The U.S. Supreme Court created some wake by issuing their first substantive trademark ruling in more than a decade this week. The Supreme Court decided to hear a case on appeal from the Ninth Circuit’s decision in Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013) cert granted, 134 S. Ct. 2842 (2014).
Of significant importance to the case is the trademark doctrine of tacking, which allows a trademark owner to make slight modifications of a trademark over time while maintaining the original first-use priority date. The doctrine holds that the original mark and the later, slightly altered, mark may be tacked when they are considered to be “legal equivalents” that “create the same, continuing commercial impression.” Van Dyne-Crotty, Inc. v. Wear-Guard Corp., 926 F.2d 1156, 1159 (Fed. Cir. 1991).
The issue addressed by the Supreme Court is whether a judge or a jury should determine whether tacking is available — that is, whether the original and revised marks are legal equivalents — in a given case.
What’s so tacky about Hana?
The respondent in the Supreme Court case, Hana Bank, was established in 1971 as “Korea Investment Finance Corporation” but adopted the name Hana Bank in 1991. In 1994, the respondent began expanding into the U.S. from Korea under the name Hana Overseas Korean Club. Hana Bank’s advertisements incorporated Hana Bank in Korean as well as the bank’s logo. Hana Bank officially began operating a bank in New York in 2002 under the name Hana Bank in English.
The petitioner in the Supreme Court case, Hana Financial, Inc., filed a trademark infringement suit against Hana Bank in 2007, claiming that Hana Bank is confusingly similar to Hana Financial. Hana Financial argued priority of rights based on their having used the Hana Financial trademark in the United States since 1995.
Rough seas for the plaintiff
Things did not go well for Hana Financial at trial because Hana Bank was able to establish priority of use based on the doctrine of tacking. The jury found that the original Hana Overseas Korean Club trademark in combination with the logo used as early as 1994 created the same commercial impression to consumers as the Hana Bank trademark in English introduced in 2002. The effect is that Hana Bank was able to obtain a first use date as early as 1994, one year before Hana Financial’s established first-use date of 1995.
Hana Financial appealed the trial court decision to the Ninth Circuit. Hana Financial argued that the court and not the jury should have decided whether Hana Bank had satisfied the tacking standard. Hana Financial found support for its argument based on other circuit courts of appeal which have held that tacking is a question of law to be decided by a court, not a question of fact to be decided by a jury. The Ninth Circuit did not agree with their colleagues nor Hana Financial, holding that tacking “requires a highly fact-sensitive inquiry generally reserved for the jury.” Unsatisfied with where they had landed, Hana Financial set course for an appeal to the Supreme Court.
Supreme Court makes waves
The Supreme Court decided to resolve the issue of whether a court or a jury should determine, for purposes of applying the doctrine of tacking, whether the original and revised marks are legal equivalents creating the same, continuing commercial impression. The Supreme Court opinion, issued Jan. 21, 2015, holds that the issue of tacking is a question of fact (or, at least, a question involving the “application-of-legal-standard-to-fact”) appropriately determined by a jury. The Court noted that the legal test is whether the two “tacked” marks are so similar that consumers “consider both as the same mark.” The tacking inquiry “involves a factual judgment about whether two marks give the same impression to consumers. Making that kind of judgment is, [as further discussed in the opinion], not ‘one of those things that judges often do’ better than jurors.”
The court waded carefully indicating that judges would still be able to rule on the issue of tacking during summary judgments or judgments as a matter of law, or to craft jury instructions to foster a higher understanding of the doctrine among the jury. When, however, a jury trial has been requested and the facts do not warrant summary judgment or judgment as a matter of law, this question must be decided by a jury.
This decision could have a significant effect on future trademark infringement litigation and could also be a precursor to the Supreme Court deciding to address an issue more central to trademark law: the current circuit split on the question of whether likelihood of confusion is an issue of fact to be decided by the jury or a question of law to be decided by a judge.