The U.S. Supreme Court on Wednesday unanimously decreed that the jury, not the judge, should decide whether two trademarks used by a brand owner may be tacked (considered to impart the same impression) in a priority dispute. This is the first substantive trademark case reviewed by the Court in a decade, but will the decision immediately and substantially impact trademark practice? Probably not. Yet, the Justices’ position could open the door to more trademark cases going to trial over not only issues of priority, but also of likelihood of confusion and other questions of consumer perception.
Hana Financial (“Petitioner”) sued Hana Bank (“Respondent”) in 2007, alleging trademark infringement of the Hana Financial mark. Although Petitioner had technically used Hana Financial in commerce before Respondent adopted the Hana Bank mark, the jury found that Respondent had priority based on Respondent’s prior use of the name Hana Overseas Korean Club. The jury found this to be a distinct mark that nonetheless created the same, continuing impression in the minds of consumers as Hana Bank. This doctrine, referred to as tacking, allows a brand owner to tweak a trademark over time while maintaining its first use date. A circuit split had developed as to whether tacking is a question of law for the judge, or a question of fact for the jury.
Petitioner appealed to the Ninth Circuit, arguing that tacking is a question of law to be answered only by the judge. The Ninth Circuit disagreed and affirmed the jury’s decision. The Supreme Court then granted a writ of certiorari to resolve the split amongst different circuit courts on the tacking issue.
The Court’s Decision
In a concise opinion by Justice Sonia Sotomayor, the Court held that whether tacking is warranted is a question of fact for the jury to decide. Hana Fin., Inc. v. Hana Bank, 574 U.S. ____, No. 13–1211 (2015). The Court focused on the tacking doctrine’s fact-intensive standard in arriving at its holding. The standard asks whether the two marks create the same, continuing impression from the consumer’s perspective such that the consumer considers them to be the same mark. Such an answer “relies upon an ordinary consumer’s understanding of the impression that a mark conveys” and thus “falls comfortably within the ken of a jury,” held the Court.
Nevertheless, the decision confirmed that district court judges may still determine whether to tack two marks on motions for summary judgment and during bench trials.
In cases involving at least one party that has modified its mark over time, potentially impacting which party would be deemed to have earlier rights, the parties should be mindful when deciding whether to request a jury trial, as well as when choosing the type and form of evidence used to prove tacking.
The Hana decision does not address a separate circuit split on who should decide the likelihood of confusion inquiry. While most circuits deem the jury to be the appropriate decision maker on the issue, the Federal Circuit – which reviews U.S. Patent and Trademark Office (USPTO) and Trademark Trial and Appeal Board (TTAB) decisions – is a notable outlier, considering the issue to be one purely for the bench. The Second and Sixth Circuits also consider likelihood of confusion to be, at least partly, an issue of law for the bench. Yet, like tacking, likelihood of confusion concerns a fact-intensive standard, considered from the consumer’s perspective. After Hana, courts may be more likely to decide that juries should make the likelihood of confusion determination, as well as other issues relating to consumer perception, including distinctiveness and secondary meaning determinations, and thus be less prone to deciding trademark claims at summary judgment.