Today, January 21, the Supreme Court unanimously sided with the Ninth Circuit in holding that whether an original and a revised trademark are similar enough for tacking in determining priority is a fact-intensive question for juries to answer.
Held: Whether two trademarks may be tacked for purposes of determining priority is a question for the jury.
Case Facts: Respondent Hana Bank was originally established as "Korean Investment Financial Corporation." It subsequently changed its name to "Hana Bank" and in 1994 it advertised a service in the United States called "Hana Overseas Korean Club." The advertisement included the name "Hana Bank" in Korean. In 2000, Hana Bank again changed its name to "Hana World Center." In 2002, it began operating a bank in the United States under the name "Hana Bank." Petitioner Hana Financial Group began using its name in commerce in 1995 and obtained federal registration of the name "Hana Financial" for use in connection with financial services in 1996. Hana Financial sued Hana Bank in 2007 in the U.S. District Court for the Central District of California, alleging infringement of its "Hana Financial" mark. Hana Bank denied infringement by invoking the tacking doctrine and claiming it had priority to the mark. The district court originally granted summary judgment to Hana Bank on the infringement claim, but was reversed by the Ninth Circuit. On remand, a jury returned a verdict for Hana Bank. The Ninth Circuit affirmed.
Court Opinion (Sotomayor): The general rule adopted by the lower court is that two marks may be tacked when the original and the revised marks are "legal equivalents" that "create the same, continuing commercial impression" so that consumers "consider both as the same mark." The high court found that application of that rule relies upon an ordinary consumer's understanding of the impression that a mark conveys and falls comfortably within the "yen of the jury."
Sotomayor writes, "when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decisionmaker who ought to provide a fact-intensive answer," pointing out that this has been the long-recognized practice across a variety of contexts. However, a judge may still decide a tacking question when the facts warrant it on a motion for summary judgment or for judgment as a matter of law, or when the parties have opted for a bench trial.
Petitioner first argued that the "legal equivalents" test involves application of a legal standard and must be applied by a judge. The court disagreed, stating that applying the legal standard to fact creates a "mixed" question of law and fact, and "mixed" questions are commonly resolved by juries. Further, the concern that the jury will improperly apply the relevant legal standard can be resolved through careful jury instruction.
Second, petitioner argued that leaving tacking determinations to a jury will "create new law" guiding future disputes and that creating precedent is the job of judges. The court rejected this argument, finding that petitioner had not supported its contention that tacking cases must be resolved by reliance on precedence, and that even in cases cited by petitioner the court relied on precedent only to define the relevant legal standard.
Third, petitioner argued that the predictability of the trademark system will be compromised if tacking questions are assigned to juries. The court reiterated that some degree of uncertainty is standard in a variety of doctrinal contexts, and that this would be true regardless of whether a judge or jury acted as the fact-finder.
Finally, petitioner argued that historically judges have resolved tacking disputes. The court stated again that judges may resolve tacking disputes when there has not been a jury empaneled and when the facts do not warrant summary judgment or judgment as a matter of law.
In a footnote, Sotomayor mentions that the decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), in which the high court held that the task of construing patent claim terms falls to judges and not juries, is not inconsistent, since construing written documents is something "judges often do and are likely to do better than jurors unburdened by training in exegesis."