This past January, the Supreme Court of the United States held that the decision regarding whether two trademarks are similar enough to be “tacked” is a factual question that should be decided by a jury. In essence, the Court held that juries should decide whether a “new” or updated trademark is similar enough to an older version of that same mark to permit trademark owners to rely on the earlier priority date of the older mark. Tacking, or the ability to establish an earlier priority date, is important in U.S. trademark law because trademark rights are determined by the date of first use.1 Generally, the first person to use a particular trademark establishes rights and priority in that mark, and can then exclude others from using the same or confusingly similar marks in connection with the same or related goods/services. The ability of a trademark applicant to claim an earlier trademark priority date for a newer, updated trademark therefore has important consequences.
As the Court in Hana Financial, Inc. v. Hana Bank explained, a newer version of a mark may maintain the priority position of the older mark when the two marks are “legal equivalents in that they create the same, continuing commercial impression.”2 This is important because generally the party who first uses a mark in commerce has priority over other subsequent users, and this can impact the outcome of trademark infringement claims. The Court went on to explain that “[t]he commercial impression that a mark conveys must be viewed through the eyes of a consumer”, and “[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.”3 The Court then emphasized the long recognized principle that, when the relevant question is how an ordinary person would make a determination, the jury is the decision-maker to provide the answer.4 The Court made clear that “because the tacking inquiry operates from the perspective of an ordinary purchaser or consumer, we hold that a jury should make this determination.”5
That said, the Court did note that under certain circumstances a judge may determine the tacking issue, such as on a motion for summary judgment or motion for judgment as a matter of law, or when the parties have opted to try their case without a jury. However, the Court advised that “when a jury trial has been requested and the facts do not warrant entry of summary judgment or judgment as a matter of law, the question whether tacking is warranted must be decided by a jury.”6
Notably, the Court rejected each of Petitioner’s arguments in favor of considering tacking a question of law for a judge to decide. The Court first recognized that, even though the legal equivalents test is a legal standard, “the application-of-legal-standard-to-fact sort of question”, i.e. “[a] mixed question of law and fact, has typically been resolved by juries” and the “mixed” tacking analysis is no different.7 In addition, the Court rejected Petitioner’s claim that tacking decisions would create new law that will guide future tacking disputes - a task reserved for judges - because Petitioner offered no support for its claim that courts in tacking cases must consider precedent.8 What’s more, the Court noted that this would not create “new law any more than will a jury verdict in a tort case, a contract dispute, or a criminal proceeding.”9 The Petitioner also argued that assigning tacking determinations to a jury would create unpredictability in the trademark system, but the Court found this unpersuasive, noting that this type of unpredictability occurs in various other systems such as tort, contract, and criminal law.10 Finally, the Court highlighted the fact that the cases relied upon by Petitioner to show that judges have previously resolved tacking disputes were those in which the judge was resolving these disputes in bench trials, on summary judgment, and in similar circumstances.11
While the Supreme Court does not often rule on trademark issues, and practitioners pay close attention when it does, the Court in Hana Financial, Inc.decided a very narrow issue - whether a judge or jury should determine if two marks have the “same, continuing commercial compression”, and therefore whether tacking is available in a trademark case. Considering how rarely the issue of tacking arises in trademark litigations, the decision in Hana Financial, Inc., although resolving a split amongst the Circuit Courts of Appeal, will not dramatically impact trademark practitioners or the standard for tacking. However, what will impact practitioners is the possibility that the decision may reveal how the Court would approach the likelihood of confusion analysis in trademark cases, where there is also a circuit split as to whether that ultimate determination is a question of law, reviewable de novo, or fact, reviewable for clear error. Indeed, the Justices hinted at this during oral arguments, with Justice Kennedy asking “when we write this opinion, will we have to have in the back of our minds what effect it will have on likelihood of confusion[?]”12 The stage has been set, and it would be prudent to watch how trademark litigants rely on Hana Financial, Inc. going forward in jurisdictions treating likelihood of confusion as a question of law.