IP Law Daily, TRADEMARK—2d Cir.: Board likelihood of confusion determination not given preclusive effect in subsequent lawsuit, (Jun 9, 2026)

By Robert Margolis, J.D.

Board did not consider the particular nature of the defendant’s wine or marketplace usages of the parties’ wine products, therefore collateral estoppel was inappropriate when those factors were at issue in the subsequent infringement suit

The Second Circuit Court of Appeals in New York has vacated a judgment awarded to Cesari S.R.L. in its trademark infringement suit against Peju Province Winery L.P., holding that the district court should not have given preclusive effect to a Trademark Trial and Appeal Board determination that Peju’s LIANA mark for dessert wines was likely to be confused with Cesari’s LIANO mark for wines. The district court’s determination that Peju was collaterally estopped from relitigating likelihood of confusion due to the Board’s holding was reversible error, the appellate court found, because the Board conducted its analysis based exclusively on how Peju identified its goods in its trademark application, without considering the nature of Peju’s goods, the marketplace usages of the parties’ respective products, or other factors relating to the “context” of trade for the products. Because Peju’s defense to Cesari’s infringement suit rested in large part on those trade factors, the Board’s determination could not have preclusive effect, the appellate court held in a Summary Order (which does not have precedential effect but may be cited consistent with Federal Rule of Appellate Procedure 32.1). The appellate court vacated a judgment entered in the district court and remanded for further proceedings (Peju Province Winery L.P. v. Cesari S.R.L., No. 24-1903 (2d Cir. Jun. 8, 2026)).

Board proceedings. Cesari, an Italian winemaker, has sold wine globally under the name “Liano” since 1989. In 2003, it obtained a U.S. trademark registration for LIANO for the sale of wine in International Class 33. Peju, a California winemaker, subsequently sought to register the trademark LIANA with the USPTO in connection with the sale of wines. Cesari filed an opposition to Peju’s application, based on likelihood of confusion, which led to a Board proceeding. In determining that Peju’s LIANA mark was likely to cause confusion with Cesari’s LIANO mark, the Board conducted its analysis exclusively on Peju’s identification of goods, without considering what Peju calls the “marketplace usages” of the parties’ respective products.

In particular, Peju notes that its wines’ trade channels “are limited to its own wineries and websites” so Cesari’s trade channels do not overlap with Peju’s. Peju also asserted it only offers wines made from California grapes, while Cesari’s LIANO wines are made from grapes grown in a well-known region in Italy, a difference that matters for consumers of fine wines. Finally, Peju asserted as its principal marketplace distinction that its wine is a dessert wine, thus serving a different market of consumers. Peju raised all these issues in defense to Cesari’s subsequent federal lawsuit. The district court, however, granted summary judgment to Cesari, holding that the Board’s likelihood of confusion determination was preclusive such that Peju was collaterally estopped from litigating that issue. After the district court held a subsequent bench trial on the remaining elements of Cesari’s claim and its request for damages, leading to a judgment for Cesari, Peju appealed. Peju argued that the district court’s giving preclusive effect to the Board’s findings concerning likelihood of confusion was reversible error. The appellate court agreed.

Marketplace context. In the Second Circuit, a Board determination of likelihood of confusion will have preclusive effect for purposes of a subsequent Lanham Act infringement claim only if the Board’s decision considered “in a meaningful way, the context of the marketplace.” Levy v. Kosher Overseers Ass’n of Am., 104 F.3d 38, 42 (2d Cir. 1997). As the appellate court explained, where the Board compares conflicting marks in their entire marketplace context, the factual basis and issues raised as to the likelihood of confusion determination are the same as in a Lanham Act lawsuit such that collateral estoppel would be appropriate. The appellate court noted that “such occasions are the exception, not the norm” in Board trademark registration rulings.

In this instance, the Board expressly did not consider the parties’ marketplace usages, stating that its likelihood-of-confusion inquiry was limited to the four corners of Peju’s application and Cesari’s registered mark as pleaded, and that its ultimate decision was reached “regardless of what the record may reveal as to the particular nature of [Peju’s] goods.” Cesari S.R.L. v. Peju Province, No. 91158374, 2004 WL 1703103, at *2 (T.T.A.B. July 20, 2004). It did not consider the issues mentioned above—that Peju’s product is a dessert wine, that the parties’ channels of trade do not overlap, and the significance to consumers that Peju’s wine is made from California grapes and Cesari’s from Italian grapes—since those facts were not included in Peju’s application for registration. That the Board did not consider facts outside Peju’s application and Cesari’s pleaded registration was justified, the appellate court noted, but rendered the inquiry in the Board proceedings sufficiently different from that in Cesari’s subsequent infringement suit for collateral estoppel to be inappropriate.

The appellate court found meritless Cesari’s argument that a more recent Supreme Court decision, B&B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138 (2015), rejected the Second Circuit’s Levy analysis. While B&B Hardware held that a Board decision will have preclusive effect in a subsequent trademark infringement lawsuit if the Board looked to the same likelihood-of-confusion standard as the district court, even if not all of the factors are the same, it also expressly concluded that where the Board did not “consider the marketplace usage of the parties’ marks, the [Board’s] decision should have no later preclusive effect in a suit where actual usage in the marketplace is the paramount issue.” Id. at 156-57. The appellate court thus found B&B Hardware consistent with Levy, and supported vacating the district court’s judgment.

The Case is No. 24-1903.

Judge: Wesley, R.

Attorneys: Valeria Calafiore Healy (Healy LLC) for Cesari S.R.L. Brian Block (Mandelbaum Barrett PC) for PEJU Province Winery L.P.

Companies: Cesari S.R.L.; PEJU Province Winery LP

MainStory: TopStory Trademark ConnecticutNews NewYorkNews VermontNews GCNNews