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SUPREME COURT OF THE UNITED STATES
_________________
No. 13–352
_________________
B&B HARDWARE, INC., PETITIONER
v. HARGIS INDUSTRIES,
INC., dba SEALTITE BUILDING FASTENERS, dba EAST TEXAS FASTENERS
et al.
on writ of certiorari to the united states court of appeals for
the eighth circuit
[March 24, 2015]
Justice Alito delivered the opinion of the Court.
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 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,60Stat.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 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.
I
A
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[8]
(2014) (hereinafter Gilson).
Though federal law does not create trademarks, see,
e.g.,
Trade-Mark Cases,100 U. S. 82,92 (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, 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.â€
§§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 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 applicationâ€);
id., §20:15, at 20–85
(explaining that if an “application does not
delimit any spe-cific 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.â€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, see15 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.
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 DeNemours & 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. See15 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. ___ (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, 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. See15
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.
B
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
the two companies sell different products, it believes that
SEALTITE is confusingly similar to SEALTIGHT.
The twists and turns in the SEALTIGHT versus SEALTITE
controversy are labyrinthine. The question whether either of these
marks should be registered, and if so, which one, has bounced
around within the PTO for about two decades; related infringement
litigation has been before the Eighth Circuit three times; and two
separate juries have been empaneled and returned verdicts. The full
story could fill a long, unhappy book.
For purposes here, we pick up the story in 2002, when the PTO
published SEALTITE in the Official Gazette. This prompted
opposition proceedings before the TTAB, complete with discovery,
including depositions. B&B ar-gued that SEALTITE could not be
registered because itis confusingly similar to SEALTIGHT. B&B
explained, for instance, that both companies have an online
presence, the largest distributor of fasteners sells both
companies’ products, and consumers sometimes
call the wrong company to place orders. Hargis rejoined that the
companies sell different products, for different uses, to different
types of consumers, through different channels of trade.
Invoking a number of the
DuPont factors, the TTAB sided
with B&B. The Board considered, for instance, whether SEALTIGHT
is famous (it’s not, said the Board), how the
two products are used (differently), how much the marks resemble
each other (very much), and whether customers are actually confused
(perhaps sometimes). See App. to Pet. for Cert.
55a–71a. Concluding that “the
most critical factors in [its] likelihood of confusion analysis are
the similarities of the marks and the similarity of the
goods,â€
id., at 70a, the TTAB determined that
SEALTITE—when “used in
connection with ‘self-piercing and self-drilling
metal screws for use in the manufacture of metal and post-frame
buildings’ â€â€”could
not be registered because it “so
resembles†SEALTIGHT when “used in
connection with fasteners that provide leakproof protection from
liquids and gases, fasteners that have a captive o-ring, and
‘threaded or unthreaded metal fastners and other
related hardware . . . for use in the
aerospace industry’ as to be likely to cause
confusion,â€
id., at 71a. Despite a right to do
so, Hargis did not seek judicial review in either the Federal
Circuit or District Court.
All the while, B&B had sued Hargis for infringement. Before
the District Court ruled on likelihood of confusion, however, the
TTAB announced its decision. After a series of proceedings not
relevant here, B&B argued to the District Court that Hargis
could not contest likelihood of confusion because of the preclusive
effect of the TTAB decision. The District Court disagreed,
reasoning that the TTAB is not an Article III court. The jury
returned a verdict for Hargis, finding no likelihood of
confusion.
B&B appealed to the Eighth Circuit. Though accepting for the
sake of argument that agency decisions can ground issue preclusion,
the panel majority affirmed for three reasons: first, because the
TTAB uses different factors than the Eighth Circuit to evaluate
likelihood of confusion; second, because the TTAB placed too much
emphasis on the appearance and sound of the two marks; and third,
because Hargis bore the burden of persuasion before the TTAB, while
B&B bore it before the District Court. 716 F. 3d
1020 (2013). Judge Colloton dissented, concluding that issue
preclusion should apply. After calling for the views of the
Solicitor General, we granted certiorari. 573 U. S. ___
(2014).
II
The first question that we must address is whether an agency
decision can ever ground issue preclusion. The District Court
rejected issue preclusion because agencies are not Article III
courts. The Eighth Circuit did not adopt that view, and, given this
Court’s cases, it was right to take that
course.
This Court has long recognized that “the
determination of a question directly involved in one action is
conclusive as to that question in a second suit.â€
Cromwell v.
County of Sac,94 U. S.
