IssuePreclusion in Trademark Actions
Arecent decision of the Supreme Court of the United States has raised concerns inthe U.S. with respect to the application of the issue preclusion doctrine concerningfindings made by the Trademark Trial and Appeal Board (“TTAB”).
The Facts
HargisIndustries, Inc. (“Hargis”) applied to register the trademark SEALTITE in theUnited States. B & B Hardware, Inc.(“B & B”) opposed the application claiming that the applied-for trademarkwas confusing with B & B’s SEALTIGHT trademark. The TTAB concluded that theapplied-for mark should not be registered because there was a likelihood ofconfusion. Hargis did not seek judicialreview of that decision.
Laterin an infringement action in the courts brought by B & B against Hargis, B& B argued that Hargis was precluded from contesting the likelihood ofconfusion because of the TTAB’s decision. The trial court disagreed, but when the issue made its way to theSupreme Court of the United States it was found that issue preclusion shouldapply.
Itseems that the primary reason for reaching this conclusion was that both theTTAB and the trial court were applying the same standard as to the likelihoodof confusion. There was a strong dissentin this case which said the TTAB is an administration tribunal with limitedjurisdiction to decide who is entitled to a registration with no right to stopanyone from using a mark. In addition, aTTAB decision can be appealed to the courts and reviewed on a de novo basis. These facts suggest that issue preclusionshould not apply.
Itseems the U.S. doctrine of issue preclusion is a more modern name for thecommon law concept of estoppel. Thisdoctrine prevents a person from re-litigating an issue which has been finallydetermined.
The Canadian Position
Thisissue has not gone to the Supreme Court of Canada but the Federal Court ofAppeal has taken a position different to that taken by the Supreme Court of theUnited States. In a decision decided in2005 the plaintiff had successfully opposed the registration of a trademark bythe defendant in a proceeding before the Trademarks Opposition Board on thebasis that the applied-for mark was confusing with the plaintiff’s mark. An appeal to the Federal Court from thatdecision was discontinued for unrelated reasons.
Despitethe fact that the defendant lost in the opposition they continued to use thedisputed mark and the plaintiff brought an action in the Federal Court. After a lengthy trial, the trial judgedismissed the action on the basis that the marks were not confusing.
Theplaintiff appealed to the Federal Court. On the appeal it was contended that the decision of the TrademarkOpposition Board refusing to register the trademark on the basis it wasconfusing should have been given more weight by the trial judge. The Federal Court of Appeal found that thetrial judge was not bound by the decision of the Opposition Board. While the decision of the Opposition Boardshould be considered, the weight, if any, it should be given was a merely asurrounding circumstance in the overall decision made by the trial judge.
Theburden of proof was different, in that the onus in an opposition is on theapplicant to show that there is not a reasonable and likelihood of confusion,while in an action in the Federal Court the onus of proof is on the plaintiffto prove its case. There was differentevidence presented in a different way. In a court proceeding, the evidence is givenpersonally by individuals. In anopposition, evidence is presented by way of affidavit. As a result, it was open to the trial judge togive little weight to the decision of the Opposition Board.
TheCourt said that the Canadian legal system was not a stranger to differentoutcomes arising out of the same factual situation where different issues areat stake and different evidence was introduced.
Comment
Whilepractitioners in Canada can take some reassurance from the decision of theFederal Court of Appeal in cases where issues are being re-litigated in theFederal Court there is significant uncertainty. First, the weight the trial judge will give to the Board’s decision isunknown. Second, the Federal Court instatutory appeals from the Board regularly gives deference to the Board’sdecisions as a result of its special expertise in trademark matters.
John McKeown
Goldman SloanNash & Haber LLP
480University Avenue, Suite 1600
Toronto,Ontario M5G 1V2
Direct Line:(416) 597-3371
Fax: (416)597-3370
Email: mckeown@gsnh.com
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