In its first substantive trademark ruling in more than a decade, the U.S. Supreme Court unanimously held on January 21, in Hana Financial, Inc. v. Hana Bank et al., No. 13-1211, that tacking – which is whether two trademarks are sufficiently similar to allow the newer mark to use the priority date of the older mark – is a factual question for a jury to decide.
Respondent, a Korean firm established in 1971 as “Korea Investment Finance Corporation,” used an assortment of names since its inception. In 1991, Respondent changed its name to “Hana Bank.” In 1994, Respondent began using “Hana Overseas Korean Club” in English and Korean to advertise financial services in the United States. Respondent’s first physical presence in the United States began in 2002, with the operation of a bank under the name “Hana Bank.” Petitioner established itself as a California Corporation in 1994 using the name “Hana Financial.”
Petitioner sued Respondent in 2007, alleging infringement of its mark “Hana Financial.” Respondent denied the allegations of infringement and relied on the doctrine of tacking to claim that it had priority. Both the District Court and the U.S. Court of Appeals for the Ninth Circuit found that Hana Bank could tack the new name onto the earlier date of a different, but similar, mark to claim priority.
Federal circuits were split on whether tacking is a question of law that should be decided by a judge, or a question of fact that should be decided by a jury. In Hana Financial, the U.S. Supreme Court found that tacking is a mixed question of law and fact, but affirmed the District Court’s ruling that tacking “requires a highly fact-sensitive inquiry.” Hana Financial, Inc. v. Hana Bank et al., 735 F.3d 1158, 1160 (9th Cir. 2013) (quoting One Industries, LLC v. Jim O’Neal Distribution, Inc., 578 F.3d 1154, 1160 (9th Cir. 2009). Justice Sonya Sotomayor, writing the opinion, noted that the realm of fact-finding is historically fit for a jury to decide. Hana Financial gave the Supreme Court an opportunity to provide uniform guidance that “whether two marks may be tacked for the purpose of determining priority is a question for the jury.” Hana Financial, Inc. v. Hana Bank et al., No. 13-1211. With regard to the remaining question of law in tacking, the Court specifically left open the ability of judges to rule on judgments as a matter of law or summary judgments, and to guide a jury through precise jury instructions.
IMPACT OF DECISION
To date, tacking has been narrowly applied in trademark cases. However, now that the Supreme Court provided clear guidance for courts to allow juries to decide the issue of tacking, reliance on tacking may become more common. Nevertheless, it is unlikely that future litigation strategies will be affected regardless of whether tacking is decided by a judge or a jury.
Following Hana Financial, those who are considering suing for trademark infringement should investigate whether the other party owns trademarks on which it can tack prior use to gain priority over the potential plaintiff’s use of the mark. This decision should also be good news for trademark owners that would like to modify their trademarks and then tack back without risking the loss of priority in their marks.
Finally, as Justice Anthony Kennedy noted during oral arguments, other circuit splits over the role of the jury in the area or trademark law remain. Given Justice Sotomayor’s background in trademark law, more rulings on trademark law may occur sooner rather than later.