351,354 (1877). The idea is straightforward: Once a court has
decided an issue, it is “forever settled as
between the parties,â€
Baldwin v.
Iowa State
Traveling Men’s Assn.283 U. S.
522,525 (1931), thereby
“protect[ing]†against
“the expense and vexation attending multiple
lawsuits, conserv[ing] judicial resources, and foster[ing] reliance
on judicial action by minimizing the possibility of inconsistent
verdicts,â€
Montana v.
United States,440
U. S. 147–154 (1979). In short,
“a losing litigant deserves no rematch after a
defeat fairly suffered.â€
Astoria Fed. Sav. &
Loan Assn. v.
Solimino,501 U. S. 104,107
(1991).
Although the idea of issue preclusion is straightforward, it can
be challenging to implement. The Court, therefore, regularly turns
to the Restatement (Second) of Judgments for a statement of the
ordinary elements of issue preclusion. See,
e.g., Bobby v.
Bies,556 U. S. 825,834 (2009);
New
Hampshire v.
Maine,532 U. S.
742–749 (2001);
Baker v.
General
Motors Corp.,522 U. S. 222,233, n.5 (1998). The
Restatement explains that subject to certain well-known exceptions,
the general rule is that “[w]hen an issue of
fact or law is actually litigated and determined by a valid and
final judgment, and the determination is essential to the judgment,
the determination is conclusive in a subsequent action between the
parties, whether on the same or a different claim.â€
Restatement (Second) of Judgments §27, p. 250 (1980);
see also
id., §28, at 273 (listing exceptions
such as whether appellate review was available or whether there
were “differences in the quality or
extensiveness of the procedures followedâ€).
Both this Court’s cases and the Restatement
make clear that issue preclusion is not limited to those situations
in which the same issue is before two
courts. Rather, where
a single issue is before a court and an administrative agency,
preclusion also often applies. Indeed, this Court has explained
that because the principle of issue preclusion was so
“well established†at common law, in
those situations in which Congress has authorized agencies to
resolve disputes, “courts may take it as given
that Congress has legislated with the expectation that the
principle [of issue preclusion] will apply except when a statutory
purpose to the contrary is evident.â€
Astoria,
supra, at 108. This reflects the Court’s
longstanding view that
“ ‘[w]hen an
administrative agency is acting in a judicial capacity and resolves
disputed issues of fact properly before it which the parties have
had an adequate opportunity to litigate, the courts have not
hesitated to apply res judicata to enforce
repose.’ â€
University
of Tenn. v.
Elliott,478 U. S.
788–798 (1986) (quoting
United States v.
UtahConstr. & Mining Co.,384 U. S. 394,422
(1966)); see also
Hayfield Northern R. Co. v.
Chicago
& North Western Transp. Co.,467 U. S. 622,636,
n.15 (1984) (noting
Utah Construction);
Kremer v.
Chemical Constr. Corp.,456 U. S.
461–485, n. 26 (1982) (characterizing
Utah
Construction’s discussion of administrative
preclusion as a holding); Restatement (Second) of Judgments
§83(1), at 266 (explaining that, with some limits,
“a valid and final adjudicative determination by
an administrative tribunal has the same effects under the rules of
res judicata, subject to the same exceptions and qualifications, as
a judgment of a courtâ€).
Although apparently accepting
Astoria and
Utah
Construction,[
1] Hargis argues that we should
not read the Lanham Act (or, presumably, many other federal
statutes) as authorizing issue preclusion. Otherwise, Hargis warns,
the Court would have to confront
“ ‘grave and
doubtful questions’ as to the Lanham
Act’s consistency with the Seventh Amendment and
Article III of the Constitution.†Brief for Respondent
38 (quoting
United States ex rel. Attorney
General v.
Delaware & Hudson Co.,213
U. S. 366,408 (1909)). We are not persuaded.
At the outset, we note that Hargis does not argue that giving
issue preclusive effect to the TTAB’s decision
would be unconstitutional. Instead, Hargis contends only that we
should read the Lanham Act narrowly because a broad reading
might be unconstitutional. See,
e.g., Brief for
Respondent 37, 39, 40, 41–42. The likely reason
that Hargis has not directly advanced a constitutional argument is
that, at least as to a jury trial right, Hargis did not even list
the Seventh Amendment as an authority in its appellee brief to the
Eighth Circuit. Moreover, although Hargis pressed an Article III
argument below, in its opposition to certiorari in this Court,
Hargis seemingly con-ceded that TTAB decisions
can
sometimes ground issue preclusion, though it now protests
otherwise. SeeSupplemental Brief in Opposition 2. To the extent, if
any, that there could be a meritorious constitutional objection, it
is not before us. See
Plaut v.
