B&B Hardware Inc. v. Hargis Industries Inc.
Interviewer(s): Anthony M. Kennedy, Samuel A. Alito, Jr., Stephen G. Breyer, Elena Kagan, John G. Roberts, Jr., Ruth Bader Ginsburg, Antonin Scalia, Sonia Sotomayor
Interviewee(s): William M. Jay, John F. Bash

John G. Roberts, Jr.: We'll hear argument first this morning in Case 13352, B&B Hardware v. Hargis Industries.

Mr. Jay.

William M. Jay: Mr. Chief Justice, and may it please the Court:

The Lanham Act contains only one concept of likelihood of confusion.

That is why the two tribunals in this case decided the same issue, and that is why issue of preclusion is appropriate.

Whether a court is considering registration or infringement or both at the same time, the statutory test is the same, whether the resemblance of the marks as used on particular goods would give rise to a likelihood of confusion or mistake or deceit.

Ruth Bader Ginsburg: Mr. Jay, there are exceptions to preclusion even though you would see the identical issue, and one of them is when the stakes are higher in the second proceeding than in the first and, indeed, the restatement of judgments.

Do you have some examples of that?

And it seems to me this is such a case, because it's one thing to say that we won't register your mark and another to say you can't use the mark.

William M. Jay: There is an exception for when 5 when the stakes are different, Justice Ginsburg, but I think that the difference has to be a difference of an order of magnitude greater than we're dealing with here.

So I think the best example in the restatement is the example of a small claims court.

Small claims courts are set up in such a way that their designers understand their judgments won't be preclusive and that's what gets people to litigate there.

Here the stakes are different, but I don't think it can be said that the stakes before the Trademark Trial and Appeal Board are so low.

Ruth Bader Ginsburg: I don't think that your example of small claims court is the closest.

There's one on Exception 83, which is determinations by an administrative tribunal, and the example it gives is of a scheme that contemplates an agency proceeding to be as expeditious as possible.

And one way of assuring expeditiousness is to confine the stakes to the matter immediately in controversy.

William M. Jay: The matter immediately in controversy, though, in -- in this case, the matter is the same and the -- the way that--

Ruth Bader Ginsburg: The matter of controversy is registration, and in the second proceeding, it's infringement.

William M. Jay: --That's correct.

That's why there's no claim preclusion, for example.

So in that sense, they are different, but the inquiry that the two tribunals are asking is the same.

And to say that the -- the stakes are different, certainly, they're different, but I don't think that they are sufficiently different that you can infer from that that Congress wanted the trademark board's judgments not to be preclusive.

And I would encourage the Court to think about the ways in which the trademark board decides issues that will be, I think everyone would agree, exactly the same in subsequent litigation such as priority.

Priority is the key to determining who gets to register a mark, who's the senior mark, and who's -- and who's the junior mark.

The trademark board frequently decides that factual question, who came first, who started using it in commerce first.

And there's no reason to think that Congress would want that factual matter relitigated in a subsequent infringement action without regard to the proceeding that's come before.

Antonin Scalia: I suppose--

Sonia Sotomayor: Well, just--

Antonin Scalia: --I suppose in one sense the -- the trademark determination is broader rather than narrower than the infringement determination, right?

The infringement determination just applies to one alleged infringer whereas the trademark registration would register the trademark as against the world.

So I'm not sure that it's terribly narrower.

William M. Jay: Well, in the -- in an opposition or cancellation proceeding, Justice Scalia, there -- there is a concrete dispute between the holders of two marks.

But you're right that a registration is a right nationwide as against the world that gives you priority as of a certain date.

Ruth Bader Ginsburg: But -- but the person who uses the mark could continue to use it.

And the reason the restatement gives before the expeditious first proceeding is that you don't want to make that proceeding pull out all the stops because it's going to be determinative of the infringement suit.

William M. Jay: But I think you could say the same, Justice Ginsburg, if the Trademark Trial and Appeal Board's decision were appealed to a U.S. District Court or to the Federal Circuit.

The stakes would be the same.

The stakes would still be registration.

But I don't understand the other side to be saying that that tribunal's judgment would not be preclusive because -- because of a difference in the stakes.

They're saying that the issues are different to be sure.

They're saying that the legal issue of confuse -- of likelihood of confusion in infringement proceedings is different than the legal issue in registration proceedings.

But I think once you get past that argument, and I think the statute and the history and the structure all dispatch that, then I think that the -- I don't think that the notion that the stakes are different can save Respondents from preclusion here.

