Supreme Court Tackles Tacking Question in Hana

January.23.2015

On January 21, 2015, the United States Supreme Court in Hana Financial, Inc. v. Hana Bank, case number 13-1211, unanimously held that in cases (1) that go to a jury and (2) whose facts do not warrant either summary judgment or judgment as a matter of law, the jury as fact finder must decide whether a trademark user can "tack" the use of a prior related mark onto the use of a newer version of that mark for purposes of determining priority of use.  In an opinion written by Justice Sonia Sotomayor, the Court held the relevant inquiry for "whether two marks may be tacked" involves ordinary consumer understanding of a mark's impression, and accordingly is the kind of matter traditionally reserved for the trier of fact.  The question whether trademark tacking should be decided by juries or judges was the subject of a split among the circuit courts. 

Facts in Hana

The Respondent Korea Investment Finance Corporation had been providing financial services in Korea since 1971, changing its name in Korea to Hana Bank in 1991.  In 1994, Hana Bank began advertising its "Hana Overseas Korean Club" services to Korean expatriates in the United States.  In those advertisements, the name "Hana Bank" appeared in both Korean and English along with the company's logo.  Hana Bank launched its first establishment in the United States under the "Hana Bank" name in 2002. 

In 1995, the Petitioner, California corporation Hana Financial, first began using its name and trademark in commerce, and a year later secured a U.S. federal trademark registration of "Hana Financial" for use in connection with financial services. 

Hana Financial sued Hana Bank for infringement of the "Hana Financial" mark.  As a defense, Hana Bank claimed priority of use by virtue of the doctrine of tacking.  Hana Bank argued it had the right to tack onto its current use of "Hana Bank" the use of "Hana Overseas Korean Club" in the United States in 1994, a year prior to Hana Financial's first use of "Hana Financial" in commerce, and two years before Hana Financial's federal registration of the mark.  The District Court initially granted Hana Bank summary judgment, but the case went to trial after remand from the Ninth Circuit. 

At trial, the jury received from the Hana District Court the following jury instruction regarding tacking, which was substantially the jury instruction that Hana Financial had proposed without objection from Hana Bank:

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.

The jury then returned a verdict in favor of Hana Bank (the accused infringer), and the Ninth Circuit affirmed.   Hana Financial then sought certiorari from the Supreme Court, which was granted.

The Supreme Court agreed with the Ninth Circuit, holding that a determination of tacking "falls comfortably within the ken of a jury" given that the relevant inquiry considers "how an ordinary person or community would make an assessment" of whether the two marks at issue are the same mark.  The Court also rejected each of Hana Financial's arguments as to why the question of tacking should be reserved for the judge, including the argument that the "legal equivalents" test for tacking involves application of a legal standard. 

Justice Sotomayor made it clear in the opinion, however, that there will likely be many instances where the court, and not the jury, will make the determination as to whether two marks may be tacked:

 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 . . . . 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.

Conclusion

The Hana decision stands for the proposition that in any case tried to a jury a tacking dispute is a factual question for the jury to decide. Tacking, however, in the context of a summary judgment as a matter of law remains within the purview of the Court to decide.