Trademark Review | April 2015

The Supreme Court Rules TTAB Findings May Have Preclusive Effect in Later Federal Court Proceedings

B&B and Hargis have long contested each other’s rights in the mark "SEALTIGHT" for fasteners. B&B was the first to the market and registered the mark first. The Trademark Office refused Hargis’s later registration based on a likelihood of confusion with B&B's senior mark. Hargis attempted to cancel B&B’s registration. The TTAB refused to cancel the registration and sustained B&B’s opposition to Hargis’ application.

In a subsequent action for infringement by B&B against Hargis, the district court refused to apply issue preclusion on the likelihood of confusion question, and the jury found Hargis did not infringe B&B’s mark. The Eighth Circuit affirmed the district court’s refusal to give the TTAB’s findings preclusive effect, reasoning the TTAB is not an Article III court, and the likelihood of confusion issues are different in the two forums—the TTAB decides whether a registration should be issued for a mark, while courts generally decide whether someone is infringing a mark.

The Supreme Court reversed the Eighth Circuit’s decision and held that, 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. Even though the TTAB and courts are weighing different things, their standards are “not fundamentally different, and, more important, the operative language of each statute is essentially the same.” The Court observed, however, that issue preclusion will not apply for “a great many” TTAB decisions, because the “ordinary elements” of preclusion will not have been met. For example, “[i]f the TTAB does not consider the market-place 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.”

This case, to some extent, resolves an inter-circuit split on the question of TTAB issue preclusion and clarifies that circuits should not apply a bright-line ban like the Eighth Circuit’s. The Court observed: “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.”

B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. ____, No. 13-352 (March 24, 2015).

Heinz Cannot Stop Registration of SMART BALANCE

ProMark Brands and H.J. Heinz Company (collectively “Opposers”) opposed applications from GFA Brands (“Applicant”) to register the mark SMART BALANCE for frozen entrees and other frozen snack foods and desserts, on the basis of the registered mark SMART ONES for frozen entrees dessert and other frozen foods.¹ The TTAB refused the opposition noting significant differences in the mark, particularly in view of the weakness of the “Smart” component, which is commonly used to describe healthy food products, and the 17 years of co-existence with no evidence of confusion. Further, the TTAB found that Applicant’s survey evidence supported a ruling of no likelihood of confusion.

The TTAB found Opposers’ survey, which claimed that 32% of the surveyed consumers were confused, to be fatally flawed. The survey excluded potential purchasers of SMART BALANCE products who were unaware of SMART ONES products, which the TTAB found “skewed the results of [the] survey by preventing those individuals least likely to be confused from participating.” Further, participating consumers were only asked closed-ended questions, and the survey did not include questions asking why the consumers might be confused.

Opposers also tried to establish that the SMART ONES mark is famous for purposes of showing likelihood of confusion. Although Opposers submitted evidence that the SMART ONES mark has been heavily marketed during its 20 years of existence and has achieved a high volume of sales, the SMART ONES mark always appears in conjunction with the WEIGHT WATCHERS mark. Thus, the TTAB found that promotional expenditures or resulting product sales do not support fame of the SMART ONES mark separate from the WEIGHT WATCHERS mark. Opposers also submitted survey results showing 82% consumer awareness of the brand, but the TTAB found the survey lacked evidentiary value because the study may have counted mentions of “WEIGHT WATCHERS SMART ONES” meals as mentions of “SMART ONES” meals. “If such mentions were made and were counted as mentions of SMART ONES meals, the uncertainty as to the fame of ‘SMART ONES’ alone persists.”

In light of the Supreme Court ruling in B&B Hardware reported above, parties may begin to submit survey evidence more frequently in proceedings before the Trademark Trial and Appeal Board. This case provides valuable guidance to parties about how to conduct consumer surveys.

ProMark Brands Inc. v. GFA Brands, Inc., Opposition Nos. 91194974 and 91196358 (TTAB March 27, 2015) (precedential).

¹ Heinz acquired the registrations from ProMark Brands while the oppositions were pending and joined as a party.

White Oak Wine Shuts Down White Oak Vodka

California winery White Oak Vineyard & Winery filed an infringement suit in California federal court against Florida vodka distiller White Oak Spirits. On White Oak Vineyard’s motion for a preliminary injunction, the court issued a tentative ruling granting the injunction on the basis consumers would likely confuse “White Oak” vodka and “White Oak” wine. The court noted that wine and vodka are distinct products, but that when sold under identical names, the goods are sufficiently related for there to be a likelihood of confusion. The court further noted that the Ninth Circuit has not recognized a distinction between wine and spirits in trademark cases. The Court was not influenced by White Oak Spirits’ argument that consumers would only think wine and vodka sold under the same mark are related if the earlier rights holder’s mark was well-known, such as “Robert Mondavi.” The Court rejected that argument, commenting that the White Oaks Winery is an established commercial enterprise and thus, some consumers must know of it.

At the end of March, the parties filed papers with the court stating that White Oak Vineyard will drop the infringement lawsuit in return for White Oak Spirits immediately and permanently ceasing use of the WHITE OAK brand name.

White Oak Vineyards & Winery v. White Oak Spirits, LLC, Case No. 2:14-cv-09830 (C.D. Cal. Mar. 9, 2015)