United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 07-3866

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B & B Hardware, Inc., a California *

Corporation, *

*

Appellant, *

*

v. *

* Appeal from the United States

Hargis Industries, Inc., a Texas * District Court for the

Corporation, d/b/a Sealtite * Eastern District of Arkansas.

Building Fasteners, d/b/a East Texas *

Fasteners; East Texas Fasteners, a *

business entity of form unknown; *

John Does 1 through 10, inclusive, *

*

Appellees. *

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Submitted: September 25, 2008

Filed: June 22, 2009

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Before BYE, BEAM, and SHEPHERD, Circuit Judges.

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SHEPHERD, Circuit Judge.

B&B Hardware (“B&B”) appeals the district court’s dismissal, on collateral

estoppel grounds, of its trademark infringement action filed against Hargis Industries

(“Hargis”). For the reasons explained herein, we reverse the dismissal and remand

this matter to the district court for further consideration.
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I.

In 1990, B&B began manufacturing and selling a fastener product under the

name “Sealtight.” This product is largely used in the aerospace industry. Pursuant to

a 1990 application, B&B received a certificate of registration for the “Sealtight” mark

from the Patent and Trademark Office (PTO) on October 12, 1993. In 1992, Hargis

began manufacturing and selling, under the “Sealtite” mark, a line of self-drilling and

self-taping screws that are used primarily in the metal building industry. 

In July 1996, Hargis filed an application with the PTO to register its “Sealtite”

mark, but the PTO refused to grant the registration, citing the likelihood of confusion

with B&B’s “Sealtight” mark. In March 1997, Hargis sought before the PTO’s

Trademark Trial and Appeal Board (TTAB) to cancel the registration of B&B’s mark.

The TTAB initially granted the cancellation request, but later reinstated B&B’s

registration and stayed the TTAB proceedings pending the outcome of a federal

trademark infringement action filed by B&B against Hargis in June 1998 in the United

States District Court for the Eastern District of Arkansas. After a four day trial held

in May 2000, a jury returned a verdict in favor of Hargis, determining that B&B’s

“Sealtight” mark was merely descriptive and had not acquired a secondary meaning.

A panel of this court affirmed that decision on appeal. B&B Hardware, Inc. v. Hargis

Indus., Inc., 252 F.3d 1010 (8th Cir. 2001). 

Following the affirmance, Hargis requested that the TTAB resume proceedings

regarding Hargis’s request for cancellation of B&B’s mark. The TTAB permitted

Hargis to amend its petition to include as a ground, in accordance with the jury’s

determination, that B&B’s mark was merely descriptive and had not acquired a

secondary meaning. In July 2002, the TTAB granted Hargis’s motion for summary

judgment and canceled the registration of B&B’s “Sealtight” mark. The TTAB

subsequently reversed itself and held that the motion to amend the petition was
1

B&B filed this action in the United States District Court for the Central District

of California. Over B&B’s objections, it was transferred to the United States District

Court for the Eastern District of Arkansas. B&B sought retransfer back to the Central

District of California, but the motion was denied. The denial of the motion to

retransfer has not been raised on appeal. 

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untimely, set aside its grant of summary judgment, and dismissed the cancellation

proceeding. 

In February 2003, B&B filed an opposition to the Hargis’s application to

register its “Sealtite” mark. In reply, Hargis argued that the prior federal action, which

determined that there was no trademark infringement, should be given preclusive

effect by the TTAB. In August 2004, the TTAB rejected this argument, holding that

the jury in the federal trademark action had not made any findings concerning the

likelihood of confusion. The TTAB also held that Hargis was barred in its attempt to

cancel B&B’s mark on the basis that B&B’s mark was merely descriptive because

B&B’s mark had been registered for more than five years. 

In June 2006, B&B filed an affidavit of incontestability with the TTAB

regarding B&B’s “Sealtight” mark on the grounds that the mark had been on file for

five years without challenge. On September 21, 2006, the PTO issued a Notice of

Acknowledgement, recognizing that B&B’s “Sealtight” mark had become

incontestable. Meanwhile, in August 2006, B&B filed the present action against

Hargis, alleging trademark infringement, unfair competition, trademark dilution, and

false designation of origin.1

 Hargis sought an order of dismissal on grounds of res

judicata and collateral estoppel based upon the 2000 jury verdict. Following a

hearing, the district court granted Hargis’s motion to dismiss on the basis of collateral

estoppel. 

In granting the motion to dismiss, the district court recognized B&B’s mark had

become incontestable and that this status protected the mark from an attack that it is
2

 To prove a trademark infringement claim, a plaintiff must show that it has a

valid, protectible mark and that there is a likelihood of confusion between its mark and

the defendant’s mark. See Bd. of Supervisors for La. State Univ. Agric. & Mech.

