Sunday, June 28, 2009

8th Circuit: Intervening receipt of "incontestability" status defeats collateral estoppel in renewed trademark suit

The 8th Circuit recently handed down a decision holding that collateral estoppel did not bar a second trademark suit between the parties when, in between the two suits, the plaintiff received § 15 incontestability. The case concerned a unique fact situation that probably won’t pop up in any dispute we’ll ever see, but in case you’re still interested, I summarize it below.

Here’s the chronology in B & B Hardware v. Hargis Industries, Inc., No. 07-3866 (8th Cir. June 22, 2009): Plaintiff registered its mark. Defendant then petitioned the TTAB to cancel it. A short while later—and before Plaintiff’s registration qualified for incontestability status—Plaintiff sued Defendant for infringement in SUIT 1. The TTAB subsequently stayed Defendant's cancellation proceeding. A jury then found against Plaintiff in SUIT 1, expressly finding that its mark was merely descriptive and lacked secondary meaning. When the TTAB matter resumed, however, the TTAB wouldn’t let Defendant assert mere descriptiveness/lack of secondary meaning. It said it was too late to add that claim (which apparently was not one of the initial grounds for cancellation), and dismissed Defendant’s cancellation petition. Later, Plaintiff’s registration achieved incontestable status under § 15. Plaintiff then sued Defendant for infringement again in SUIT 2.

Defendant argued that collateral estoppel barred SUIT 2 because the jury in SUIT 1 previously held that the mark was merely descriptive and lacked secondary meaning. The 8th Circuit, however, disagreed. It held that the receipt of incontestability status constituted a “significant intervening factual change”—and reflected something more than just “the mere passage of time”—thus allowing PLAINTIFF to escape the clutches of collateral estoppel.

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