical reason why registration decisions can never meet the ordinary elements of issue preclusion. That many registrations will not satisfy those ordinary elements does not mean that none will. Pp. 15-22.
(1) Contrary to the Eighth Circuit's conclusion, the same likelihood-of-confusion standard applies to both registration and infringement. The factors that the TTAB and the Eighth Circuit use to assess likelihood of confusion are not fundamentally different, and, more important, the operative language of each statute is essentially the same.
Hargis claims that the standards are different, noting that the registration provision asks whether the marks " resemble" each other, 15 U.S.C. § 1052(d), while the infringement provision is directed towards the " use in commerce" of the marks, § 1114(1). That the TTAB and a district court do not always consider the same [135 S.Ct. 1298] usages, however, does not mean that the TTAB applies a different standard to the usages it does consider. If a mark owner uses its mark in materially the same ways as the usages included in its registration application, then the TTAB is deciding the same likelihood-of-confusion issue as a district court in infringement litigation. For a similar reason, the Eighth Circuit erred in holding that issue preclusion could not apply because the TTAB relied too heavily on " appearance and sound." Pp. 15-19.
(2) The fact that the TTAB and [191 L.Ed.2d 231] district courts use different procedures suggests only that sometimes issue preclusion might be inappropriate, not that it always is. Here, there is no categorical " reason to doubt the quality, extensiveness, or fairness," Montana v. United States, 440 U.S. 147, 164, n. 11, 99 S.Ct. 970, 59 L.Ed.2d 210, of the agency's procedures. In large part they are exactly the same as in federal court. Also contrary to the Eighth Circuit's conclusion, B& B, the party opposing registration, not Hargis, bore the burden of persuasion before the TTAB, just as it did in the infringement suit. Pp. 19-21.
(3) Hargis is also wrong that the stakes for registration are always too low for issue preclusion in later infringement litigation. When registration is opposed, there is good reason to think that both sides will take the matter seriously. Congress' creation of an elaborate registration scheme, with many important rights attached and backed up by plenary review, confirms that registration decisions can be weighty enough to ground issue preclusion. Pp. 21-22.
716 F.3d 1020, reversed and remanded.
William M. Jay argued the cause for petitioner.
John F. Bash argued the cause for petitioner as amicus curiae, by special leave of court.
Neal K. Katyal argued the cause for respondents.
ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. GINSBURG, J., filed a concurring opinion. THOMAS, J., filed a dissenting opinion, in which SCALIA, J., joined.
Sometimes two different tribunals are asked to decide the same issue. When that happens, the decision of the first tribunal usually must be followed by the second, at least if the issue is really the same. Allowing the same issue to be decided more than once wastes litigants' resources and adjudicators' time, and it [135 S.Ct. 1299] encourages parties who lose before one tribunal to shop around for another. The doctrine of collateral estoppel or issue preclusion is designed to prevent this from occurring.
This case concerns the application of issue preclusion in the context of trademark law. Petitioner, B& B Hardware, Inc. (B& B), and respondent Hargis Industries, Inc. (Hargis), both use similar trademarks; B& B owns SEALTIGHT while Hargis owns SEALTITE. Under the Lanham Act, 60 Stat. 427, as amended, 15 U.S.C. § 1051 et seq. , an applicant can seek to register a trademark through an administrative process within the United States Patent and Trademark Office (PTO). But if another party believes that the PTO should not register a mark because it is too similar to its own, that party can oppose registration before the Trademark Trial and Appeal Board (TTAB). Here, Hargis tried to register the mark SEALTITE, but B& B opposed SEALTITE's registration. After a lengthy proceeding, the TTAB agreed with B& B that SEALTITE should not be registered.
In addition to permitting a party to object to the registration of a mark, the Lanham Act allows a mark owner to sue for trademark infringement. Both a registration proceeding and a suit for trademark infringement, more-over, can occur at the same time. In this case, while the TTAB was deciding whether SEALTITE should be registered, B& B and Hargis [191 L.Ed.2d 232] were also litigating the SEALTIGHT versus SEALTITE dispute in federal court. In both registration proceedings and infringement litigation, the tribunal asks whether a likelihood of confusion exists between the mark sought to be protected (here, SEALTIGHT) and the other mark (SEALTITE).
The question before this Court is whether the District Court in this case should have applied issue preclusion to the TTAB's decision that SEALTITE is confusingly similar to SEALTIGHT. Here, the Eighth Circuit rejected issue preclusion for reasons that would make it difficult for the doctrine ever to apply in trademark disputes. We disagree with that narrow understanding of issue preclusion. Instead, consistent with principles of law that apply in innumerable contexts, we hold that a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met. We therefore reverse the judgment of the Eighth Circuit and remand for further proceedings.
Trademark law has a long history, going back at least to Roman times. See Restatement (Third) of Unfair Competition § 9, Comment b (1993). The principle underlying trademark protection is that distinctive marks--words, names, symbols, and the like--can help distinguish a particular artisan's goods from those of others. Ibid. One who first uses a distinct mark in commerce thus acquires rights to that mark. See 2 J. McCarthy, Trademarks and Unfair Competition § 16:1 (4th ed. 2014) (hereinafter McCarthy). Those rights include preventing others from using the mark. See 1 A. LaLonde, Gilson on Trademarks § 3.02 (2014) (hereinafter Gilson).
