A recent decision of the Supreme Court of the United
States has raised concerns in the U.S. with respect to the
application of the issue preclusion doctrine concerning findings
made by the Trademark Trial and Appeal Board
Hargis Industries, Inc. ("Hargis") applied to register
the trademark SEALTITE in the United States. B & B Hardware,
Inc. ("B & B") opposed the application claiming that
the applied-for trademark was confusing with B & B's
SEALTIGHT trademark. The TTAB concluded that the applied-for mark
should not be registered because there was a likelihood of
confusion. Hargis did not seek judicial review of that
Later in an infringement action in the courts brought by B &
B against Hargis, B & B argued that Hargis was precluded from
contesting the likelihood of confusion because of the TTAB's
decision. The trial court disagreed, but when the issue made its
way to the Supreme Court of the United States it was found that
issue preclusion should apply.
It seems that the primary reason for reaching this conclusion
was that both the TTAB and the trial court were applying the same
standard as to the likelihood of confusion. There was a strong
dissent in this case which said the TTAB is an administration
tribunal with limited jurisdiction to decide who is entitled to a
registration with no right to stop anyone from using a mark. In
addition, a TTAB decision can be appealed to the courts and
reviewed on a de novo basis. These facts suggest that issue
preclusion should not apply.
It seems the U.S. doctrine of issue preclusion is a more modern
name for the common law concept of estoppel. This doctrine prevents
a person from re-litigating an issue which has been finally
The Canadian Position
This issue has not gone to the Supreme Court of Canada but the
Federal Court of Appeal has taken a position different to that
taken by the Supreme Court of the United States. In a decision decided in 2005 the plaintiff had
successfully opposed the registration of a trademark by the
defendant in a proceeding before the Trademarks Opposition Board on
the basis that the applied-for mark was confusing with the
plaintiff's mark. An appeal to the Federal Court from that
decision was discontinued for unrelated reasons.
Despite the fact that the defendant lost in the opposition they
continued to use the disputed mark and the plaintiff brought an
action in the Federal Court. After a lengthy trial, the trial judge
dismissed the action on the basis that the marks were not
The plaintiff appealed to the Federal Court. On the appeal it
was contended that the decision of the Trademark Opposition Board
refusing to register the trademark on the basis that it was
confusing should have been given more weight by the trial judge.
The Federal Court of Appeal found that the trial judge was not
bound by the decision of the Opposition Board. While the decision
of the Opposition Board should be considered, the weight, if any,
it should be given was a merely a surrounding circumstance in the
overall decision made by the trial judge.
The burden of proof was different, in that the onus in an
opposition is on the applicant to show that there is not a
reasonable and likelihood of confusion, while in an action in the
Federal Court the onus of proof is on the plaintiff to prove its
case. There was different evidence presented in a different way. In
a court proceeding, the evidence is given personally by
individuals. In an opposition, evidence is presented by way of
affidavit. As a result, it was open to the trial judge to give
little weight to the decision of the Opposition Board.
The Court said that the Canadian legal system was not a stranger
to different outcomes arising out of the same factual situation
where different issues are at stake and different evidence was
While practitioners in Canada can take some reassurance from the
decision of the Federal Court of Appeal in cases where issues are
being re-litigated in the Federal Court there is significant
uncertainty. First, the weight the trial judge will give to the
Board's decision is unknown. Second, the Federal Court in
statutory appeals from the Board regularly gives deference to the
Board's decisions as a result of its special expertise in
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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