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When Winning Might Also Be Losing: The Preclusive Effects of Defending a Trademark Application or Registration

By Albert L. Sieber

Last summer, the Third Circuit Court of Appeals in Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244 (3rd Cir. 2006), joined a majority of the courts of appeal in holding that it would give full preclusive effect to any of the alternative holdings of a prior adjudication. In so doing, the court further highlighted the necessity of thinking both offensively and defensively at the earliest stages of a trademark dispute, including during proceedings before the Trademark Trial and Appeals Board ('TTAB').

In Jean Alexander, the Third Circuit was asked to determine the extent to which Jean Alexander Cosmetics, Inc. ('Jean Alexander') was precluded under the doctrine of collateral estoppel (issue preclusion) from arguing infringement of one of its marks by L'Oreal USA, Inc. and its predecessor ('L'Oreal'). L'Oreal had previously sought to cancel Jean Alexander's 1993 registration in its EQ SYSTEM mark and design, first used in 1990, arguing that this mark was confusingly similar to its SHADES EQ mark and design, first used in 1988, and a modernized version of this mark that L'Oreal began using in 1992.

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