Samuel A. Alito, Jr.: Would you agree that if we accept your argument, the number of cases in which the elements of issue preclusion will be met by the TTAB proceeding will be relatively rare?

And if that is the case, is it worthwhile to create a rule that applies only in that very limited set of circumstances?

William M. Jay: I think, Justice Alito, that the number of circumstances in which the -- our rule would apply depends on the number of circumstances in which people seek to register the same goods that they are actually using.

Now, it's certainly true that sometimes people file registrations for goods that they don't intend to use and that their actual use in real life will be different.

But I do think that for the 40-some odd percent of registrations that are -- deal with marks already in use, that generally, when an applicant comes to the patent office and says, I'd like to register a trademark for use on these goods, that it's the goods that that person is already using.

So that under our rule when the marks are the same, the goods are the same, and they're sold in the same channels of commerce, that's when it's appropriate for preclusion to apply.

And I don't think that that's such a vanishingly small set of circumstances that you would say the game isn't worth the candle.

Sonia Sotomayor: --I have a bit of a problem, okay?

We have held that in -- in Kappos last year or two terms ago -- I've now lost track of time -- that an applicant who loses before the board can introduce new evidence at the trial.

So we have made the assumption that -- that an applicant doesn't have to produce everything.

So what happens in the situation when there is new evidence?

What kind of deference do we owe then?

Is it -- that's why I think Justice Alito said this might be a unique case because I -- then -- your adversary may tell me and tell me differently -- the two proceedings had almost identical evidence.

William M. Jay: That is certainly our position, that the proceedings were the same.

The only difference Respondent has identified is this point about the two-word phrase, “ building fasteners ”, which I'd be happy to come back to.

But I want to make sure I understand Your Honor's question.

You're asking what the preclusive effect of a district court's judgment would be if new evidence is--

Sonia Sotomayor: No.

Just assume that there's new evidence that they want to present at the infringement trial.

William M. Jay: --Oh, I see.

Sonia Sotomayor: So what's the charge the court gives?

What deference does the court ask to be given to the board in that situation?

William M. Jay: I think--

Sonia Sotomayor: It didn't have evidence that existed before.

William M. Jay: --Well, I think that there are -- there are two different questions.

One is whether the marks are the same, the goods are the same, and they're being sold in the same channels of commerce, and that's -- that is what would line up the infringement proceeding with the registration proceeding.

And saying I have new evidence that I would like to introduce that I didn't introduce before, you have the option to go up to the district court on review of the trademark board proceeding.

You always have that option, and that's what -- that is the significance of Kappos v. Hyatt.

If you don't take that option, I think you should not expect in the infringement litigation to say, well, preclusion doesn't apply merely because I think I have some new evidence.

And that's a bedrock principle of the law on judgments, that new evidence is not enough to get you right to preclusion, but--

Sonia Sotomayor: So you're talking about the effects of full preclusion.

William M. Jay: --Well--

Sonia Sotomayor: If you could have, you should have.

William M. Jay: --If you could have, you should have.

Now, there certainly will be -- there certainly are matters that the trademark board will not adjudicate, and there certainly are ways in which infringement litigation can differ and that the simplest way is if the goods are different.

So if you seek to register a broad array of goods and the trademark board finds a likelihood of confusion based on that broad array of goods in your registration, but the infringement action turns only on one -- you know, one good within that set, jeans instead of all clothing, for example, then I think preclusion wouldn't apply.

And that's the way the Federal Circuit applies it going in the opposite direction, that if infringement -- if infringement -- that no confusion judgment turns only on a tiny subset of the goods listed in the registration.

Well, then, of course the issue is different because--

Stephen G. Breyer: Suppose the -- and maybe this is what is worrying some people.

The marks, you have a mark, I have a mark, and I have -- it's like Louis Vuitton or something.

I mean, it covers just thousands of things.

And there is one manufacturer who makes one of those things, and he really thinks, I don't have to worry about this, you know.

If -- if I win or lose, it's not that big a deal.

I don't think they're going to come into my area really.

William M. Jay: --Louis Vuitton thinks this or the--

Stephen G. Breyer: No, the -- the competitor in one small thing like a lipstick or something, he doesn't think there is going to be Louis Vuitton lipstick, though there may be.

And sure enough, it is there, and sure enough, he does do it, so he just doesn't want to go to the time and trouble of having every possible bit of evidence and so forth.

And then lo and behold, later on it turns out this is a very big deal to him.

And what he's worried about is that that means I have to look at every trademark application, I have to give my all the first time, and if I don't, I'm stuck.

That's true, isn't it?

