Federal Circuit Court Of Appeals Leaves Open The Question Of Whether ITC Determinations Of Trademark Issues Have Preclusive Effect

Author:Ms Alexandra MacKay
Profession:Stites & Harbison PLLC

On August 14, 2019, the U.S. Court of Appeals for the Federal Circuit issued a revised opinion in Swagway, LLC v. ITC, Case No. 18-1672 (Fed. Cir. Aug. 14, 2019) that left open the possibility that decisions by the International Trade Commission (the "ITC") could have preclusive effect in federal district court cases involving trademarks.

By way of background, "issue preclusion" is a legal doctrine that prevents a party from relitigating an issue resolved by another tribunal. In order for one court's decision to preclude a party from relitigating that issue in another case, certain circumstances must be present. Generally, the identical issue must have been involved in the prior litigation, the issue must actually have been litigated with a full and fair opportunity to litigate the issue, and the issue must have been decided as part of the court's final judgment.

By way of further background, the ITC is a federal administrative body that, among other things, investigates and adjudicates intellectual property claims involving imported goods. Although the ITC does not award damages, intellectual property owners sometimes bring their intellectual property claims to this forum because the proceedings are swift and may result in the exclusion of infringing goods from entry into the country.

The Swagway case began when Segway filed a complaint with the ITC alleging (among other things) that Swagway's use of SWAGWAY and SWAGTRON violated Segway's rights in two federally registered marks for SEGWAY (in stylized and standard character forms). Segway asked the ITC to exclude Swagway's goods and prevent them from entering the United States. Shortly before the hearing in the matter, Swagway moved for partial termination of the proceedings on the basis of a consent order stipulation in which Swagway voluntarily agreed not to sell or import goods under the SWAGWAY mark. Segway opposed the motion because it would allow Swagway to relitigate the trademark issue in the future. The administrative law judge (the "ALJ") found that the use of SWAGWAY did infringe Segway's trademark rights (though the use of SWAGTRON did not), and denied Swagway's motion for a consent order. The Commission reviewed one of the ALJ's factual findings, but ultimately agreed with the ALJ on likelihood of confusion as well as infringement conclusions (and did not review the ALJ's denial of Swagway's motion).

Swagway appealed the denial of its motion as well as the finding that...

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