The U.S. Supreme Court heard arguments on Tuesday, December 2, 2014, in Hana Financial, Inc. v. Hana Bank (Docket No. 13-1211), pertaining to the doctrine of trademark tacking.  Tacking allows a company to create a revised, or slightly modified, mark while maintaining the priority date of its original mark.  What this means is that the original trademark owner can stop an intervening user from using its mark if the intervening mark would confuse consumers when compared to either the original mark or the revised mark.

The suit before the high court involves Hana Financial suing similar-sounding Hana Bank for trademark infringement.  Hana Financial appealed a jury’s finding that Hana Bank could tack the new name onto an older different name it had used years before Hana Financial was started, arguing that trademark tacking is a question of law and should not have been decided by a jury.  All agree that the appropriate legal test for trademark tacking is whether the original and revised mark create the “same continuing commercial impression” to consumers.  However, the tricky question facing the justices is whether this determination is a factual question that can be decided by juries or purely a legal one that should be decided by judges.

Some highlights of the argument that shed light on the likely outcome include:

  • Hana Financial tried to make the point that juries, like the one that dismissed its case against Hana Bank, are “not equipped” to handle a complex question that goes beyond a mere comparison of the two marks.  Chief Justice Roberts did not seem to buy this argument asking “What is it that you think a jury could not be instructed on in addressing this consideration.”
  • Hana Financial compared the tacking determination to claim construction in patent law, which the Supreme Court has ruled is a purely legal question.  Justice Ginsberg seemed to note that entrusting the construction of patent terms solely to the judge is a lot different from doing so with trademark tacking where there is a question that is almost entirely in the perception of consumers alone.  To this point, she pointedly stated “To determine whether there is the . . .  ‘same continuing commercial impression’ to consumers, . . . the one that’s better equipped to make that determination are people who are consumers, not jurists.”
  • An argument that judicially-made decisions result in more consistent case law was a key part of Hana Financial’s claim, but Justice Antonin Scalia was not too receptive to the idea.  Flipping through examples of judge-issued rulings on tacking, he expressed uncertainty as to its consistency, “I cannot for the life of me decide why . . . [tacking in one case] should be permitted and the other should not be permitted.” “And I’d much rather blame it on the jury than the court.”

The high court also expressed concern regarding how their eventual decision may impact the “likelihood of confusion analysis” in trademark actions, which is of far greater significance than the issue of tacking.  There is a split in the circuits as to whether determining “likelihood of confusion” presents a question of law or fact.  A finding that tacking is solely a question of law, or vice versa, could very well impact and provide uncertainty as to whether the same is true for “likelihood of confusion.”  While oral argument in Hana seems to indicate which way the opinion will go, it should be interesting to see what level of precision the Supreme Court uses to differentiate these critical trademark issues.