Default Judgment on One Trademark Opposition Did Not Preclude Litigating a Second Trademark Opposition
May 30, 2006
Last Month at the Federal Circuit - June 2006
Judges: Newman (author), Lourie, Schall
In Sharp Kabushiki Kaisha v. ThinkSharp, Inc., No. 05-1220 (Fed. Cir. May 30, 2006), the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (“TTAB”) decision that ThinkSharp, Inc. (“ThinkSharp”) was not required to litigate simultaneous oppositions and that res judicata did not apply when ThinkSharp chose only to defend one and the TTAB entered default judgment as to the second.
ThinkSharp filed a “word mark” application for THINKSHARP and a “word-and-design” application for THINKSHARP for use with educational goods and services. Sharp Kabushiki Kaisha (“Sharp”) filed a Notice of Opposition to the word mark registration and to the word-and-design registration, alleging that THINKSHARP is confusingly similar to and dilutes the SHARP trademark family.
ThinkSharp contested the word mark opposition, but failed to answer the word-and-design opposition, which consequently resulted in a default judgment. Sharp then argued that the default judgment entered against ThinkSharp’s word-and-design mark applied as res judicata to the word mark opposition. The TTAB rejected this argument, ruling that ThinkSharp was entitled to pursue one application and abandon the other without a default judgment precluding ThinkSharp from defending the pending opposition. The TTAB also decided on the merits of the opposition that SHARP and THINKSHARP were not likely to be confused.
On appeal, the Federal Circuit affirmed the holding of the TTAB. The Court held that issue preclusion did not apply because the merits of Sharp’s opposition to the word-and-design mark were not “litigated and decided.” Moreover, the Court found that claim preclusion did not apply because the issue of likelihood of confusion as to the word mark was not litigated in the defaulted opposition. Further, the Court explained that precedent required a clear and persuasive reason for denying a party of its day in court.
The Federal Circuit explained that the purpose of res judicata is to prevent a party from having to relitigate the same issue that was decided in a previous case. The Court reasoned that this purpose was not met in this case because the issues of likelihood of confusion and dilution were not litigated, and further, that the word-and-design mark was not identical to the word mark. Thus, absent an attempt to avoid the preclusive effect of an earlier judgment, a trademark applicant may choose which oppositions to defend without fear that a default judgment will negatively affect the pending oppositions.