William M. Jay: --Well, it is true that whichever forum he goes to first, whether it's the trademark board or a court considering infringement, yes, he's supposed to give his all the first time because the judgment can be preclusive in future litigation.

But -- and I think that the reasons to pay attention to registration in the circumstances that you gave are significant ones, because if he just lets Louis Vuitton sit there in the market with a registration for 5 years, and Louis Vuitton's mark becomes incontestable then he has to face the consequences of that.

So I think that people who are already in the -- in the market and see a junior mark holder coming in and seeking registration, they have reasons to oppose that registration.

But if they don't want to go to the board, they don't have to go to the board.

No one ever has to go to the board who doesn't want to, because you always have the option of pursuing the cancellation relief or getting a mark cancelled or getting your mark registered.

You can do that in district court coupled with an infringement action.

So if you are the senior mark holder, sue for infringement and you'll have a jury trial, right.

If you win, then you can get the opposing mark cancelled, provided that it hasn't become uncontestable.

That, I think, is a large part of our answer to the other side's argument about the jury trial right, that there's always the option to sue.

There's also always the option to get Article III review of a judgment of the Trademark Trial and Appeal Board.

The board is just deciding a question of public right.

It's not trenching on the -- the role of Article III judges.

But once its renders such a judgment, as a matter of preclusion law, as a matter of statutory text, its judgment is preclusive because it's deciding the same issue and under this Court's decision in Astoria v. Solimino.

Elena Kagan: Do you happen to know what proportion of people in the situation that Justice Breyer indicated do go to the board?

And is the board the -- the primary avenue or is it not?

William M. Jay: That's a difficult question, Justice Kagan.

I know that there are more board proceedings filed each year, opposition and cancellation proceedings filed, than there are infringement actions, you know, trademark actions, filed in the district courts.

I know, however, that a lot of those don't go to final judgment, precisely because I think often the mere filing of an action in the -- in the board can alert the -- perhaps the junior mark holder that you're junior to someone else, you're going to have a problem if you don't either, A, reach an accommodation; B, limit yourself geographically; C, choose a different mark.

And I think that the board's proceedings may well be more conducive to that than litigation.

But in the -- there are, I think, fewer than 200 board cases that go to final judgment each year in contested proceedings.

I'm not sure how many trademark cases actually go to final judgment.

Anthony M. Kennedy: When you say “ to final judgment ”, you mean final judgment before the board or file judgment after review in the courts?

William M. Jay: I mean final judgment before the board, Justice Kennedy.

The number of litigants that actually go on and seek review, as you would expect, is smaller.

But there's certainly always the option to seek review, either before the Federal circuit under the APA standard of review or in district court.

And if you go to district court, you can, if you choose, introduce new evidence.

Sonia Sotomayor: You have alternatively argued in your brief for some form of deference if we're not going to call it preclusive.

It seemed to me that that was addressing an issue you didn't seek cert on, which was whether the court below erred in not permitting the mark holder to -- to tell the jury that the board had found a similarity and confusion.

But I don't know that you've actually made that argument, number one.

And number two, on what would you base a holding of deference?

In what field of law do we say, give deference and how -- what -- what's the standard that we would use?

William M. Jay: The -- first, Justice Sotomayor, let me be clear.

Our primary position is, of course, preclusion.

And the only reason that we would get into deference is if preclusion doesn't apply because, even though it's the same issue, for some reason the Trademark Board can't render a preclusive judgment, and we think that that issue is what's not properly been preserved because the other side waived it at the cert stage.

But if you got into that, we think that what you would look -- and this is why we put question 2 in our cert petition and the Court granted both questions, what you would look to, I think -- or, for example, the arbitration cases like Alexander v. Gardner-Denver, in which this Court decided that an arbitration in a Title VII action would not be -- arbitration would not be preclusive of a Title VII action.

But the fact that the same parties had litigated the same discrimination issue before an arbitration with, perhaps, the same evidence was entitled to evidentiary weight and perhaps if every -- if the proceedings were full and fair and the issues were really the same, perhaps, great weight, I think, is the final footnote in Gardner-Denver and then in McDonald v. City of West Branch.

Ruth Bader Ginsburg: Were those in days before you could get a jury trial in a Title VII case?

William M. Jay: The Court, I believe, had not held that at that point, Justice Ginsburg.

So I think that's -- I think that's correct.

But I don't think that the jury question has any effect on this because, you know, for example, there's -- there's a jury right in a 1983 case, there's a jury right in an ADEA case.