Spendthrift Farm,
Inc.,514 U. S. 211–232
(1995).
We reject Hargis’ statutory argument that we
should jettison administrative preclusion in whole or in part to
avoid potential constitutional concerns. As to the Seventh
Amendment, for instance, the Court has already held that the right
to a jury trial does not negate the issue-preclusive effect of a
judgment, even if that judgment was entered by a juryless tribunal.
See
Parklane Hosiery Co. v.
Shore,439
U. S. 322,337 (1979). It would seem to follow naturally
that although the Seventh Amendment creates a jury trial right in
suits for trademark damages, see
Dairy Queen, Inc. v.
Wood,369 U. S. 469–480
(1962), TTAB decisions still can have preclusive effect in such
suits. Hargis disputes this reasoning even though it admits that in
1791 “ ‘a party
was not entitled to have a jury determine issues that had been
previously adjudi-cated by a chancellor in
equity.’ †Brief for
Respondent 39 (quoting
Parklane Hosiery,
supra, at
333). Instead, Hargis contends that issue preclusion should not
apply to TTAB registration decisions because there were no agencies
at common law. But our precedent holds that the Seventh Amendment
does not strip competent tribunals of the power to issue judgments
with preclusive effect; that logic would not seem to turn on the
nature of the competent tribunal. And at the same time, adopting
Hargis’ view would dramatically undercut agency
preclusion, despite what the Court has already said to the
contrary. Nothing in Hargis’ avoidance argument
is weighty enough to overcome these weaknesses.
The claim that we should read the Lanham Act narrowly to avoid
Article III concerns is equally
unavailing—andfor similar reasons. Hargis argues
that because it might violate Article III if an agency could make a
decision with preclusive effect in a later proceeding before a
federal court, we should conclude, as a statutory matter, that
issue preclusion is unavailable. Such a holding would not fit with
our precedent. For instance, in
Elliott, the Court, relying
on
Utah Construction, explained that absent a contrary
indication, Congress presumptively intends that an
agency’s determination (there, a state agency)
has preclusive effect. 478 U. S., at
796–799; see also
Astoria, 501
U. S., at 110 (recognizing the
“presumptionâ€). To be sure, the
Court has never addressed whether such preclusion offends Article
III. But because this Court’s cases are so
clear, there is no ambiguity for this Court to sidestep through
constitutional avoidance.[
2]
III
The next question is whether there is an
“evident†reason why Congress would
not want TTAB decisions to receive preclusive effect, even in those
cases in which the ordinary elements of issue preclusion are met.
Astoria,
supra, at 108. We conclude that nothing in
the Lanham Act bars the application of issue preclusion in such
cases.
The Lanham Act’s text certainly does not
forbid issue preclusion. Nor does the Act’s
structure. Granted, one can seek judicial review of a TTAB
registration decision in a
de novo district court action,
and some courts have concluded from this that Congress does not
want unreviewed TTAB decisions to ground issue preclusion. See,
e.g., American Heritage Life Ins. Co. v.
Heritage
Life Ins. Co., 494 F. 2d 3, 9–10 (CA5 1974).
But that conclusion does not follow. Ordinary preclusion law
teaches that if a party to a court proceeding does not challenge an
adverse decision, that decision can have preclusive effect in other
cases, even if it would have been reviewed
de novo. See
Restatement (Second) of Judgments §28, Comment
a
and Illustration 1 (explaining that the failure to pursue an appeal
does not undermine issue preclusion and including an example of an
apparently unappealed district court’s dismissal
for failure to state a claim); cf.
Federated Department Stores,
Inc. v.
Moitie,452 U. S. 394,398 (1981)
(noting “the res judicata consequences of a
final, unappealed judgment on the meritsâ€).
This case is also unlike
Astoria, where a plaintiff
claiming discrimination first went to an agency and then sued in
court about the same alleged conduct. See 501 U. S., at
111. The Court concluded, quite sensibly, that the structure of
that scheme indicated that the agency decision could not ground
issue preclusion. When exhausting an administrative process is a
prerequisite to suit in court, giving preclusive effect to the
agency’s determination in that very
administrative process could render the judicial suit
“strictly
pro forma.â€
Ibid.; see also
Elliott,
supra, at
795–796 (similar analysis). Here, if a party
urged a district court reviewing a TTAB registration decision to
give preclusive effect to the very TTAB decision under review,
Astoria would apply. But that is not this case.
