In the first substantial trademark case in over a decade, the Supreme Court unanimously decided that a jury can apply the tacking doctrine and decide whether two trademarks, used by a single party, convey the same commercial impression. Hana Financial, Inc. v. Hana Bank, 135 S. Ct. 907 (2015).
What Is Tacking? Normally, the first party to use a trademark in commerce owns the right to use that mark and stop others from using the mark. This first user is said to have “priority” in the mark over subsequent users. Trademark law also recognizes that trademark owners should be able to make some changes to their marks without having to restart the clock on their priority date. This doctrine is called tacking. With tacking, a party can “tack” the first-use date of its new modified mark back to the first-use date of the original mark. But tacking is not available for any two similar marks. The marks have to be “legal equivalents” that create the same, continuing commercial impression for consumers.
Why Should a Jury Decide Tacking? During oral argument, Justice Sotomayor best summarized the issue by asking: “How is the judge supposed to know what a consumer’s impression would be generally?… Just figure it out?” Similarly, Justice Scalia quipped: “I cannot for the life of me decide why the one [tacking example] should be permitted and the other should not be permitted…. And I’d much rather blame it on the jury than on the court.”
Swimming upstream, Hana Financial offered four counterarguments. First, it argued that assessing whether two marks are “legal equivalents” is a question of law and must be decided by a court. The Court rejected this argument since “the application-of-legal-standard-to-fact sort of question… , commonly called a ‘mixed question of law and fact,’ has typically been resolved by juries.” Citing United States v. Gaudin, 515 U. S. 506 (1995).
Next, Hana Financial argued that tacking determinations would create new law, which could only come from a court. The Court disagreed, finding no reason why a jury’s decision on tacking issues would “‘create new law’ any more than will a jury verdict in a tort case, a contract dispute, or a criminal proceeding.” The Court similarly rejected Hana Financial’s argument that allowing a jury to decide tacking would create unpredictability in trademark cases. The Court again found nothing special about trademark cases that were different than other types of cases in which a jury routinely decides factual questions. No matter who decides the issue, a judge or a jury, there is “some degree of uncertainty, particularly when they have to do with how reasonable persons would behave.”
Finally, the Court rejected Hana Financial’s argument that tacking was historically decided by judges, noting that all of the cases Hana Financial cited were after summary judgment motions or bench trials. The Court did not disagree that a judge can decide tacking in those circumstances where there is no factual dispute, but a judge does not have to make the determination.
At its core, the Court based its rejection of Hana Financial’s arguments on the underlying ability and importance of the jury. As Justice Sotomayor explained, “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 decisionmaker that ought to provide the fact-intensive answer.”
Takeaways. Standing alone, the Court’s decision in Hana Financial is not a dramatic shift in the tacking landscape since many courts already allowed a jury to decide the tacking question. But if you are considering making a change to your mark, you should reach out to your trademark counsel to evaluate whether tacking may apply in your situation.