Ruth Bader Ginsburg: What disturbed the Eighth Circuit on that point was that the jury would be powerfully confused; it has enough to deal with what the charge in the infringement case is.

William M. Jay: It -- it certainly would require an explanation of what went on, but I think that that would have been better than instructing the jury, as was done here, that the two proceedings involved completely different issues and that the jury should not give it any weight at all.

If I may at this point, I'd like to reserve the balance of my time.

John G. Roberts, Jr.: Thank you, counsel.

Mr. Bash.

John F. Bash: Mr. Chief Justice, and may it please the Court:

Respondent has not identified any material difference between the issue decided by the board and the issue -- and what was at issue in the infringement case.

For that reason--

Elena Kagan: Mr. Bash, that's a very much stronger statement than your briefs make.

So your briefs go likely and probably and this and that.

And -- so are all of your likely's and probably's no longer true?

John F. Bash: --Well, the likely's or probably's were an opening for Respondent to identify a material difference between the suit and the board proceeding.

The reason we did that is because we were framing the standard in a slightly different way than it was proposed below.

And we think if the normal course of proceedings had happened, Petitioner would have asked for summary judgment and then Respondent should have come forward and identified some difference in the goods or marks or channels of trade, and then the district court and potentially the jury could have considered whether that difference was material.

The issues weren't teed up like that in the courts below, so we wanted to give Respondent a fair opportunity to identify a difference between what happened in the board and what happened before the court, and Respondent has not identified any difference that we would consider material under our standard.

Sonia Sotomayor: All right.

That's an even -- that's another fudge word, “ material ”.

They have represented one, which was the use of the mark with the word “ fastener ” or whatever it was that the -- that the Solicitor General's Office referred to earlier, that Mr. Jay referred to earlier.

So get to the stuff you think is immaterial.

John F. Bash: So the only difference that Respondent has identified is what we would characterize as a different mark, “ Sealtite Building Fasteners ” versus “ Sealtite ”.

Now, I think Petitioner has demonstrated that “ Sealtite Building Fasteners ” wasn't even really at issue in the trial, but even putting aside that factual distinction, the ordinary rule is just adding a generic term like “ building fasteners ” can't make the difference in a preclusion analysis.

So I think the way it should have worked had everything gone sort of the correct way is that Petitioner would have said, hey, the board proceeding gets issue preclusion in this infringement suit.

I'm suing about the word “ Sealtite ”, which is, by the way, what the jury was instructed, not “ Sealtite Building Fasteners ”.

Respondent then could have come forward and said, well, actually, the mark's a little different now.

It's “ Sealtite Building Fasteners ” or “ Sealtite Screws ” or “ Sealtite Nails ”.

And at the summary judgment stage, the district court would have had to make a judgment about whether that was a sufficiently different mark to obviate issue preclusion.

And the material standard is not just drawn from thin air.

It's the ordinary standard in issue preclusion where the question arises whether the second tribunal is considering a fundamentally different issue than the first tribunal.

I think in Montana v. United States, when this Court talked about the changed circumstances principle, it averted to that principle.

And it really has to be that way.

I mean, just imagine the court-to-court scenario, infringement court at time one and then infringement court at time two.

Surely, if Petitioner had obtained a judgment that the mark “ Sealtite ” infringes in an infringement court, Respondent couldn't then just add “ Fasteners ” and start the suit all over again and then once Respondent--

Ruth Bader Ginsburg: Well, how do you respond to the question I asked Mr. Jay, that is, as the Restatement of Judgments says, if one aspect of the first proceeding is to assure expeditiousness, then confining the stakes to that issue of registration makes sense so that the parties will not be induced to dispute the administrative proceeding in anticipation of its effect on another proceeding.

John F. Bash: --Justice Ginsburg, I think that's a correct statement of the law, but it's inapplicable here.

I think it has two components.

One is how expedited are the proceedings here?

How close is it to small court?

The other is what's at stake?

So let me just take both of those in turn.

This is not like small claims court or arbitral court.

This is a proceeding in which you have the full discovery permitted by the civil rules, in fact with respect to interrogatories, three times as many interrogatories as in the civil rules, the full Federal Rules of Evidence, including E-discovery.

It's just like a civil -- a civil proceeding.

And, in fact, then you can--

Ruth Bader Ginsburg: There are some differences.

There's no live testimony, right.

John F. Bash: --There is -- there's no live testimony, but I don't think that has ever been understood as the sort of difference between an administrative tribunal and a judicial proceeding that could effectively mean that there wasn't a full and fair opportunity to litigate the question.