What matters here is that registration is not a prerequisite to
an infringement action. Rather, it is a separate proceeding to
decide separate rights. Neither is issue preclusion a one-way
street. When a district court, as part of its judgment, decides an
issue that overlaps with part of the TTAB’s
analysis, the TTAB gives preclusive effect to the
court’s judgment. See App. to Pet. for Cert.
54a–55a (giving preclusive effect to the
District Court’s ear-lier decision regarding
SEALTIGHT’s distinctiveness be-cause the issue
“was actually litigated and necessarily
determinedâ€).
Hargis also argues that allowing TTAB decisions to have
issue-preclusive effect will adversely affect the registration
process. Because of the TTAB’s
“ ‘limited
jurisdiction’ †and
“ ‘the narrowness
of the issues’ †before
it, Hargis contends, the Court should infer that TTAB proceedings
are supposed to be more streamlined than infringement litigation.
See Brief for Respondent 30 (quoting TTAB Manual
§402.01). But, the argument goes, if TTAB decisions can
have issue-preclusive effect in infringement litigation, parties
may spend more time and energy before the TTAB, thus bogging down
the registration process. This concern does not change our
conclusion. Issue preclusion is available unless it is
“evident,â€
Astoria,
supra, at 108, that Congress does not want it. Here, if a
streamlined process in all registration matters was particularly
dear to Congress, it would not have authorized
de novo
challenges for those “dissatisfiedâ€
with TTAB decisions.15 U. S. C.
§1071(b). Plenary review serves many functions, but
ensuring a streamlined process is not one of them. Moreover, as
explained below, for a great many registration decisions issue
preclusion obviously will not apply because the ordinary elements
will not be met. For those registrations, nothing we say today is
relevant.
IV
At last we turn to whether there is a categorical reason why
registration decisions can never meet the ordinary elements of
issue preclusion,
e.g., those elements set out in
§27 of the Restatement (Second) of Judgments. Although
many registrations will not satisfy those ordinary elements, that
does not mean that none will. We agree with Professor McCarthy that
issue preclusion applies where “the issues in
the two cases are indeed identical and the other rules of
collateral estoppel are carefully observed.†6 McCarthy
§32:99, at 32–244; see also 3 Gilson
§11.08[4][i][iii][B], p. 11–319
(“Ultimately, Board decisions on likelihood of
confusion . . . should be given preclusive
effect on a case-by-case basisâ€).
A
The Eighth Circuit’s primary objection to
issue preclusion was that the TTAB considers different factors than
it does. Whereas the TTAB employs some or all of the
DuPont
factors to assess likelihood of confusion, the Eighth Circuit looks
to similar, but not identical, factors identified in
SquirtCo v.
Seven-Up Co., 628 F. 2d 1086, 1091 (CA8
1980). The court’s instinct was sound:
“[I]ssues are not identical if the second action
involves application of a different legal standard, even though the
factual setting of both suits may be the same.†18 C.
Wright, A. Miller, & E. Cooper, Federal Practice &
Procedure §4417, p. 449 (2d ed. 2002) (hereinafter
Wright & Miller). Here, however, the same
likelihood-of-confusion standard applies to both registration and
infringement.
To begin with, it does not matter that registration and
infringement are governed by different statutory provisions. Often
a single standard is placed in different statutes; that does not
foreclose issue preclusion. See,
e.g., Smith v.
Bayer Corp., 564 U. S. ___, ___ (2011) (slip
op., at 7). Neither does it matter that the TTAB and the Eighth
Circuit use different factors to assess likelihood of confusion.
For one thing, the factors are not fundamentally different, and
“[m]inor variations in the application of what
is in essence the same legal standard do not defeat
preclusion.â€
Id., at ___, n. 9 (slip
op., at 12, n. 9). More important, if federal law
provides a single standard, parties cannot escape preclusion simply
by litigating anew in tribunals that apply that one standard
differently. A contrary rule would encourage the very evils that
issue preclusion helps to prevent.
The real question, therefore, is whether likelihood of confusion
for purposes of registration is the same standard as likelihood of
confusion for purposes of infringement. We conclude it is, for at
least three reasons. First, the operative language is essentially
the same; the fact that the registration provision separates
“likely†from “to
cause confusion, or to cause mistake, or to deceiveâ€
does not change that reality.[
3] See 2 Gilson
§5.01[2][a], at 5–17 (explaining
that “the same statutory testâ€
applies). Second, the likelihood-of-confusion language that
Congress used in these Lanham Act provisions has been central to
trademark registration since at least 1881. See Act of Mar. 3,
1881, ch. 138, §3,21Stat.503 (using a
“likely to cause confusion†standard
for registration). That could hardly have been by accident. And
third, district courts can cancel registrations during infringement
litigation, just as they can adjudicate infringement in suits
seeking judicial review of registration decisions. See15
U. S. C. §1119; 3 McCarthy
§21:20. There is no reason to think that the same
district judge in the same case should apply two separate standards
of likelihood of confusion.
