716 F.3d 1020 (8th Cir. 2013), 10-3137, B & B Hardware, Inc. v. Hargis Industries, Inc.
|Docket Nº:||10-3137, 11-1247.|
|Citation:||716 F.3d 1020, 106 U.S.P.Q.2d 1660|
|Opinion Judge:||SHEPHERD, Circuit Judge.|
|Party Name:||B & B HARDWARE, INC., a California Corporation, Plaintiff-Appellant v. HARGIS INDUSTRIES, INC., a Texas Corporation, doing business as Sealtite Building Fasteners, doing business as East Texas Fasteners; East Texas Fasteners, a business entity of form unknown; John Does, 1 through 10, inclusive, Defendants-Appellees. B & B Hardware, Inc., a Califor|
|Attorney:||Timothy James Cullen, argued, Little Rock, AR, for appellant. Herbert A. Yarbrough, III, argued and on the brief, Tyler, TX, H. William Allen, Brooks C. White, Little Rock, TX, Debra Elaine Gunter, Tyler, TX, Susan J. Hightower, Austin, TX, on the brief, for appellees.|
|Judge Panel:||Before LOKEN, COLLOTON, and SHEPHERD, Circuit Judges. COLLOTON, Circuit Judge, dissenting.|
|Case Date:||May 01, 2013|
|Court:||United States Courts of Appeals, Court of Appeals for the Eighth Circuit|
Submitted: April 17, 2012.
Rehearing and Rehearing En Banc Denied June 20, 2013.
Following our prior remand, B & B Hardware, Inc. v. Hargis Industries, Inc., 569 F.3d 383 (8th Cir.2009), the district court conducted a seven-day jury trial on B & B Hardware's (" B & B" ) claim of trademark infringement and unfair competition and on Hargis Industries' (" Hargis" ) counterclaims of false advertising and false designation of origin. The jury returned a verdict which rejected B & B's claims but found in favor of Hargis on its counterclaims. After the district court entered judgment on the jury's verdict, it awarded attorney fees and costs to Hargis. B & B now appeals, arguing that the district court should have given preclusive effect to the Trademark Trial and Appeal Board's (" TTAB" ) findings concerning the likelihood of confusion of the two companies' trademarks. B & B also appeals the award of attorney fees and costs. We affirm the decision of the district court except as to attorney fees. On the matter of attorney fees, we remand for recalculation of those fees.
A more thorough review of the factual background of this case can be found in our prior decisions concerning these parties. B & B Hardware, Inc. v. Hargis Indus., Inc. (Hargis II), 569 F.3d 383 (8th Cir.2009); B & B Hardware, Inc. v. Hargis Indus., Inc. (Hargis I), 252 F.3d 1010 (8th Cir.2001). It is sufficient here to recall that B & B manufactures and sells a fastener product under the name " Sealtight" that is used predominantly in the aerospace industry, whereas Hargis manufactures a line of self-drilling and self-taping screws that are commonly used in the construction of metal buildings under the " Sealtite" mark. For over 15 years, these parties have been locked in litigation over these similar marks.
Upon remand, and as predicted, B & B sought " 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." Hargis II, 569 F.3d at 390 n. 4. In 2007, the TTAB denied Hargis's attempt to register its " Sealtite" mark, concluding that there was a likelihood of confusion with B & B's " Sealtight" mark. The district court rejected B & B's claim that the TTAB decision should be given preclusive effect on the question of likelihood of confusion. The district court held that because the TTAB is not an Article III court, our prior decision in Flavor Corp. of America v. Kemin Industries, Inc., 493 F.2d 275 (8th Cir.1974), does not require that the court give preclusive effect to the TTAB's decision. The district court further rejected B & B's attempt to admit the TTAB decision into evidence, concluding that to do so would be confusing and misleading to the jury.
The jury returned a verdict fully in favor of Hargis, finding that there was no likelihood of confusion between the two marks. Thus, the jury rejected B & B's claims of trademark infringement and unfair competition. Hargis prevailed on its claims of false advertising and false designation of origin. The district court entered judgment based on the jury's verdict and denied B & B's motion for judgment as a matter of law and for a new trial. The district court then granted Hargis's motion for attorney fees, holding that B & B's conduct of willfully and deliberately manufacturing evidence to support its
trademark infringement claim make this an exceptional case where the award of attorney fees is appropriate under the Lanham Act.
B & B brings this appeal. It argues: (1) the district court erred in failing to instruct the jury to give preclusive effect to the TTAB's decision that there was a likelihood of confusion between the two marks; (2) even if the TTAB's decision was not preclusive, the district court abused its discretion in not giving the TTAB's fact-findings deference or admitting the TTAB's decision into evidence; and (3) the district court erred in concluding that the award of fees was warranted under the Lanham Act. We consider each of these claims in turn.
In 2007, the TTAB denied Hargis's application for registration, determining that there was a likelihood of confusion between the two marks. B & B's primary argument in this appeal is that, under this court's decision in Flavor Corp., the TTAB's decision concluding there is a likelihood of confusion between the Sealtight and Sealtite marks deserves preclusive effect on that question, which necessarily requires entry of judgment in favor of B & B on its trademark infringement claim. As this issue raises a question of law as to whether the application of collateral estoppel is appropriate, we review the question de novo. See Morse v. Comm'r, 419 F.3d 829, 833 (8th Cir.2005).
In Flavor Corp., we addressed whether the defendant, Kemin Industries, was collaterally estopped from challenging the likelihood of confusion determination of the Court of Customs and Patent Appeals (" CCPA" ). Under the facts of that case, the TTAB determined that, due to the phonetically similar marks used by Flavor Corporation and Kemin Industries, there was reasonable likelihood of confusion. Kemin appealed this decision to the CCPA, which then affirmed the TTAB's determination. When the trademark infringement action was filed, the district court determined that the CCPA's decision on the question of likelihood of confusion collaterally estopped Kemin from challenging that decision in the trademark infringement action.
We affirmed on appeal, holding, " [W]here the CCPA has found a likelihood of confusion between two similar marks in a cancellation proceeding, that fact is precluded from relitigation in a subsequent infringement action between the same parties under the doctrine of collateral estoppel." Flavor Corp., 493 F.2d at 281. B & B argues that this holding compels this court to conclude that the district court erred when it refused to give preclusive effect to the findings of the TTAB. This is incorrect.
As the district court pointed out below, before we could apply collateral estoppel in Flavor Corp., we had to confirm " that some question or fact in dispute ha[d] been judicially and finally determined by a court of competent jurisdiction between the same parties or their privies." Flavor Corp., 493 F.2d at 279 (quotation omitted).1
We then noted that the Seventh Circuit had declined in John Morrell & Co. v. Doyle, 97 F.2d 232 (7th Cir.1938), to give CCPA determinations preclusive effect in subsequent infringement actions " because the CCPA was not an Article III court," but rather it " was...
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