Elena Kagan: One of the amicus briefs suggests that this is very, very much less expensive, so that it's like 10 percent of the cost of an infringement suit.

Why is that?

John F. Bash: Because in an infringement suit, the most discovery-intensive aspects, I think, are often damages and injunctive relief.

In other words, you really have to look at the other side's books to know how many of these products did you sell, what were your profits, and so forth.

So it's not surprising that in a suit where damages or injunctive relief is at issue, it could be, you know, four times the cost for discovery purposes of this kind of suit.

Antonin Scalia: I -- I find it hard to believe that this board proceeding is -- is intended to -- to be expeditious, because the losing party can go up to the district court and start all over again de novo.

John F. Bash: Thank you, Justice Scalia.

Antonin Scalia: How is that expeditious?

I don't understand that.

John F. Bash: I was going to follow on to my answer to Justice Ginsburg by making that point.

I mean, you have a full de novo trial in district court if you want it, and that doesn't reflect the sort of proceeding that Congress would have thought was summary in nature.

And I would just add one, I guess, higher-level point about the nature of the proceedings, which is that I think that can come into this case in two ways.

One, you could think that Congress would not have intended these proceedings to get preclusive effect because of their summary nature and I think that's how Respondent is using it.

But that -- that doesn't work, because Congress did not set the procedures for the board.

Section 1123 gives the director authority to set the procedures.

Stephen G. Breyer: That's -- that's what I think you'll hear in a minute, because in the brief, the red brief, on pages 30 to 31 and 8 and 9, there is discussion about the evidentiary procedures before the board.

And the -- the Respondent says they are much more limited.

One, you cannot call live witnesses; two, the board continuously says that they should not be like a district court.

They should be far more limited.

So I guess the argument is, well, in light of that procedural difference, he can't call all his witnesses, he can't test the consumer experts of the other side who say that there is no confusion, and he can't present his very credible expert who will come up and say, I interviewed 4,000 consumers and they are totally mixed up.

So -- so if you have that -- would you address that?

John F. Bash: I will address that.

The only significant difference is no live testimony in front of the adjudicator.

There is written depositions where the experts testify, they submit reports, and they can be cross-examined.

So the only significant difference is no live testimony in front of the adjudicator.

And as you know, that is a principle embodied in the APA as consistent with ordinary administrative action.

The adjudicator in an administrative tribunal does not need to hear the witness.

That's embodied in the APA provision cited in the reply brief.

The -- the other different -- purported differences that Respondent in one of the amicus briefs have identified are not actual differences.

They're quoting snippets of TTAB decisions where the board was perturbed that the parties engaged in excessive discovery and they said something like, Look, given the narrowest of what we're -- narrowness of what we're deciding -- in one of the cases it was descriptiveness -- you don't need to engage in full-blown discovery.

The rules and numerous TTAB decisions make very clear that full discovery is allowed.

The only other, I think, difference or purported difference identified in one of the amicus briefs was consumer surveys and the idea that they will only accept a consumer survey where it has the word on a blank card.

That's true -- you know, just the word “ Sealtite ” on a blank placard.

That's true when what is sought to be registered is a word mark, not a design mark with a particular color.

The idea being that you can't skew the survey by adding colors and things when actually what you're seeking registration for is just the word.

But the same thing could happen in an infringement court.

If the defendant was sued based on their registered word mark, I think a factfinder in an infringement court would say a survey that has design elements -- color, font, and so forth -- when you're asserting the right to use this word in any context, that sort of survey is not going to be as probative as a survey that just uses the word, since you're seeking the right to just use the word.

Elena Kagan: Mr. Bash, could you go back, I think it was to Justice Alito's question before, and just talk a little bit about, do you think that this is an unusual case in that the issues are the same or a usual case?

John F. Bash: I don't have statistics, so I'm just sort of speaking just from my experience reading the case law.

But I don't think it's terribly unusual.

I mean, I think a lot of times people seek to register a mark for the goods they sell and so an infringement suit is going to involve the same goods in the channels of trade those goods are ordinarily sold in.

So I don't think it's a situation where issue preclusion is not worth the candle, and in fact, I think it's extraordinary administrable, in fact, more administrable than the average just litigation context, because the limitations in the first action, in other words, what goods were at issue, what marks are at issue, what the channels of trade are, are often just set forth right there in the registration.

So it's not like you have to conduct a searching inquiry to figure out what was at issue in the first administrative proceeding.

You look at the registration.

If no common law rights are at issue on the opposition side, you look at the opposer's registration, and you say, okay, this was about cars sold to retail consumers; that's what was at issue in the board proceeding.