Hargis responds that the text is not actually the same because
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). Indeed, according to Hargis, the distinction
between “resembl[ance]†and
“use†has been key to trademark law
for over a century. There is some force to this argument. It is
true that “a party opposing an application to
register a mark before the Board often relies only on its federal
registration, not on any common-law rights in usages not
encompassed by its registration,†and
“the Board typically analyzes the marks, goods,
and channels of trade only as set forth in the application and in
the opposer’s registration, regardless of
whether the actual usage of the marks by either party
differs.†Brief for United States as
Amicus
Curiae 23; see also
id., at 5 (explaining that
“the Board typically reviews only the usages
encompassed by the registrationâ€) (citing 3 Gilson
§9.03[2][a][ii]); 3 McCarthy §20:15, at
20–45 (explaining that for registration
“it is the mark as shown in the application and
as used on the goods described in the application which must be
considered, not the mark as actually usedâ€). This means
that unlike in infringement litigation, “[t]he
Board’s determination that a likelihood of
confusion does or does not exist will not resolve the confusion
issue with respect to non-disclosed usages.†Brief for
United States as
Amicus Curiae 23.
Hargis’ argument falls short, however,
because it mistakes a reason not to apply issue preclusion in some
or even many cases as a reason never to apply issue preclusion.
Just because the TTAB does not always consider the
same
usages as a district court does, it does not follow that the
Board applies a
different standard to the usages it does
consider.[
4] If a mark owner uses its mark in
ways that are materially the same 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. By contrast, if a mark owner uses its mark in ways that
are materially unlike the usages in its application, then the TTAB
is not deciding the same issue. Thus, if the TTAB does not consider
the marketplace usage of the parties’ marks, the
TTAB’s decision should “have
no later preclusive effect in a suit where actual usage in the
marketplace is the paramount issue.†6 McCarthy
§32:101, at 32–246.
Materiality, of course, is essential—trivial
variations between the usages set out in an application and the use
of a mark in the marketplace do not create different
“issues,†just as trivial variations
do not create different “marks.†See
generally 4
id., §23:50, at
23–265 (explaining that
“adding descriptive or
non-distinctive†elements to
another’s mark generally will not negate
confusion). Otherwise, a party could escape the preclusive effect
of an adverse judgment simply by adding an immaterial feature to
its mark. That is not the law. See,
e.g., Restatement
(Second) of Judgments §27, Comment
c, at
252–253 (explaining that
“issue†must be understood broadly
enough “to prevent repetitious litigation of
what is essentially the same disputeâ€);
United
States v.
Stauffer Chemical Co.,464 U. S.
165,172 (1984) (applying issue preclusion where a party sought to
“litigate twice . . . an
issue arising . . . from virtually
identical facts†because the
“factual differences†were
“of no legal significanceâ€).
A fortiori, if the TTAB considers a different mark
altogether, issue preclusion would not apply. Needless to say,
moreover, if the TTAB has not decided the same issue as that before
the district court, there is no reason why any deference would be
warranted.
For a similar reason, the Eighth Circuit erred in holding that
issue preclusion could not apply here because the TTAB relied too
heavily on “appearance and sound.â€
App. to Pet. for Cert. 10a. Undoubtedly there are cases in which
the TTAB places more weight on certain factors than it should. When
that happens, an aggrieved party should seek judicial review. The
fact that the TTAB may have erred, however, does not prevent
preclusion. As Judge Colloton observed in dissent,
“ ‘issue
preclusion prevent[s] relitigation of wrong decisions just as much
as right ones.’ †716
F. 3d, at 1029 (quoting
Clark v.
Clark,
984 F. 2d 272, 273 (CA8 1993)); see also Restatement
(Second) of Judgments §28, Comment
j, at 284
(explaining that “refusal to give the first
judgment preclusive effect should not . . .
be based simply on a conclusion that [it] was patently
erroneousâ€).
