Sharp Kabushiki Kaisha (Also Trading as Sharp Corp.) v. Thinksharp, Inc.

Citation: Not availableDocket: 2005-1220

Court: Court of Appeals for the Federal Circuit; May 30, 2006; Federal Appellate Court

Original Court Document: View Document

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Sharp Kabushiki Kaisha (Sharp) appealed a decision from the United States Patent and Trademark Office's Trademark Trial and Appeal Board (TTAB), which dismissed Sharp's opposition to the registration of the mark THINKSHARP by ThinkSharp, Inc. (ThinkSharp). The appeal, decided on May 30, 2006, was argued by Duane M. Byers and others for Sharp, and Sherry H. Flax for ThinkSharp.

ThinkSharp applied for the THINKSHARP mark in 1999 for educational goods and services, and Sharp opposed both the word mark and a design mark. The TTAB granted a default judgment in favor of Sharp for the design mark, as ThinkSharp did not respond to that opposition. However, ThinkSharp contested Sharp’s opposition to the word mark. Sharp later claimed that the default judgment should prevent ThinkSharp from contesting the word mark based on res judicata, but the Board rejected this argument, stating that Sharp had waived the right to assert it because it did not raise the issue in a timely manner. 

On reconsideration, the Board acknowledged that Sharp's notice regarding res judicata had been misplaced but maintained that ThinkSharp was entitled to abandon one application while defending another. Ultimately, the Board affirmed that there was no likelihood of confusion between the SHARP and THINKSHARP marks.

Sharp challenges the decision regarding res judicata, asserting that it bars the registration of ThinkSharp's word mark. The determination of res judicata is a legal question subject to plenary review by courts, as outlined in the Administrative Procedure Act. Res judicata consists of claim preclusion and issue preclusion, with the former preventing litigation of claims not previously litigated and the latter barring relitigation of matters already decided. Sharp's opposition to the word-and-design mark was not litigated, making issue preclusion inapplicable.

For claim preclusion to be valid, three criteria must be met: identity of parties, a final judgment on the merits in the prior case, and the second claim must arise from the same transactional facts. Sharp argues that the default judgment in the word-and-design opposition implies a ruling in its favor on all allegations, which should affect the Board's decision regarding ThinkSharp's word mark. However, ThinkSharp contends that the Board correctly determined that the circumstances surrounding the word-and-design mark do not operate as res judicata for the word mark's registration.

Sharp's reliance on claim preclusion aims to bolster its opposition rather than to counter a claim from ThinkSharp. The Supreme Court has advised caution in the offensive use of res judicata to avoid unfairness to defendants. ThinkSharp counters by highlighting that the marks differ, the merits were not adjudicated, allegations in pleadings do not equate to proven facts, and that precedent supports their position, asserting that the Board adhered to trademark practice rules.

ThinkSharp was permitted to pursue the registration of only one of its marks instead of defending against two oppositions. The Board distinguished this case from Miller Brewing Co. v. Coy International Corp., noting that ThinkSharp did not file a second mark to evade a previous adverse judgment. Both THINKSHARP marks were in use simultaneously and pending at the time of the judgment in Opposition No. 91123480. The Board emphasized that the prior default judgment was entered without consideration of the merits, and precedent cautions against applying res judicata to claims not previously litigated. It highlighted the importance of due process and the interest of justice, especially when the prior action was dismissed on procedural grounds. Sharp failed to demonstrate the likelihood of confusion regarding the word mark should have been litigated in the prior defaulted opposition. The principles of preclusion aim to prevent the barring of potentially valid claims, and res judicata should not be applied here, as the marks differ and the relevant issues were not previously litigated. Thus, applying claim preclusion would not serve its intended purpose in this scenario.

A trademark owner has the right to select which opposition to defend, provided that their choice does not aim to avoid the consequences of a prior unfavorable judgment. Relevant case law supports this position, emphasizing that administrative bodies can create procedures that align with their statutory responsibilities. There is an allowance for flexibility to prevent preclusion, recognizing the unique substantive and procedural policies in agency adjudication. The PTO must exercise caution when applying preclusion. The Board's conclusion that ThinkSharp was not barred by a default judgment in a separate opposition when it chose to contest only the word mark opposition is upheld. ThinkSharp was not obligated to pursue both oppositions to maintain its right to litigate one. The Board's ruling that res judicata does not apply in this instance is affirmed.