January 29, 2015

The Supreme Court Tackles Trademark Tacking in Hana Financial, Inc. v. Hana Bank

Arnold & Porter Advisory

On January 21, 2015, the Supreme Court unanimously affirmed the Ninth Circuit's decision that trademark tacking for purposes of determining trademark priority is a question for the jury.  Hana Financial, Inc. v. Hana Bank, 574 U.S. ____ (2015).

The doctrine of "tacking," though rarely invoked, allows a trademark owner to make certain modifications to its trademark, while still retaining the benefit of the original trademark's priority date.  For tacking to apply, the revised trademark must be the "legal equivalent" of its predecessor, meaning that the two marks must "create the same, continuing commercial impression" to the ordinary consumer.

Prior to the Supreme Court's opinion in Hana Financial, a circuit split existed on the issue of trademark tacking.  The Federal and Sixth Circuits held that trademark tacking is a question of law for the judge.  The Ninth Circuit, however, had ruled in Hana Financial, Inc. v. Hana Bank that trademark tacking is a question of fact for the jury.

Respondent Hana Bank began using its name in Korea in 1991.  In 1994, Hana Bank advertised a service called Hana Overseas Korean Club in the United States and included the name "Hana Bank" in Korean on its advertisements.  In 2000, Hana Overseas Korean Club changed its name to Hana World Center, and in 2002, respondent began operating a bank called Hana Bank in the United States.  Petitioner Hana Financial was established in 1994, began using the name in commerce in 1995, and obtained a federal trademark registration that included the name "Hana Financial" in 1996.  In 2007, Hana Financial sued Hana Bank, claiming trademark infringement.  Hana Bank invoked the doctrine of trademark tacking as an affirmative defense, and the jury returned a verdict in favor of Hana Bank.  The Ninth Circuit affirmed, holding that trademark tacking for the purposes of determining priority is a question for the jury.

In an eight-page opinion written by Justice Sotomayor, the Supreme Court held that "[a]pplication 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."  The court was not persuaded by Hana Financial's arguments -- including the arguments that juries may reach "unpredictable" conclusions or that cases having tacking cases "have to be" resolved by looking to precedent --reasoning that "we have long recognized across a variety of doctrinal contexts that, when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decision maker that ought to provide the fact-intensive answer." 

The Supreme Court's holding in this case explicitly leaves room for judges to decide the question of tacking in certain instances, such as when a jury trial has not been requested or where no genuine issues of material fact precluded resolution of the issue at the summary judgment stage.


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