B
Hargis also argues that registration is categorically
incompatible with issue preclusion because the TTAB uses procedures
that differ from those used by district courts. Granted,
“[r]edetermination of issues is warranted if
there is reason to doubt the quality, extensiveness, or fairness of
procedures followed in prior litigation.â€
Montana, 440 U. S., at 164, n. 11;
see also
Parklane Hosiery, 439 U. S., at 331,
and n. 15 (similar). But again, this only suggests that
sometimes issue preclusion might be inappropriate, not that it
always is.
No one disputes that the TTAB and district courts use different
procedures. Most notably, district courts feature live witnesses.
Procedural differences, by themselves, however, do not defeat issue
preclusion. Equity courts used different procedures than did law
courts, but that did not bar issue preclusion. See
id., at
333. Nor is there reason to think that the state agency in
Elliott used procedures identical to those in federal court;
nonetheless, the Court held that preclusion could apply. See 478
U. S., at 796–799. Rather than
focusing on whether procedural differences
exist—they often will—the
correct inquiry is whether the procedures used in the first
proceeding were fundamentally poor, cursory, or unfair. See
Montana, 440 U. S., at 164,
n. 11.
Here, there is no categorical “reason to
doubt the quality, extensiveness, or fairness,â€
ibid., of the agency’s procedures. In
large part they are exactly the same as in fed-eral court. See 37
CFR §§2.116(a), 2.122(a). For instance,
although the “[t]he scope of discovery in Board
proceedings . . . . is
generally narrower than in court
proceedingsâ€â€”reflecting the fact
that there are often fewer usages at issue—the
TTAB has adopted almost the whole of Federal Rule of Civil
Procedure 26. TTAB Manual §402.01; see also
id.,
§401. It is conceivable, of course, that the
TTAB’s procedures may prove ill-suited for a
particular issue in a particular case,
e.g., a party may
have tried to introduce material evidence but was prevented by the
TTAB from doing so, or the TTAB’s bar on live
testimony may materially prejudice a party’s
ability to present its case. The ordinary law of issue preclusion,
however, already accounts for those
“rare†cases where a
“compelling showing of unfairnessâ€
can be made. Restatement (Second) of Judgments §28,
Comments
g and
j, at 283–284.
The Eighth Circuit likewise erred by concluding that Hargis bore
the burden of persuasion before the TTAB. B&B, the party
opposing registration, bore the burden, see 37 CFR
§2.116(b); TTAB Manual §702.04(a), just as
it did in the infringement action. Hargis does not defend the
decision below on this ground.
C
Hargis also contends that the stakes for registration are so
much lower than for infringement that issue preclusion should never
apply to TTAB decisions. Issue preclusion may be inapt if
“the amount in controversy in the first action
[was] so small in relation to the amount in controversy in the
second that preclusion would be plainly unfair.â€
Restatement (Second) of Judgments §28, Comment
j, at 283–284. After all,
“[f]ew . . . litigants
would spend $50,000 to defend a $5,000 claim.†Wright
& Miller §4423, at 612. Hargis is wrong, however,
that this exception to issue preclusion applies to every
registration. Tothe contrary: When registration is opposed, there
isgood reason to think that both sides will take the matter
seriously.
The benefits of registration are substantial. Registration is
“prima facie evidence of the validity of the
registered mark,â€15 U. S. C.
§1057(b), and is a precondition for a mark to become
“incontestable,†§1065.
Incontestability is a powerful protection. See,
e.g., Park
’N Fly, Inc. v.
Dollar Park & Fly,
Inc.,469 U. S. 189,194 (1985) (holding that an
incontestable mark cannot be challenged as merely descriptive); see
also
id., at 193 (explaining that
“Con-gress determined that
. . . ‘trademarks should
receive nationally the greatest protection that can be given
them’ †and that
“[a]mong the new protections created by the
Lanham Act were the statutory provisions that allow a federally
registered mark to become incontestable†(quoting
S. Rep. No. 1333, 79th Cong., 2d Sess., 6 (1946))).
The importance of registration is undoubtedly why Congress
provided for
de novo review of TTAB decisions in district
court. It is incredible to think that a district
court’s adjudication of particular usages would
not have preclusive effect in another district court. Why would
unchallenged TTAB decisions be different?
Congress’ creation of this elaborate
registration scheme, with so many important rights attached and
backed up by plenary review, confirms that registration decisions
can be weighty enough to ground issue preclusion.
V
For these reasons, the Eighth Circuit erred in this case. On
remand, the court should apply the following rule: 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 the district court, issue preclusion should apply.
The judgment of the United States Court of Appeals for the
Eighth Circuit is reversed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.