I ATEN’T DEAD: The Continuing Trademark Saga of B&B Hardware v. Hargis Industries

Trademakr.pngBy Gwen Wei

Does anybody remember how B&B Hardware v. Hargis Industries started anymore?

B&B Hardware is a labyrinthine case grown out of simple roots: in 1993, B&B Hardware (“B&B”) trademarked “Sealtight”. Hargis Industries (“Hargis”) applied for a trademark on “Sealtite” in 1996. When B&B opposed Hargis’s application, Hargis sought to have B&B’s trademark cancelled. B&B retorted with a suit for infringement. This eventually led to a brief wrangle before the Trademark Trial and Appeal Board (“TTAB”), where the board found there was a likelihood of confusion between the two marks. But retelling the full twenty years of its litigious history, as Justice Alito later remarked, could fill a long, unhappy book.  Over the decades, B&B Hardware has devolved into a slapfest as the case was dismissed and refiled and remanded, surging all the way to the Supreme Court and back again. The case’s significance no longer lies in its eventual final verdict—whether B&B or Hargis gets to seal the deal, as it were—but in the precedent that it sets.

The Supreme Court made a little splash in the trademark pool when its decision broke in 2015. A 7-2 majority determined that agency decisions can ground issue preclusion for subsequent litigation, allowing the TTAB’s findings against Hargis to preclude later issues raised in district court.

A year later, the waters are still rippling.

A number of practitioners are arguing that the decision has fundamentally altered some aspects of the game. Some claim that registrants should treat the TTAB as a new battleground, and evaluate TTAB proceedings and appeals as if they’re part of an ongoing infringement suit. Others have elected to focus on how to limit the new avenues for damage opened up via TTAB actions, whether by minimizing marketplace discovery or by outstripping the TTAB altogether and filing de novo in district courts. (As if in answer to every trademark practitioner’s anti-litigious prayers, the TTAB published new procedural rules in April 2016, which simplified the discovery process and created leeway for settlements.)

On the academic side, scholars are still digesting the Thomas-Scalia dissent, which argued that B&B Hardware set a dangerous precedent by allowing an executive agency to dictate options for the judicial branch. And although the Court skirted roughly around potential Seventh Amendment and Article III issues, numerous commentators have rumbled about the inevitable constitutional objections in similar future lawsuits where issues have been precluded by agency proceedings.

But true litigation never says die—and so B&B Hardware tottered on to its next court, over twenty years after the marks at issue were filed. In May 2016, a district court held that B&B could still be entitled to injunctive relief and damages, provided that it succeeded in proving infringement at trial. The decision is particularly notable for two reasons:

(1) The court claimed that the TTAB’s issue preclusion changed the evidence admissible in the trial; and

(2) The court upheld the validity of the suit in spite of the discovery that B&B had failed to renew its registration for “Sealtight” in 2010, holding that “the Lanham Act does not require a registrant to maintain that registration through to trial.”

Recognizing, perhaps, the ridiculousness of litigating over a cancelled mark, the resulting jury trial in June 2016 ruled in favor of Hargis. Nevertheless, the verdict left potential for what seems, by now, to be an inevitable appeal. Who could blame either side? In the course of their single extended battle, B&B Hardware and Hargis have raised significant questions on the intersection between agency precedents and judicial decisions, and on modern discovery practices in TTAB proceedings. It’s an impressive record.

And after all, even the longest-running patent battle only stretched over thirty-eight years from application to verdict. Who knows? With care, the appropriate trademark renewals, and a few more appeals, B&B Hardware could still see another fifteen.

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