If now we're talking about cars sold to government or municipal entities, that is potentially a materially different issue.

And then you have to make the sort of materiality judgment that courts make every day.

But I guess I just want to close with I think Respondents' primary textual argument that what is being considered here are different issues is that the registration provision uses the word -- the phrase, “ so resembles ” and the infringement provision 1114 uses the phrase “ used in commerce ”.

I mean, as you can just see from the text of the provisions, they both are about the marks being used in commerce and whether the marks used in commerce would confuse people.

If I could just finish one sentence.

The -- and in the infringement provision, the phrase “ colorable imitation ” is defined, as the reply brief points out, as “ so resembles ”.

So the textual provisions are precisely parallel.

John G. Roberts, Jr.: Thank you, counsel.

Mr. Katyal.

Sonia Sotomayor: But you do have that alternative before -- after a board action.

Sonia Sotomayor: Well, that's my problem, which is, it seems to me, that you are rendering the board proceeding almost irrelevant with respect to litigation.

And it may be when you're seeking de novo review, but why should we say that you get a second bite at the apple after you've wasted the board's time?

Why not just tell you go straight -- if you're going to wait for an infringement action, go there.

Sonia Sotomayor: Except that in Kappos, we explicitly said that some weight should be given to the board's judgment.

So it's not as if it's being ignored altogether, right?

Sonia Sotomayor: But that's not what happened here.

The court below said, no, you can't give a jury -- you can't describe to this jury what the trademark board did.

You can't decide whether it was the same evidence and how much weight to give.

That's not the path that was followed here.

Antonin Scalia: But, but, but, but.

The board has to decide whether the trademark as applied to particular goods is confusing.

Once you say it's as applied to particular goods in a particular area of commerce, isn't that the same as saying has used whether it causes confusion?

Antonin Scalia: But even in use what causes the confusion will be the resemblance.

I don't care if you just add on -- tack on “ as used ”.

The problem is the resemblance between the two marks in every -- in every situation it seems to me.

Sonia Sotomayor: Was that presented to the board in this case?

Sonia Sotomayor: Was it presented to the board?

Sonia Sotomayor: That answer.

How you use the mark, the market.

I thought the board did.

Sonia Sotomayor: You didn't answer my question.

Was all of that -- was the same evidence--

Antonin Scalia: And this evidence could not have been introduced before the board.

Antonin Scalia: To be sure it was not introduced, but could it have been introduced before the board?

Stephen G. Breyer: Could you do this -- I don't know if you have time -- but with an example.

The reason I'm having a hard time, I'm thinking Louis Vuitton, say, all right.

Now Lilly Vuitton wants to register a mark.

Okay.

So we go to the TTAB and it's for lipstick.

And Lilly says, look it, it says Lilly Vuitton and Louis says, yeah.

And now the question is well, will it cause confusion when used in connection with the lipstick?

Stephen G. Breyer: So we look at it.

All right.

Now we're in the infringement action.

Exact same situation.

And here they are supposed to say, will it cause confusion when you -- when -- will it cause confusion in connection with the sale of any goods or services which includes the lipstick?

So I'm having a terrible time seeing what the difference is.

Stephen G. Breyer: It may be what I said, but I just didn't see it.

Stephen G. Breyer: Yes.

And it says the same thing here.

It says does it so resemble a mark as to cause confusion when used in connection with the goods?

Stephen G. Breyer: It's the resemblance in connection with the goods.

Stephen G. Breyer: Not how they're used.

Okay.

So what about saying this then.

We'd say, if it turns out that in your infringement case that was really an issue, you know, that was really a big deal in this -- a serious deal in this case, it's not because of the use of the goods, it's because of the resemblance through advertising cures it.

Then you don't have -- not -- not precluded.

You are only precluded in the case the SG says, which is where everything is really the same.

Anthony M. Kennedy: Would the -- would the same rule apply in a de novo review of the board's actions in a Federal district court?

Anthony M. Kennedy: And I was going to ask you in your answer to Justice Scalia in which you've talked about the narrowness of the issues, you would make the same comments and -- and give us the same instruction regarding what issues and what evidence is presented in the district court on de novo review?

John G. Roberts, Jr.: Well, the -- the issues are not always different.

Justice Breyer's lipstick example, I mean, that's sold in a retail market.

So the question is not -- there isn't going to be a different use from what the TTAB is looking at and what you want to be able to look at de novo.

But I gather in your case, you say these building fasteners, people don't go buy them like they buy lipstick, it's only more sophisticated general contractors.