Coll. v. Smack Apparel Co., 550 F.3d 465, 476 (5th Cir. 2008), petition for cert. filed,

77 U.S.L.W. 3562 (U.S. Mar. 23, 2009). A mark that has received incontestable status

“cannot be challenged . . . for mere descriptiveness, or on the basis that the mark lacks

secondary meaning.” Sunrise Jewelry Mfg. Corp. v. Fred S.A., 175 F.3d 1322, 1324

(Fed. Cir. 1999). 

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merely descriptive and without secondary meaning. The district court further

recognized that incontestability of a mark addresses one of two elements of a

trademark infringement action.2

 The court rejected, however, B&B’s argument that

receipt of incontestability status after initially losing a trademark infringement action,

without more, should prevent the application of collateral estoppel. The district court

explained, “B&B cites no authority for the proposition that incontestability makes any

difference where a prior judgment otherwise bars a subsequent infringement action.”

In reaching this outcome, the district court relied upon the Fifth Circuit’s decision in

Test Masters Educational Services, Inc. v. Singh, 428 F.3d 559 (5th Cir. 2005) (Test

Masters), holding that, “[t]he only recognized exception to issue preclusion for

trademark infringement is a material change in the trademark’s strength over an

extended period of time” and that “mere passage of time as a factor [does not] permit[]

relitigation of a previously failed claim.” The district court held B&B’s claims were

barred by collateral estoppel, reasoning that “B&B’s reliance on the incontestability

of its mark as a basis for denying the application of preclusion lacks persuasive

authority.” The district court concluded that the 2000 jury verdict, which held for

Hargis on B&B’s prior trademark infringement claim, was entitled to preclusive effect

and that application of collateral estoppel was appropriate. The district court granted

Hargis’s motion to dismiss the complaint. 

At the time of the dismissal order, the district court was unaware that the TTAB

had sustained B&B’s opposition to Hargis’s request to register its “Sealtite” mark

because of the likelihood of confusion with B&B’s “Sealtight” mark. B&B sought
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reconsideration of the district court’s dismissal order and attached the TTAB ruling

to its motion to reconsider. In denying the motion to reconsider, the district court held

“the decision of the TTAB is not entitled to preclusive effect . . . and does not create

an exception to permit relitigation of trademark infringement.” Further, the district

court noted that the TTAB decision “was not submitted until after entry of judgment

when it could have been brought to the Court’s attention before the motion to dismiss

was granted.” 

On appeal, B&B argues the district court erred in granting the motion to dismiss

on collateral estoppel grounds. B&B also contends the district court should have

given deference to the decisions of the TTAB that (1) B&B’s “Sealtight” registration

could not be attacked on grounds of descriptiveness because Hargis’s challenge was

not timely made and (2) the prior district court decision did not address the issue of

likelihood of confusion. 

II.

“This court reviews de novo the grant of a motion to dismiss for failure to state

a claim under Federal Rule of Civil Procedure 12(b)(6).” Levy v. Ohl, 477 F.3d 988,

991 (8th Cir. 2007). In conducting this review, we “assume[] as true all factual

allegations of the complaint.” Id. To survive dismissal, the complaint must allege

“only enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 570 (2007). We also review the applicability of

collateral estoppel, a question of law, de novo. Morse v. Comm’r, 419 F.3d 829, 833

(8th Cir. 2005). 

The district court determined that B&B’s trademark infringement claim was

barred by the doctrine of collateral estoppel or issue preclusion. 
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In the Eighth Circuit, issue preclusion has five elements: “(1) the party

sought to be precluded in the second suit must have been a party, or in

privity with a party, to the original lawsuit; (2) the issue sought to be

precluded must be the same as the issue involved in the prior action; (3)

the issue sought to be precluded must have been actually litigated in the

prior action; (4) the issue sought to be precluded must have been

determined by a valid and final judgment; and (5) the determination in

the prior action must have been essential to the prior judgment.”

Robinette v. Jones, 476 F.3d 585, 589 (8th Cir. 2007) (quoting Anderson v. Genuine

Parts Co., 128 F.3d 1267, 1273 (8th Cir. 1997)). 

According to B&B, the current action should not be barred by application of the

doctrine of collateral estoppel. B&B contends the jury in the prior action did not

reach the question of likelihood of confusion because it held instead that B&B’s

“Sealtight” mark was merely descriptive and had not acquired a secondary meaning.

