The Supreme Court Resolves the Role of the Jury in Trademark Tacking

The day after its ruling in Teva, the Supreme Court settled a split in the lower courts over whether the judge or the jury should make the determination of whether two trademarks may be "tacked" to extend the date of the first use further back in time. Oral argument in Hana Financial, Inc. v. Hana Bank[1] occurred on December 3, 2014, and on January 21, 2015, Justice Sotomayor delivered the unanimous decision of the Court. In the decision, the Court recognized the general rule adopted by lower courts that two marks may be tacked if they are legal equivalents, i.e., that they create the "same, continuing commercial impression so that consumers consider both the same mark." Resolving a split in the lower courts as to whether the judge or the jury were best suited to make the decision of legal equivalence, Justice Sotomayor wrote, "Application 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." Focusing on precedent outside the trademark context that the jury is generally the decision maker in questions of how an ordinary person or community would make an assessment, the Court held that the question of whether tacking is warranted must be decided by a jury when a jury trial has been requested if the question has not been decided by the judge on summary judgment or as a judgment of a matter of law. 

The Supreme Court Restores the Role of the District Court in Claim Construction

In a 7-2 decision, the Supreme Court held that not all determinations made during the process of claim construction are reviewed de novo upon appeal to the Federal Circuit. The decision is a result of a dispute between drug manufacturers over the definiteness of a claim term. The Supreme Court granted certiorari in March of 2014 in Teva Pharmaceuticals USA, Inc., v. Sandoz, Inc.[i] in order to consider the following question:

Whether a district court’s factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (as the panel explicitly did in this case), or only for clear error, as Rule 52(a) requires.

The Court left the holding of Markman[ii] unchanged and held that while the overall determination of a patent claim’s scope (i.e., claim construction) is a matter of law that is reviewed de novo (without deference) on appeal, the process of determining a claim’s construction may include the need to resolve subsidiary facts that are in dispute between the parties. The resolutions made by a district court with regard to these extrinsic subsidiary facts in dispute are factual findings, held by the Court, and are reviewed for clear error on appeal. Intrinsic evidence, such as the prosecution history of the patent, on the other hand, are legal determinations that will be reviewed de novo on appeal.

In this case, the respective experts of Teva and Sandoz disagreed as to the meaning of the term “molecular weight” in the patent at issue. The Supreme Court held that a district court’s resolution of a dispute between experts is a factual determination that is better resolved by a district court and should not be newly reviewed unless it is determined to be clearly erroneous on appeal. These determinations made at the district court level will become more difficult to reverse on appeal as a result. 

The claim construction hearing (or Markman Hearing) is a critical stage in any patent litigation. Given the deference to be paid to the determinations of a district court under the Supreme Court’s decision, the presentation of experts or other extrinsic subsidiary evidence becomes more critical at the district court level. This places more emphasis on being able to persuade a district judge, often without technical training or patent experience, of your view of the evidence.