So why isn't that enough of an answer to say that as a general matter, the TTAB provisions are preclusive, but if you are showing a different -- a difference in use or a more specialized use or something other than what the TTAB would have been looking at, preclusion doesn't apply.

Which I gather is -- is the way preclusion normally works.

John G. Roberts, Jr.: Well, I'm more concerned if the argument is available to you.

I mean, in other words, you're the one that is asking for the absence of preclusion.

And it seems to me that you could prevail on the idea that when the -- when the uses are actually different it's not precluded, but when they -- they are not -- when they are the same, it is.

That's the basic preclusion rule.

Antonin Scalia: Well, would you give me an example of -- of a situation in which the use is confusing but the resemblance is not?

Antonin Scalia: To be put on shoes?

Antonin Scalia: Well, I'm asking for an example where there is a confusing use, but not a confusing resemblance.

Antonin Scalia: Before the board, you are talking about.

Antonin Scalia: Okay, never mind the board.

Doesn't the court that is deciding whether this is an infringing use, doesn't that court have to decide whether that use is confusing by reason of the resemblance?

Stephen G. Breyer: Well, it says right here,

"so resembles a mark as to be likely to cause confusion when used on or in connection with the goods of the applicant. "

Stephen G. Breyer: So why doesn't Nike say, look at the Sike mark, look at how it's used.

As it's used and we use ours with a swish, of course it causes confusion.

Wouldn't they be free to tell the board that?

Stephen G. Breyer: They can't?

Stephen G. Breyer: Ah.

Stephen G. Breyer: Your example--

Elena Kagan: I guess -- I guess I'm just not understanding what you are saying.

I'm sure it's me.

But if you put this mark on the sneaker and then you say, well, is it confusing as it appears on the sneaker, isn't that exactly what the TTAB is asking?

Elena Kagan: Look, here is this mark.

Here is this good.

Here is this mark on this good.

Is that confusing?

John G. Roberts, Jr.: So just to make sure I understand, you are saying the mark is just S-I-K-E without the swoosh.

Samuel A. Alito, Jr.: Isn't the swoosh itself a mark?

Samuel A. Alito, Jr.: So you have introduced another mark.

I don't see how your example works.

Sonia Sotomayor: --I -- I understand you--

Anthony M. Kennedy: What is the answer?

Would that be confusing?

Anthony M. Kennedy: I need to know the answer--

Anthony M. Kennedy: --And--

Ruth Bader Ginsburg: Mr. Katyal Alderson--

Anthony M. Kennedy: --the -- the district court would hear no additional evidence that the board would not have heard other than the difference between oral and written?

Anthony M. Kennedy: No, no.

Anthony M. Kennedy: On de novo review.

Sonia Sotomayor: --I -- I'm sorry.

You keep saying we tried to put it in.

Did you put it in?

Sonia Sotomayor: The board did recite that they were used in a different market, and a lot of things that suggest they had all the information that you ultimately put in on trial -- at trial.

Sonia Sotomayor: By the way, is there a record?

I should have looked for it earlier.

Is the trademark record before us in the joint appendix?

Sonia Sotomayor: Yes.

No, no, no.

The record that was submitted to the trademark court.

Elena Kagan: Mr. Katyal, if we want to check up on what you are saying about these limitations, where would we look?

Where does the board say we don't look at use in the way that you're saying they don't look at use?

Elena Kagan: You know, I'm doing this quickly and on the fly, but isn't that the key phrase, “ unrestricted application ”?

Elena Kagan: They sought an unrestricted application.

Elena Kagan: And here there is not an unrestricted application.

Sonia Sotomayor: I didn't--

Elena Kagan: Is that your one case or do you have others?

Ruth Bader Ginsburg: --Mr. Katyal, Justice Scalia suggested that these are not expeditious proceedings before the whatever it is, TTAB.

And what -- what is the situation there?

I know it's a lot less expensive to go to the board than it is to go to a court, but how rapidly are these processed?

Samuel A. Alito, Jr.: I thought you said that the preclusion analysis would be the same if there were de novo review in the district court.

So if that's the case, then, how can you rely on the nature of the TTAB proceeding alone?

Samuel A. Alito, Jr.: Well, I see all those points, but do you claim that the district court proceeding is -- is expeditious and for that reason there would be no preclusion?

Stephen G. Breyer: --Quick question.

If you are right about the difference between resembling causing confusion and using in connection causing confusion, then if you go to the review procedure and you go into the full district court, that doesn't preclude either.

Stephen G. Breyer: So there's no preclusion whether you go to the district court or not in your basic statutory view there.

