Notable Case – B&B Hardware, Inc. v. Hargis Industries, Inc.

A key part of American law is the hierarchical nature of the court system. The federal court system of the United States has three main levels: district courts (the trial court), circuit courts which are the first level of appeal, and the Supreme Court of the United States, the final level of appeal in the federal system. There are 94 district courts, 13 circuit courts, and one Supreme Court throughout the United States.

An important concept that goes along with the hierarchical nature of the United States Court system is the concept of res judicata. Res judicata is the principle that a matter may not, generally, be litigated again once it has been judged on the merits. Claim preclusion and issue preclusion are concepts within res judicata. Claim preclusion is the principle once a cause of action has been litigated, it may not be litigated again. Issue preclusion is the principle that once an issue of fact has been determined in a proceeding between two parties, the parties may not litigate that issue again even in a proceeding on a different cause of action.

So when the final decision of a district court is appealed to a higher court, the higher court typically does not question the facts on which the district court based that decision.

B&B Hardware, Inc. v. Hargis Industries is an important case because issue preclusion generally applies to courts, but not necessarily to the Patent and Trademark Office’s Trademark Trial and Appeal Board because it is an administrative body and not a court. In B&B Hardware, Inc. v. Hargis Industries the Supreme Court defined when issues decided by the Trademark Trial and Appeal Board will preclude the issues from being reviewed by higher courts.

The case B&B Hardware, Inc. v. Hargis Industries revolves around two companies that make hardware. B&B Hardware registered the trademark “Sealtight” their aerospace industry fasterner product in 1993. Hargis Industries sells self-drilling screws under the mark “Sealtite” to the construction industry. After Hargis applied to register its mark in 1996, B&B opposed the application and sued Hargis for infringement. The Trademark Trial and Appeal Board determined that there was a likelihood of confusion between the two companys’ trademarks and denied Hargis’ application to register their trademark. On appeal, the district court held that, because the Trial and Appeal Board is not a court, the district court may ignore the Trial and Appeal Board’s decision. A jury then found in favor of Hargis. The U.S. Court of Appeals for the Eighth Circuit affirmed the holding of the district court and held that, since the Eighth Circuit uses a slightly different likelihood of confusion test from the Trial and Appeal Board, the Trial and Appeal Board did not decide the same likelihood of confusion issues presented to the district court.

The Supreme Court held that so long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the Trademark Trial and Appeal Board are materially the same as those before a district court, issue preclusion should apply.

A complete discussion about the elements of issue preclusion is a complex and time consuming topic. The essential thing to remember is that even though the Trademark Trial and Appeal Board is not a court, the decisions of the Trademark Trial and Appeal Board are going to be treated as if they were made by a court.

If you ever find yourself in front of the Trademark Trial and Appeal Board take the matter seriously and argue your points to the best of you ability because you may not get a second chance to make your case. If you have questions you should consult with an experienced trademark attorney.