Though federal law does not create trademarks, see, e.g., Trade-Mark Cases, 100 U.S. 82, 92, 25 L.Ed. 550, 1879 Dec. Comm'r Pat. 619 (1879), Congress has long played a role in protecting them. In 1946, Congress enacted the Lanham Act, the current federal trademark scheme. As relevant here, the Lanham Act creates at least two adjudicative mechanisms to help protect marks. First, [135 S.Ct. 1300] a trademark owner can register its mark with the PTO. Second, a mark owner can bring a suit for infringement in federal court.
Registration is significant. The Lanham Act confers " important legal rights and benefits" on trademark owners who register their marks. 3 McCarthy § 19:3, at 19-21 see also id., § 19:9, at 19-34 (listing seven of the " procedural and substantive legal advantages" of registration). Registration, for instance, serves as " constructive notice of the registrant's claim of ownership" of the mark. 15 U.S.C. § 1072. It also is " prima facie evidence of the validity of the registered mark and of the registration of the mark, of the owner's ownership of the mark, and of the owner's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate." § 1057(b). And once a mark has been registered for five years, it can become " incontestable." § § 1065, 1115(b)
To obtain the benefits of registration, a mark owner files an application with the PTO. § 1051. The application must include, among other things, " the date of the applicant's first use of the mark, the date of the applicant's first use of the mark in commerce, the goods in connection [191 L.Ed.2d 233] with which the mark is used, and a drawing of the mark." § 1051(a)(2). The usages listed in the application-- i.e., those goods on which the mark appears along with, if applicable, their channels of distribution--are critical. See, e.g., 3 McCarthy § 20:24, at 20-83 (" [T]he applicant's right to register must be made on the basis of the goods described in the application" ); id., § 20:15, at 20-85 (explaining that if an " application does not delimit any specific trade channels of distribution, no limitation will be" applied). The PTO generally cannot register a mark which " so resembles" another mark " as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1052(d).
If a trademark examiner believes that registration is warranted, the mark is published in the Official Gazette of the PTO. § 1062. At that point, " [a]ny person who believes that he would be damaged by the registration" may " file an opposition." § 1063(a). Opposition proceedings occur before the TTAB (or panels thereof). § 1067(a). The TTAB consists of administrative trademark judges and high-ranking PTO officials, including the Director of the PTO and the Commissioner of Trademarks. § 1067(b).
Opposition proceedings before the TTAB are in many ways " similar to a civil action in a federal district court." TTAB Manual of Procedure § 102.03 (2014) (hereinafter TTAB Manual), online at http://www.uspto.gov (as visited Mar. 20, 2015, and available in Clerk of Court's case file). These proceedings, for instance, are largely governed by the Federal Rules of Civil Procedure and Evidence. See 37 CFR § § 2.116(a), 2.122(a) (2014). The TTAB also allows discovery and depositions. See § § 2.120, 2.123(a). The party opposing registration bears the burden of proof, see § 2.116(b), and if that burden cannot be met, the opposed mark must be registered, see 15 U.S.C. § 1063(b).
The primary way in which TTAB proceedings differ from ordinary civil litigation is that " proceedings before the Board are conducted in writing, and the Board's actions in a particular case are based upon the written record therein." TTAB Manual § 102.03. In other words, there is no live testimony. Even so, the TTAB allows parties to submit transcribed testimony, taken under oath and subject to cross-examination, and to request oral argument. See 37 CFR § § 2.123, 2.129.
[135 S.Ct. 1301] When a party opposes registration because it believes the mark proposed to be registered is too similar to its own, the TTAB evaluates likelihood of confusion by applying some or all of the 13 factors set out in In re E. I. DuPont de Nemours & Co., 476 F.2d 1357 (CCPA 1973). After the TTAB decides whether to register the mark, a party can seek review in the U.S. Court of Appeals for the Federal Circuit, or it can file a new action in district court. See 15 U.S.C. § 1071. In district court, the parties can conduct additional discovery and the judge resolves registration de novo. § 1071(b); see also 3 McCarthy § 21:20 (explaining differences between the forums); cf. Kappos v. Hyatt, 566 U.S. ___, 132 S.Ct. 1690, 182 L.Ed.2d 704 (2012) ( de novo review for analogous scheme in patent law).
The Lanham Act, of course, also creates a federal cause of action for trademark infringement. The owner of a mark, whether registered or not, [191 L.Ed.2d 234] can bring suit in federal court if another is using a mark that too closely resembles the plaintiff's. The court must decide whether the defendant's use of a mark in commerce " is likely to cause confusion, or to cause mistake, or to deceive" with regards to the plaintiff's mark. See 15 U.S.C. § 1114(1)(a) (registered marks); § 1125(a)(1)(A) (unregistered marks). In infringement litigation, the district court considers the full range of a mark's usages, not just those in the application.
Petitioner B& B and respondent Hargis both manufacture metal fasteners. B& B manufactures fasteners for the aerospace industry, while Hargis manufactures fasteners for use in the construction trade. Although there are obvious differences between space shuttles and A-frame buildings, both aerospace and construction engineers prefer fasteners that seal things tightly. Accordingly, both B& B and Hargis want their wares associated with tight seals. A feud of nearly two decades has sprung from this seemingly commonplace set of facts.
In 1993 B& B registered SEALTIGHT for " threaded or unthreaded metal fasteners and other related hardwar[e]; namely, self-sealing nuts, bolts, screws, rivets and washers, all having a captive o-ring, for use in the aerospace industry." App. 223a (capitalization omitted). In 1996, Hargis sought to register SEALTITE for " self-piercing and self-drilling metal screws for use in the manufacture of metal and post-frame buildings." App. 70a (capitalization omitted). B& B opposed Hargis' registration because, although ...