Anthony M. Kennedy: But it seems to me that, and I'll check what the experts in this area say in the amicus briefs, but it seems to me that the fact that this is a simpler proceeding and that a person concerned about cost would want the simpler proceeding and would want the preclusion.

Sonia Sotomayor: --I'm not sure that I buy that, because to the extent that someone's not going to settle and go away or get a sublicense, why should we be now inviting, instead of a district court proceeding, inviting an infringement action?

I mean, that will -- that's going to be more lengthy no matter what because then damages and a lot of other things are involved.

Elena Kagan: Well, Mr. Katyal, I'm just looking here at the TTAB's analysis and it seems to me it's loaded with stuff about use.

It says,

"B&B's sophisticated fasteners are primarily used in sealing applications while Hargis's products are the next step up from a nail and are not made for sealing. "

Elena Kagan: Again, it says,

"The products of the parties move in different channels of trade. "

It says,

"It's the use of substantially identical marks on closely-related products. "

John G. Roberts, Jr.: Thank you, counsel.

Mr. Jay, you have three minutes.

William M. Jay: Thank you, Mr. Chief Justice.

Everything Hargis wanted to put in at the trademark board it could have put in.

If it had won, it would have had a valuable protection.

And, Justice Kennedy, this goes to why litigants would -- would seek preclusion.

It would have been protected against an infringement action based on the same facts.

And that is why we think that the Federal Circuit has been for years affirming the idea that once you've already won in one tribunal in an infringement action, the trademark board shouldn't reach a different decision.

The trademark board should not be registering marks that infringe, it should not be withholding registration for marks that don't.

Let me point -- let me be absolutely clear about what the trademark board can consider.

I must respectfully disagree with my friend about -- about what he said.

If you want to consider the logo, the board can consider the logo.

Look at the Toro case about the mark LawnPup which had -- a which was used with a little dog.

Look at the Federal Circuit's decision in Kenner which dealt with the mark Play-Doh and which the Federal Circuit went on and on about the fact that the two products were used with trade dress that was exactly the same.

Even though--

Stephen G. Breyer: This -- remember the case we had where you can trademark a color.

William M. Jay: --Right.

Stephen G. Breyer: And it was a peculiar shade of green and used on dry cleaning pads.

Suppose I want to do that and I own the trademark, a junior person comes in and he has a different shade of green.

Okay?

Seems different.

Can I introduce evidence that the people who use these particular kinds of dry cleaners are colorblind?

And so they won't recognize the difference.

It has nothing to do with the use.

It has only to do with the customers or the conditions in which they are used.

Can I introduce that at the board or not?

William M. Jay: Let me -- I think no, but let me contrast with--

Stephen G. Breyer: No.

William M. Jay: --But the reason why -- what Hargis could put in, what it needed to put in, this just goes to the essential difference.

And this is what Justice Kagan brought out in her colloquy with my friend.

That there is a restriction in these registrations.

One is restricted to aerospace fasteners.

One is restricted to building fasteners.

And the differences between those marks, that's what the board took evidence on and considered.

It didn't just make up what the nature of the fastener market was.

It took evidence on it and that's why at 61A and 64A of the Petition Appendix it explains it understands that the fastener market is not monolithic.

It explains that there is not direct competition, but it understands that there is likely confusion because if you are looking for a fastener and you think that, oh, I'll buy a Sealtite fastener, it must be made by the aerospace people, that's what -- that's what they were getting at, and that's evidence that the board could come in.

My friend said repeatedly that the evidence was different between the proceedings.

Respectfully, that doesn't matter.

Page 52 of our blue brief, Section 27 of the Restatement of Judgments: New evidence is not what matters.

The question is were they asking the same question.

And the Trademark Board could and did take evidence about the question whether aerospace fasteners are so different from construction fasteners that, despite the phonetic identity of the marks, we should let Hargis use its mark on these different goods.

And the board said: We've looked at the differences, but we find that they are intrinsically related because they're both fasteners even if different.

Maybe that was right and maybe that was wrong.

We, of course, think it was right.

But if Hargis thought it was wrong its remedy was to appeal, not to relitigate.

Elena Kagan: Mr. Katyal suggested that -- he read from two cases which suggest some kind of different standard.

William M. Jay: The difference, Justice Kagan, is if both cases recite modems as to good, the board doesn't look beyond that and say, oh, fancy modems and cheap modems.

But if you recite different goods in your two registrations, it absolutely does look at the differences between those goods and that is why there is preclusion here.

John G. Roberts, Jr.: Thank you, counsel.

The case is submitted.