The U.S. Court of Appeals for the Federal Circuit held that the Trademark Trial and Appeal Board (TTAB) of the U.S. Patent and Trademark Office erred in ruling that Mayer/Berkshire Corp.’s opposition to Berkshire Fashions, Inc.’s application for use of the trademark “Berkshire” for apparel was barred by res judicata and collateral estoppel arising from prior district court litigation involving the trademark. The Court vacated the TTAB’s summary judgment and remanded the case for further proceedings.The TTAB granted summary judgment to Berkshire Fashions on the basis of a trademark infringement suit that Mayer/Berkshire brought in the U.S. District Court for the District of New Jersey, in which a jury found no likelihood of confusion resulting from Berkshire Fashions’ use of the trademark “Berkshire.” Finding that the issue of likelihood of confusion had been decided in the New Jersey civil action, the Board applied res judicata and collateral estoppel to deny Mayer/Berkshire’s challenge to the registration.
In vacating the summary judgment, the Court noted that a trademark infringement act in a district court is not automatically preclusive in an opposition proceeding before the TTAB because it may not be based on the same transactional facts, or the facts relevant to infringement may not be sufficiently applicable to trademark registration to warrant preclusion. In a trademark infringement suit the plaintiff must show actual injury, but in a likelihood of confusion opposition proceeding, the opposer only needs to show that “he would be damaged by the registration,” 15 U.S.C. § 1063.
The Court cited several transactional facts in dispute in the case that would avoid preclusion. Most significantly, the Court pointed to Mayer/Berkshire’s claim that Berkshire Fashions’ trademark application covers a broader statement of goods than those considered in the district court decision. Additionally, Mayer/Berkshire states that Berkshire Fashions has significantly changed its marketing and advertising practices subsequent to the district court decision in a manner that has caused actual confusion not previously experienced. According to the Court, these changed circumstances render preclusion improper.
Finally, the Court emphasized that caution is warranted in the application of preclusion because administrative trademark procedures are meant to protect not only the purveyors of trademarks but also consumers, who may suffer from confusion or deception. Because of the public policy underlying the principles of preclusion, its proper application is in situations where the circumstances for preclusion are certain to every intent.