Trademark Law Alert -- Decanted, Not Decided: Second Circuit Holds That TTAB Likelihood-of-Confusion Ruling Was Not Binding in Wine Trademark Litigation
The U.S. Supreme Court’s decision in B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. 138 (2015) established that a likelihood-of-confusion determination by the USPTO’s Trademark Trial and Appeal Board (TTAB) may, in appropriate cases, prevent a party from relitigating that issue in subsequent litigation. Specifically, the Court determined that issue preclusion applies only when the ordinary elements of preclusion are satisfied and “the usages adjudicated by the TTAB are materially the same as those before” the district court. We reported on that decision in a prior Client Alert “The Supreme Court Decides That Some Trademark Office Tribunal Decisions Are Binding In Later Court Cases.”
The U.S. Court of Appeals for the Second Circuit’s summary order in Peju Province Winery L.P. v. Cesari S.R.L., No. 24-1903 (2d Cir. June 8, 2026) (summary order), illustrates the practical importance of the B&B Hardware limitation. In a dispute between Italian and California wine producers, the Second Circuit reversed a decision of the U.S. District Court for the Southern District of New York after concluding that the TTAB did not take into account the same material factors that were before the District Court.
Background
Cesari S.R.L., an Italian winemaker and owner of the trademark LIANO for wine successfully opposed an application to register the LIANA trademark for wine by Peju Province Winery L.P., a California winemaker. The TTAB found a likelihood of confusion based solely on the identification of the goods set forth in the registration and application and the similarity of the marks. It did not consider the particular nature of the goods, channels of trade, and classes of purchasers in the marketplace.
More than a decade later, Cesari sued Peju for trademark infringement in the U.S. District Court for the Southern District of New York. Peju argued that consumers were not likely to be confused as to the source in the marketplace because its LIANA wine was (1) a dessert wine, (2) sold only in Peju’s own wineries and websites, and (3) made only from grapes grown in California, not Italy.
Cesari moved for summary judgment on the ground that Peju was precluded from relitigating the issue of likelihood of confusion that had been decided by the TTAB. The District Court granted Cesari’s motion because the TTAB had broadly concluded that parties’ marks differed by only one letter and their identified goods were identical. Peju therefore appealed the decision to the Second Circuit Court of Appeals.
Second Circuit Decision
The Second Circuit reversed the District Court’s decision because the TTAB’s likelihood-of-confusion analysis was limited to the application and registration as written, whereas the infringement action turned on how the parties actually used their marks in the marketplace.
The Second Circuit recognized that it was appropriate for the TTAB to limit its likelihood-of-confusion analysis to the four corners of Peju’s application and Cesari’s registered mark, presumably because the TTAB generally evaluates likelihood of confusion based on the goods and/or services identified in the application and registration, not the parties’ actual marketplace uses. However, it concluded that “because the issues before the TTAB and the district court were not the same, the district court should not have given preclusive effect to the TTAB’s ruling on the likelihood of confusion.”
Citing B&B Hardware, the Second Circuit emphasized that “where ‘the TTAB d[id] not consider the marketplace usage of the parties’ marks, the TTAB’s decision should have no later preclusive effect in a suit where the actual usage in the marketplace is the paramount issue’” (citations omitted). The Second Circuit reversed and remanded the case to the District Court for further proceedings.
Author’s Note:
This decision illustrates that:
- B&B Hardware did not establish a blanket rule that TTAB determinations automatically bind district courts in subsequent proceedings.
- A TTAB finding of likelihood of confusion may not resolve that issue in a later infringement action when the Board did not consider marketplace factors such as the parties' actual products, trade channels, consumers, pricing, labeling, and sales context.
- Trademark owners should consider, at the outset of a TTAB proceeding, whether marketplace-use evidence may become important in future infringement litigation and how the TTAB record could affect later issue-preclusion arguments.
For further information, please contact Joel Karni Schmidt or your CLL attorney.
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Joel is a member of our firm’s Executive Committee. For more than 25 years, he has advised clients on intellectual property counseling, protection, licensing, and enforcement. Joel regularly assists companies with trademark, copyright, new media, right of publicity, and transactional matters, and has extensive experience managing worldwide trademark and copyright portfolios, litigations and proceedings, negotiating co‑branding agreements and licenses, and resolving complex cross-border IP disputes.