Justice Sotomayor delivered the unanimous decision of the Supreme Court in Hana Financial, Inc. v. Hana Bank, et al, 574 U.S. __, No. 13-1211 (Jan. 21, 2015), holding that whether tacking is available to a trademark owner in a given case is question of fact that should be determined by a jury. The full opinion is available here.
Trademark rights are acquired by use of the mark in commerce. Priority is determined by first use–the first to use the mark has priority over later users. The doctrine of "tacking" is used in an effort to cloak a new mark in the priority date of an older mark. Tacking is available to a trademark owner in limited circumstances when the original mark and the newer, revised mark are "legal equivalents," meaning they create the same, continuing commercial impression. The question before the Court: Should a judge or jury determine whether tacking is available? "Because the tacking inquiry operates from the perspective of an ordinary purchaser or consumer, we hold that a jury should make this determination." Op. at 1.
Hana Financial sued Hana Bank in 2007 alleging infringement of its HANA FINANCIAL mark. In 1994, Hana Financial was establish as a California corporation and began using the name Hana Financial in commerce in 1995. In 1996, Hana Financial obtained a federal trademark registration for its HANA FINANCIAL and pyramid design trademark. Hana Bank invoked the tacking doctrine and argued that it had priority. Korea Investment Finance Corporation, a Korean entity using the name Hana Bank in Korea, established a service in the United States called Hana Overseas Korean Club in 1994. Its advertising included "Hana Overseas Korean Club" in both English and Korean as well as "Hana Bank" in Korean. In 2000, Hana Bank changed the name of Hana Overseas Korean Club to Hana World Center. In 2002 it began operating in the United States under the name Hana Bank. Hana Financial's infringement claim against Hana Bank was ultimately tried by a jury. The district court instructed the jury on the doctrine of tacking and the jury found in favor of Hana Bank. The Ninth Circuit Court of Appeals affirmed.
In its decision, the Supreme Court noted that the general rule is that tacking is available when the prior mark and the later mark are "legal equivalents," meaning they create the same, continuing commercial impression. Consumers consider both marks to be the same mark. The commercial impression conveyed by a mark is viewed through the eyes of a consumer. Justice Sotomayor wrote, "Application of a test that relies upon an ordinary consumer's understanding of the impression that a mark conveys falls comfortably within the ken of a jury," Op. at 4, and reminded that when the relevant question is how an ordinary person would make an assessment, the jury is generally the decisionmaker. Juries ought to provide fact-intensive answers.
The Court did note, however, that this ruling does not take the question out of the hands of the judge on a motion for summary judgment or for a judgment as a matter of law. A judge may decide whether tacking may be invoked if the facts so warrant. Moreover, of course the judge may make the determination if the parties have elected a bench trial.
The Court's decision, resolving the prior circuit split on the issue, is not particularly surprising. As Justice Sotomayor notes, when the inquiry is into the minds or impressions of ordinary persons, the question is typically sent to those persons, the jury. This is the case even in instances of mixed questions of law and fact. This ruling may make it easier for a trademark owner to invoke tacking–a jury may find "legal equivalents" where a judge relying on precedent previously would not. However, as the Court points out, if the concern is that a jury may improperly apply the relevant standard, "the solution is to craft careful jury instructions that make the standard clear." Opt. at 6.
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