Trademark Tacking: Supreme Court GuidanceJanuary 23, 2015
On January 21, 2015, the U.S. Supreme Court issued its first trademark decision in over a decade. In Hana Financial, Inc. v. Hana Bank, 574 U.S. — (Jan. 21, 2015), the Court examined the trademark doctrine of "tacking" – a doctrine that can have profound effects on trademark priority.
In the United States, a party's rights in a trademark are established when that party first uses the mark in commerce; the party that first uses the mark has priority over, and thus rights superior to, subsequent users of the mark. The doctrine of tacking allows a user to "clothe a new mark with the priority position of an older mark" when the new mark and older mark "create the same, continuing commercial impression" in the minds of consumers.
Hana Financial involved a dispute over the priority of certain marks that incorporated the term "Hana." In 1994, a Korean entity, Hana Bank, began advertising its financial services using the name "Hana Overseas Korean Club." In 2002, Hana Bank began operating a bank in the United States under the name "Hana Bank." In the interim, a California entity, Hana Financial, began using the mark "Hana Financial" in 1995 and obtained a federal registration for its mark for use in connection with financial services in 1996. In 2007, Hana Financial, relying on its federal registration, sued Hana Bank for trademark infringement. Hana Bank denied infringement by invoking the tacking doctrine and claiming priority.
In the District Court, the infringement claim was tried before a jury, and the jury returned a verdict in favor of Hana Bank (presumably finding Hana Bank's use of "Hana Bank" tacked on to its earlier use of "Hana Overseas Korean Club"). The Ninth Circuit affirmed the use of tacking by the jury. The Supreme Court granted certiorari on whether tacking is an issue of fact that should be resolved by a jury.
The Supreme Court unanimously held 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." The Court rejected Hana Financial's arguments that such a holding would lead to inconsistent precedent and unpredictable results in the trademark context. In so holding, the Supreme Court resolved a circuit split that has persisted for the last few decades.
The implications of this decision could be significant. Although the Supreme Court went to great lengths to limit the scope of its decision, the decision might ultimately increase the costs of trademark litigation by placing the tacking issue within the purview of the jury, while making it easier for a party to assert the tacking doctrine as a defense to infringement. Individuals or businesses facing issues of trademark infringement should consult with an experienced attorney to discuss how best to navigate the complex factual issues involved in the establishment of priority.
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