“Wow, that’s tacky” is a pronouncement nearly all of us have heard someone make about something at one time or another. It is a conclusion derived from personal interpretation of perceived facts, and, depending on those facts and their particular context, it may be more or less subjective and more or less a matter of individual taste. All punning intended, in a recent and rare unanimous decision, the Supreme Court ruled that determinations of “tacking” in the trademark context should be decided the same way: as matters of fact to be decided on a case-by-case basis by juries and not matters of law to be decided by judges. The case is Hana Financial, Inc. v. Hana Bank.
Trademark law recognizes that marks sometimes change over time, in accordance with their owners’ needs to stay in step with the market and with consumers’ tastes. The “tacking” doctrine provides that a new and updated version of a mark can be metaphorically “tacked on” to the older version of the mark and can claim, for priority purposes, the first-use-in-commerce date of the older version if the marks are determined to be legal equivalents because they create the same (and thus a continuing) commercial impression on consumers.
The tacking doctrine can be used as a defense to a claim of infringement, which is how it was used in the case before the Court. A Korean banking firm called Hana Financial sued Hana Bank for trademark infringement, but the federal district court dismissed Hana Financial’s claim when the court determined that Hana Bank had priority because it had the right to tack its mark onto an older trademark, Hana Overseas Korean Club, which Hana Bank had used before Hana Financial began using its name.
Hana Financial appealed the dismissal, first to the Ninth Circuit, which affirmed the district court, and then to the Supreme Court, which agreed to hear the case because it presented an opportunity to resolve a split between the Circuit courts over how tacking issues should be handled by federal courts. The question before the Court on appeal was this: who decides when tacking is proper, juries or judges? Another way of saying it, and the way it was discussed during the oral argument in the case, is should tacking issues be treated as matters of fact to be interpreted by juries or as matters of law to be determined by judges?
The oral argument was a difficult slog for petitioner Hana Financial, as might be surmised when one considers that the Court ultimately voted 9-0 against it. Justice Ginsburg pressured the petitioner early in the argument. When we consider the “magic words,” she said, the “same continuing commercial impression to consumers, then the one that’s better equipped to make that determination are people who are consumers, not jurists.” Justice Scalia reached the same conclusion, but for a humorous reason: throwing up his hands in trying to find consistent rulings in the body of precedent cases on tacking questions, he said “I’d much rather blame [the lack of consistency] on the jury than on the court” which raised enough laughter in the gallery for it to be mentioned parenthetically in the transcript.
When it was not fending off challenges from the Justices, Hana Financial did not help itself by making heavy weather of its arguments. At one point, in response to a fairly straightforward question from Chief Justice Roberts about why a properly instructed jury could not perform the continuing commercial impression analysis as well as a judge, Hana Financial said “Making the comparison to figure out just how much of a change has – has occurred in the marketplace and then, of that change, how close is that to the original mark such that could it have been known or foreseeable to the party who came in second on the scene that their mark would maybe later have been foreclosed from the marketplace[:] that’s the kind of complex determination that is not put to a jury.” Hearing the foregoing formulation, the Chief Justice might have wondered whether any person could make such a complex determination, let alone a judge.
Justice Sotomayor, writing for the Court, cut through all the analytical gymnastics that Hana Financial argued lay within the tacking analysis: “when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decision maker that ought to provide the fact-intensive answer.” For clarity, the Court emphasized that it was not holding that “a judge may never determine whether two marks may be tacked” because “if the facts warrant it, a judge may decide a tacking question on a motion for summary judgment or for judgment as a matter of law.” The holding was therefore narrow: “We hold only that, when a jury trial has been requested and when the facts do not warrant entry of summary judgment or judgment as a matter of law, the question whether tacking is warranted must be decided by a jury.” Thus the Court handed down an opinion that will be useful for attorneys in forming litigation strategies for future tacking cases.
Although the rule of the case is a narrow, it fits within the broadest purpose of trademark law. The policy foundation of the Lanham Act is consumer protection, and, accordingly, the way in which ordinary consumers view a mark in the marketplace is the most important consideration in determining whether a modified or updated version of a mark should be treated as the same mark or as a new mark. Therefore, the determination should be made by a jury, because, “what’s a jury?,” Justice Ginsberg asked rhetorically, and then she answered herself: “A jury is a collection of ordinary consumers.”