A unanimous Supreme Court ruled on January 21, 2015, that the question of whether the doctrine of trademark tacking applies is factual and generally decided by the fact-finder—and in most cases, the jury. “Tacking” allows a trademark owner to slightly modify the mark over time, yet still claim the original priority date of the non-modified mark. Major modifications to a mark, however, are excluded from the tacking doctrine. Prior to the Court’s decision, the question of whether tacking should be decided by a judge or jury was the subject of a circuit court split. With this ruling, the Supreme Court has given juries the responsibility for determining the extent to which a mark has been modified.
In Hana Financial, Inc. v. Hana Bank, Hana Financial sued Hana Bank for trademark infringement of its mark “Hana Financial.” Hana Bank used the mark “Hana Bank” in a Korean newspaper to advertise banking services. Hanna Financial argued that the use of that mark was similar enough to “Hana Financial” to cause customer confusion.
Hana Bank invoked the tacking doctrine as a defense. It argued that its new mark “Hana Bank” was so similar to its old mark (a Korean character that translates to Hana Bank) that it had priority of use over Hana Financial. In doing so, Hana Bank noted that its services were marketed almost exclusively to Korean readers in a Korean newspaper, and as such the English translation of “Hana Bank” was a slight modification on the Korean character meaning Hana Bank. The jury agreed. Hana Financial then appealed the lower court’s decision on allowing the jury to resolve the tacking defense. The Court of Appeals for the Ninth Circuit affirmed the district court, finding that tacking was a “fact-sensitive inquiry” to be decided by the jury.
The Supreme Court agreed with the district court and noted that the tacking inquiry asks whether two marks are legally equivalent in that the two marks create the same, continuing impression. “Application of [the] test . . . relies upon an ordinary consumer’s understanding of the impression that a mark conveys . . . .” Accordingly, the opinion recognized that juries are traditionally the best-equipped party to resolve how an ordinary person or community would make such assessments.
The Court dismissed each of Hana Financial’s four arguments as unpersuasive. First, the Court noted that Hana Financial’s concerns regarding the implications of the tacking test involving a mixed question of law and fact were misplaced as these questions are often decided by juries. As to Hana Financial’s argument that allowing juries to decide the issue of tacking is tantamount to letting juries set legal precedent, the Court disagreed. Instead, the Court found no reason why jury decisions on tacking necessarily had any greater precedential value.
The Court was equally unmoved by Hana Financial’s arguments that the predictability of the legal system would be harmed if juries decide tacking. Dismissing the argument, the Court noted that allowing juries to decide cases of tacking is no different than analogous cases involving torts, contracts, or criminal justice issues.
Finally, the Court noted that there is no tradition reserving the issue of tacking to the province of Judges. The Court pointed out that all of the case law relied upon by Hana Financial related to bench trials, summary judgment motions, or the like. As this ruling does not affect these proceedings, the argument was not persuasive.
Authored by Chris Stanton and Paige Stradley