B&B argues, therefore, that the issues raised in this action are not the same as those

involved in the prior action; that the question of likelihood of confusion was not

actually determined in the prior action; that no valid and final judgment has been

entered on the question of likelihood of confusion; and that a decision on the question

of likelihood of confusion was not necessary to the prior judgment. 

In granting the motion to dismiss on collateral estoppel grounds, the district

court found the reasoning of the Fifth Circuit in Test Masters to be “compelling and

controlling.” In Test Masters, after the Fifth Circuit reversed the district court’s denial

of defendant’s motion for judgment as a matter of law on the issue of secondary

meaning, the plaintiff filed a new complaint raising essentially the same claims as the

prior complaint. 428 F.3d at 568-69. However, the plaintiff’s claims in the second

action were based only on the facts surrounding the plaintiff’s mark arising since the

dismissal of the prior action. Id. The plaintiff sought the opportunity to relitigate the

question of whether its mark had obtained a secondary meaning because the new

claim involved different operative facts. Id. at 571. The Fifth Circuit rejected this
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attempt, holding that “[the plaintiff] ha[d] not alleged a significant intervening factual

change . . . that would suggest that there has been a change in the minds of the public”

sufficient to result in a different outcome on the issue of whether his mark had

obtained a secondary meaning. Id. at 576. As the district court noted, Test Masters

rejected “mere passage of time” as the only factor permitting relitigation of a previous

claim, requiring instead that a plaintiff demonstrate a “significant intervening factual

change.” 

Test Masters does not address the question of how a change in the validity of

a mark from contestable to incontestable should impact the application of collateral

estoppel. The court in Test Masters stated, “[t]he determination of whether a mark has

secondary meaning depends on dynamic factual scenarios that will necessarily vary

from case to case. The thrust of our holding is that [the plaintiff] has not alleged in

his pleadings any significant intervening factual change.” Id. at 575. “Because he has

not alleged a significant intervening factual change, we find that our previous holding

[that the mark had not acquired a secondary meaning] bars [the plaintiff’s] current

claim.” Id. at 576. Here, we are not concerned with the mere passage of time.

Instead, we are faced with a question of whether a change in a mark’s validity from

contestable to incontestable bars application of collateral estoppel. We hold that this

constitutes a significant intervening factual change, and, therefore, application of

collateral estoppel is inappropriate. 

In considering the requirements for applying collateral estoppel, there is no

disagreement that the parties involved in the prior litigation and this action are

identical. The question turns on whether the issue litigated and decided in the prior

action is the same as the issue presented in this action. See Robinette, 476 F.3d at

589. 

To prove a trademark infringement claim, a plaintiff must show that it has a

valid, protectible mark and that there is a likelihood of confusion between its mark and
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the defendant’s mark. See Bd. of Supervisors for La. State Univ. Agric. & Mech.

Coll. v. Smack Apparel Co., 550 F.3d 465, 474 (5th Cir. 2008) (“To prevail on their

trademark infringement claim, the plaintiffs must show two things. First, they must

establish ownership in a legally protectible mark, and second, they must show

infringement by demonstrating a likelihood of confusion.”), petition for cert. filed, 77

U.S.L.W. 3562 (U.S. Mar. 23, 2009). To demonstrate that the mark is valid and

protectible, a plaintiff must establish, in the case of a descriptive mark, that its mark

has acquired a secondary meaning. A plaintiff does so by showing that through “long

and exclusive use in the sale of the user’s goods, the mark has become so associated

in the public mind with such goods that the mark serves to identify the source of the

goods and to distinguish them from those of others.” Aromatique, Inc. v. Gold Seal,

Inc., 28 F.3d 863, 870 (8th Cir.1994) (citing Co-Rect Prods., Inc. v. Marvy! Adver.

Photography, Inc., 780 F.2d 1324, 1330 (8th Cir. 1985)). A court, in determining

whether a likelihood of confusion exists, considers: “(1) the strength of the trademark;

(2) the similarity between the plaintiff’s and defendant’s marks; (3) the competitive

proximity of the parties’ products; (4) the alleged infringer’s intent to confuse the

public; (5) evidence of any actual confusion; and (6) the degree of care reasonably

expected of the plaintiff’s potential customers.” Anheuser-Busch, Inc. v. Balducci

Publ’ns, 28 F.3d 769, 774 (8th Cir. 1994) (citing SquirtCo v. Seven-Up Co., 628 F.2d

1086, 1091 (8th Cir. 1987)). Because a plaintiff is required to prove different

elements in establishing a descriptive mark’s validity than in proving likelihood of

confusion, these are distinct issues for purposes of applying collateral estoppel. 

