Tacking your New Trademark onto the Old? Supremes: Ask a Jury

Resolving a circuit split, the Supreme Court in Hana Financial, Inc. v. Hana Bank, et al., 574 U. S. ____ (2015) on Wednesday unanimously affirmed a Ninth Circuit decision that the issue of “tacking” – where a trademark user modifies its mark over time while managing to retain its longstanding use and priority position over others (i.e., “tacking” a newer mark onto an older version) – is usually an issue appropriately tried to a jury.

In so holding, the Court validated a District Court jury decision that Respondent Hana Bank did not infringe Petitioner Hana Financial’s trademark (although Hana Financial appeared to have priority in the U.S. going back to 1995) in part because Hana Bank operated under a series of “Hana” names (including advertising as “Hana Overseas Korean Club”) going back to 1994 in the U.S., and had operated under the name Hana Bank in Korea going back to 1991.

The case has some interesting implications. The question of whether two similar trademarks owned by the same party can be tacked together to provide earlier priority has historically come down to whether the marks are “legal equivalents” conveying the same, continuous commercial impression in the community and in particular, the eyes of the ordinary consumer.

Citing to an 1874 case for the proposition that “twelve men know more of the common affairs of life than does one man,” the Court determined that consumers, not judges, are in the best position to make this determination.

In the opinion rendered by Justice Sotomayor (slip opinion available at: https://home.comcast.net/~jlw28129/HANA.pdf), concerns such as potential lack of uniformity of trademark jury decisions and the resulting inconsistency of the evolving trademark case law around the tacking issue were eschewed in favor of upholding the perspective of the ordinary purchaser, through which the tacking doctrine is said to operate.  However, the Court did reserve the tacking determination for judges in bench trials (where no jury is empaneled), and on motions for summary judgment and judgment as a matter of law.

The Court indicated that jury instructions will help guide the jury and ensure application of the correct legal standard.

Sometimes the wording of a jury instruction raises more questions than answers for the jury who must decipher the lingo. The jury instruction for “tacking” in this case was: “A party may claim priority in a mark based on the first use date of a similar but technically distinct mark where the previously used mark is the legal equivalent of the mark in question or indistinguishable therefrom such that consumers consider both as the same mark. This is called ‘tacking.’ The marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked.”

What does the decision mean for brand owners?  The clear takeaway is that nothing is certain as it relates to the doctrine of tacking, and whether a given jury will agree to find that the newer iteration of a trademark is tied to an older manifestation of the same mark.  In cases where a jury has been demanded, it will be much more difficult to quickly dispose of a case involving the tacking issue on a motion prior to trial.  This creates a landscape of increased unpredictability and expense in prosecuting or defending such cases, giving rise to a host of strategic considerations on the branding side, as well as, in pre-litigation.