Hana Financial, Inc., v. Hana Bank et al., 2015 WL 248559 (January 21, 2015)
On January 21, 2015, in a unanimous decision, the Supreme Court issued its first trademark opinion in over a decade. The issue before the Court related to the doctrine of trademark tacking which permits trademark owners to retain an old first use date or “tack” the use of an older mark on to a new mark for purposes of determining trademark priority. Historically, trademark priority is determined under the theory, “first in time, first in right.” The tacking doctrine allows a trademark owner to make slight modifications to a mark without losing priority over its original mark. Specifically, the issue before the court was whether the jury or the court determines whether the first use date of an older mark may be tacked to a fist use date of slightly modified newer mark.
The case involved two financial institutions, Hana Financial and Hana Bank. Hana Financial, which began using the HANA FINANCIAL mark in commerce in the U.S. in 1995, sued Hana Bank for trademark infringement in 2007. The HANA BANK mark was first used in U.S. commerce in 2002, but Hana Bank argued that its previous use of the mark HANA OVERSEAS KOREAN CLUB, dating back to 1994, could be tacked onto its HANA BANK mark to give it priority of use over Hana Financial.
The case was tried to a jury at the district court, which returned a verdict in favor of Hana Bank. The district court denied Hana Financial’ s subsequent motion for judgment as a matter of law, and Hana Financial appealed. The U.S. Court of Appeals for the Ninth Circuit affirmed on appeal, holding that there was sufficient evidence to support the jury’s verdict on trademark priority. The appeals court held that tacking was a question of fact for the jury in the Ninth Circuit, while acknowledging that some other federal circuits treated tacking as a question of law.
In a decision delivered by Justice Sotomayor, the Court sided with Hana Bank, affirming the Ninth Circuit’s decision that tacking was a question of fact for the jury. According to the Court, “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.” The Court noted that a judge may still decide tacking questions in certain situations, such as on a motion for summary judgment or for judgment as a matter of law, or where the parties opt to try their case before the bench. However, the Court held that “when a jury is to be empanelled and when the facts warrant neither summary judgment nor judgment as a matter of law, [trademark] tacking is a question for the jury.”
Due to the fact that trials related to trademark “tacking” are rare, the Court’s decision pertains to an extremely narrow area of trademark law. However, the decision could have broader implications for other trademark issues that turn on ordinary consumer’s impression of a trademark, i.e likelihood of confusion. Currently, the U.S. Court of Appeals for the Federal Circuit has deemed the likelihood of confusion to be a question of law to be decided by the judge. Two other circuits, the Second and Sixth, have ruled that likelihood of confusion is a mixed question of fact and law. While the Court’s decision in Hana is certainly not a landmark trademark case, the Court’s decision ultimately provides an avenue for litigants to argue that questions related to consumers' impressions and understating of a trademark are generally best suited to go to the jury.