Hargis does not dispute that B&B’s “Sealtight” mark is now incontestable. See

15 U.S.C. § 1065 (after five years of continuous use, owner of registered trademark

may obtain incontestable status by filing affidavit that certain statutory requirements

have been met). Once a mark becomes incontestable, it “cannot be challenged . . . for

mere descriptiveness, or on the basis that the mark lacks secondary meaning.” Sunrise

Jewelry Mfg. Corp. v. Fred S.A., 175 F.3d 1322, 1324 (Fed. Cir. 1999); accord Park
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‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 205 (1985) (holding that an

alleged infringer may not argue that an incontestable mark is merely descriptive). 

In the prior action, the jury determined only that B&B’s mark was descriptive

and had not obtained a secondary meaning. With this determination, there was no

need to address the second element of a trademark infringement claim–whether there

was a likelihood of confusion between the two marks. While the issue of likelihood

of confusion may have been involved and litigated in the prior action, it was not

finally decided or essential to the prior judgment. According to the court’s directions,

the jury was instructed as follows: “If you found that the term “Sealtight” was merely

descriptive in Interrogatory No. 1 and had not acquired secondary meaning prior to

January 1, 1992, in Interrogatory Nos. 2 and 3, your duties are completed and you

need not proceed any further.” The jury did not reach the subsequent interrogatories

that addressed likelihood of confusion and whether there was actual confusion.

Accordingly, it is not appropriate to apply collateral estoppel to the current trademark

infringement action because the jury in the prior litigation never determined the

likelihood of confusion issue, a different and distinct issue from whether the mark was

valid and protectible. 

Hargis’s reliance on Federal Rule of Civil Procedure 49, an argument raised for

the first time in this appeal, is misplaced. Rule 49(a)(3) states:

Issues Not Submitted. A party waives the right to a jury trial on any

issue of fact raised by the pleadings or evidence but not submitted to the

jury unless, before the jury retires, the party demands its submission to

the jury. If the party does not demand submission, the court may make

a finding on the issue. If the court makes no finding, it is considered to

have made a finding consistent with its judgment on the special verdict.

Fed. R. Civ. P. 49(a)(3). Hargis argues that, because B&B did not demand that the

jury address the issue of likelihood of confusion or object to the conditional
3

The cases cited by Hargis to support this argument are distinguishable because

the cases involve situations where the issue was never presented to a jury. In AG

Systems, Inc. v. United Decorative Plastics Corp., the plaintiff failed to make a

demand, as contemplated by Rule 49(a)(3), that the issue be submitted to the jury, and

thus the plaintiff waived the right to raise the omission as error on appeal. 55 F.3d

970, 973-74 (4th Cir. 1995). In Fredonia Broadcasting Corp. v. RCA Corp., the

defendant failed to raise an objection to a question the district court erroneously

omitted, however the failure to object resulted in a waiver on appeal and the district

court was deemed to have decided the question in accordance with the judgment. 481

F.2d 781, 796 (5th Cir. 1973). 

4

It is clear that B&B intends to assert that the TTAB’s determination made in

2007 that there is a likelihood of confusion between the two marks should be given

preclusive effect by the district court on the claim of trademark infringement. B&B

acknowledges, however, that such argument “may best be saved for another day.” 

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instruction on the verdict form, we are required to read the lack of an answer to be

consistent with the jury’s determination that there is no trademark infringement.

Under this argument, Hargis would have us read the lack of an answer to be a

determination by the jury that there was no likelihood of confusion. This reading of

Rule 49(a)(3) is wholly without merit.3

 Here the question of likelihood of confusion

was presented to the jury and would have resulted in a determination by the jury had

resolution of the issue been necessary for a final judgment. As it was not necessary,

the jury did not address it. Rule 49(a)(3)’s waiver provision, which applies where the

issue is not submitted to the jury, is not applicable in this situation. 

Finally, in light of our decision to reverse the district court, we decline to

address B&B’s argument that the district court should have given preclusive effect to

the decisions of the TTAB. B&B requests that we give preclusive effect to two

decisions made by the TTAB: first, that B&B’s “Sealtight” registration could not be

attacked on grounds of descriptiveness because Hargis’s challenge was not timely

made and, second, TTAB’s finding that the prior district court decision did not

address the issue of likelihood of confusion.4

 It is unnecessary, in view of our
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conclusion that application of collateral estoppel based on the 2000 jury verdict is

inappropriate, to address whether the district court should have given deference to the

decisions of the TTAB. 

III.

Accordingly, we reverse the district court’s grant of dismissal and remand this

matter for further proceedings. 

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