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

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.

Jean Alexander opposed the cancellation on two grounds: 1) that it had priority over the modernized version of L'Oreal's mark, and 2) that there was no likelihood of confusion between its mark and either the original or modernized version of the L'Oreal mark. The TTAB agreed with both arguments, first determining that the two L'Oreal marks were not 'legal equivalents' and that therefore L'Oreal was not entitled to claim 1988 as the date of first use of the modernized version of its mark. The TTAB then determined that there was no likelihood of confusion between the Jean Alexander's mark and either version of L'Oreal's mark. Though the TTAB's finding regarding the likelihood of confusion as to the modernized version of L'Oreal's mark was superfluous in light of its determination of priority, it was expressly made 'for the sake of completeness' and 'in case upon further review, it is determined that [L'Oreal's] original and modernized marks are legal equivalents.' Id. at 246. Neither party appealed this decision.