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IP Alert: Who’s Number One? Supreme Court Says Jury Must Decide Trademark Tacking Issue

January 21, 2015

Today, in Hana Financial, Inc. v. Hana Bank et al., the U.S. Supreme Court held that the issue of trademark tacking is an issue of fact to be decided by a jury in cases when a jury has been requested, a decision of some import to the practice of trademark law.

Specifically, tacking is a matter of significance relating to the issue of priority of trademark rights in trademark cases. Generally, the first to use a trademark is entitled to the right of priority over those entities that later adopt confusingly similar trademarks. It is not uncommon that over the course of time trademarks are modified and brought up to date with a more contemporary appearance. This raises an issue of priority as to whether the owner of the modified trademark is entitled to rely on the older date of use for the purpose of priority. 

Today’s case involved two entities that each claimed rights in the mark “Hana,” the English spelling of a Korean word that means “number one,” “first,” “top,” or “unity.” California-based corporation Hana Financial, the plaintiff in the underlying lawsuit and the petitioner before the Court, began using the name and associated mark “Hana Financial” for financial services in 1995. Hana Bank, the respondent, did not begin operating a bank in the U.S. using the name “Hana Bank” until 2002, seven years after the 1995 date of Hana Financial’s first use in commerce. However, Hana Bank had used the term “Hana Bank” in Korean in its advertising of financial services since 1994. 

Hana Financial sued Hana Bank for infringement. In defense, Hana Bank asserted that it was entitled to tacking of the rights to “Hana Bank” from its 1994 use of the term in its advertising. A jury in the District Court for the Central District of California agreed with the defense, and entered a verdict in favor of Hana Bank on its tacking claim. The district court entered judgment accordingly, and the Court of Appeals for the Ninth Circuit affirmed. Hana Financial sought and obtained a writ of certiorari.

The Court recognized that the right to maintain the earlier date of use applies when the old mark and the new mark are “legal equivalents.” In order for the marks to be legally equivalent, they must create the same commercial impression such that the ordinary consumer would consider both the old mark and the modified mark to be the same. The appellate courts had been split on the question of whether this decision requires resolution by the district judge or by the jury. Upon consideration of this question, a unanimous Court held that this analysis “falls comfortably within the ken of a jury.” The Court observed that it had “long recognized” that “when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decisionmaker that ought to provide the fact-intensive answer.” The Court rejected several of the petitioner’s arguments to the contrary.

This decision clarifies that when a jury demand is made, the issue of tacking is a question of fact to be decided by the jury. As always, a judge can decide this question of fact in cases where no jury is demanded or when warranted under the standards for summary judgment or judgment as a matter of law. In view of this clarification, in any matters of trademark conflict that are dependent on the issue of tacking, a new degree of certainty can be applied in the analysis of the priority issue.

If you have questions regarding the Hana Financial decision, please contact Joseph T. Nabor, author of this alert.


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