The Supreme Court recently decided a rare trademark case, which trademark owners should consider when prosecuting or defending proceedings before the administrative law arm of the Patent and Trademark Office, the Trademark Trial and Appeal Board.
In summary, one no longer can get two bites at the likelihood of confusion apple.
In B&B Hardware, Inc. v. Hargis Industries, Inc., B&B filed an opposition proceeding against Hargis, arguing the PTO should deny Hargis’ application for federal trademark registration because it would cause a likelihood of confusion with B&B’s prior trademark.
The parties litigated the issue to conclusion, and the TTAB agreed that Hargis’ mark would cause a likelihood of confusion. Hargis did not appeal.
The parties separately litigated in court the parallel issue of whether Hargis’ mark infringed B&B’s trademark rights. In that action, B&B argued that Hargis should be prevented from arguing that its mark did not cause a likelihood of confusion because it took that position in the TTAB proceeding and lost.
The court disagreed, and the jury found for Hargis — that Hargis’ use did not infringe B&B’s mark because it did not cause a likelihood of confusion.
B&B appealed, and the case worked its way up to the Supreme Court.
The Supreme Court reversed. It found the doctrine of “issue preclusion” should prevent a trademark owner from re-litigating an issue that was fully litigated before the TTAB. Because the standard for denying an application for registration and the standard for trademark infringement are basically the same — likelihood of confusion — the Supreme Court found that Hargis should not get a second chance to undo the TTAB’s finding when it could have appealed that decision and didn’t.
This ups the ante for trademark owners who go the distance in an opposition or cancellation proceeding before the TTAB. They should expect the TTAB’s findings to follow them into court in a subsequent trademark infringement lawsuit if the issues in both proceedings are substantially identical. If the loser in a TTAB proceeding wants to avoid the decision from haunting them later, they need to appeal it — or avoid an adverse decision altogether by not pursuing a questionable case with the TTAB from start to finish.
The case cite is B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 191 L. Ed. 2d 222 (2015).
Timing often doesn’t play a significant role in trademark filings. Because localized rights automatically arise through trademark use, an effort to expand those rights by obtaining a trademark registration is often driven by other factors.
In many cases, that works out fine. But in some, trademark owners should be more strategic — particularly with regard to timing. Here are three situations in which it pays to be smart about when to make trademark filings.
1. Beat third-party filers. Before alerting third parties about your trademark rights (through a cease-and-desist letter or otherwise), make sure your trademark house is in order. Part of that effort may involve applying to register the trademark. Even if you used your mark first, complaining about a third party’s infringing use may motivate that party to get their trademark house in order, too. If they beat your trademark filing by even a day, their application will be considered first. That risks delaying and even blocking your application, even if you have superior trademark rights. (Less nefariously, the same is true if a third party randomly happens to apply to register the same mark as yours.) Overcoming this obstacle can be a time-consuming and expensive undertaking. It’s so much better to avoid it by filing first.
2. Outsmart cybersquatters. Cybersquatters — people who register domain names on spec and make money selling them to trademark owners — routinely register domain names based on new trademark filings. They know if someone registers a trademark, they already have begun to invest in that brand. Cybersquatters rightly understand that many brand owners will pay a premium to own a domain name reflecting their name, particularly with the .com extension. Don’t let them profit from this logic. Trademark filings are public. Before showing your cards to the world, register your target domain name. Doing so before applying to register your trademark will ensure that your preferred domain name is yours — without delay and without enriching a cybersquatter.
3. Frustrate bad actors abroad. The United States is in the minority when it gives trademark rights to owners automatically through use. In most countries, the only way to get trademark rights is through registration. Like cybersquatters, free riders can take advantage of this norm by registering your brand in their country. Indeed, there’s nothing legally wrong with their doing so. Fortunately, there’s an easy solution: registering your trademark first. Doing so in the countries in which you manufacture and sell can eliminate the irony of infringing the trademark rights of someone who did nothing more than register your trademark first.
There’s a little-known way to maximize the value of a federal trademark registration — recording it with U.S. Customs and Border Protection.
Taking this extra step (and paying the $190 fee required to do so) puts your trademark on Customs’ radar screen. It helps put the government to work for you stopping counterfeit goods bearing your trademark at the border.
Besides alerting Customs about its mark, the owner of a federal trademark registration can provide additional information to help stop counterfeit goods from entering the States, such as the place authentic goods are manufactured; the authorized port of entry into the States; and what authentic goods look like. When Customs inspects goods bearing the registrant’s trademark that do not match this criteria, it will seize the goods and contact the trademark owner to determine whether the goods are real or fake.
Customs only inspects small percentage of goods that are imported into the States. To be sure, plenty of counterfeit goods make it through. But why not make it tougher on the counterfeiters? By working with Customs, you can leverage the value of your trademark registration and help the government help you.
Choosing the right trademark can be tricky.
There are lots of things to think about. But one principle can help guide proper trademark use: be proud.
Trademarks tell consumers that what you make or what you sell comes uniquely from you. If you’re rightfully proud of your business, you’ll want to stand out. You’ll want consumers to remember you. And you’ll want to keep copycats at bay. Strong trademarks help do all these things.
If you’re proud, you won’t want to ride on anyone else’s coat tails. You’ll want your name, logo, and tag line to set you apart. A bold trademark conveys confidence and strength. A common mark says you’re ordinary — one of many in a crowd.
If you’re proud, you won’t want to call to mind someone else’s trademark. Why distract the consumer with a mixed message, when it’s only you that you want consumers to remember?
Strong trademarks stick in consumers’ minds. Courts give them the broadest protection. The trademark office registers them, expanding their power.
So do what you can to stand out. Names that depend on industry jargon or mimic a competitor’s miss a great opportunity: signaling that your goods and services can only be purchased from you.
Selling something you’re proud of is the hard part. When you’re proud, selecting a powerful trademark is easy.
Clients often ask what form of trademark they should register.
Two words mashed together. Or with a space. Or a stylized version. Or a logo.
What’s the best form?
First, a trademark owner in the States doesn’t need to register its mark at all if it doesn’t want to. It automatically gets common law rights in the mark simply by using it in customer sales. When we talk about registering a mark — either with a state or with the U.S. Patent and Trademark Office — we’re talking about building on and expanding those automatic, localized rights that automatically arise through use.
Because of this, the form of use should drive what the owner seeks to expand through registration. That means if the owner uses two words mashed together in its advertising and on product packaging, that’s the form the owner should list in its application for state or federal registration. In other words, the use of the mark should drive the application.
That said, it’s usually to the owner’s advantage to apply to register the word form of the mark without any stylized format. The technical language to describe this form of mark is “standard characters without claim to any particular font, style, size, or color.” Describing one’s trademark this way on the application keeps the owner’s options open. In the future, as tastes change, the owner can change color or font or style, and as long as the new trademark still contains the word element, the new use will support the existing registration. That wouldn’t be the case if the owner applied to register a logo containing words, specifying the colors red and blue. If the owner down the road transitioned to a new logo with the same words in green and black, the owner would need to file a new application for registration to obtain the expanded trademark rights a registration offers.
In summary, the trademark used in a filing should follow the way the mark is used in the marketplace and, all things being equal, it’s usually best to apply to register the word form of the mark rather than a particular stylized form or logo. Doing so captures the maximum amount of intellectual property real estate, giving the trademark owner the most bang for its buck.