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SCOTUS Settles Circuit Split Regarding Trademark Tacking In Hana Financial Case

SUMMARY

Litigating over first use and priority of a mark is commonplace in trademark litigation.  Generally, a party can establish rights in a trademark by using the mark in commerce before others.  Through the course of time, courts have developed and recognized a concept called “tacking” in which a trademark owner can apply the priority position of a new mark by using the priority date of a prior registered mark.  The thrust of tacking requires that the new trademark must be the legal equivalent of one another.  The marks are the legal equivalent of one another if the new mark creates the same commercial impression with ordinary consumers that the old mark did.  Before the Supreme Court ruled on this matter, lower courts were split on whether tacking was an issue for the court or the jury.  On January 21, 2015, the Supreme Court held that tacking is a question for the jury in Hana Financial, Inc. v. Hana Bank (2015) 135 S.Ct. 907.

FACTS     

The Defendant/Respondent Hana Bank began as a Korean financial entity in 1971.  In 1991, it began using the name Hana Bank in Korea and Hana Overseas Korean Club in the US in 1994.  Advertisements for Hana Overseas used the term “Hana Bank” in Korean.  By 2002, Defendant/Respondent opened its first brick and mortar bank in the US under the name “Hana Bank” in English.

Plaintiff/Petitioner Hana Financial, Inc. is a California corporation established in 1994.  It first used the name and service mark “Hana Financial” in commerce in 1995 and registered the mark with the USPTO in 1996.

LOWER COURT PROCEEDINGS

Hana Financial sued Hana Bank in the Central District of California in 2007.   Hana Bank defended by claiming priority, arguing that its current use of Hana Bank should be tacked onto it 1994 use of Hana Overseas Korean Club.  At trial, a jury determined that Hana Bank successfully invoked the tacking doctrine, and hence, established priority in use of the Hana mark.  On appeal, the Ninth Circuit affirmed and explained that tacking is a highly fact intensive inquiry best suited for jury determination.

SUPREME COURT HOLDING

The Supreme Court unanimously held that tacking is a question to be determined by the jury.  The Supreme Court reasoned that a jury is well-suited to apply a test relying upon an ordinary consumer’s understanding of the commercial impression that a mark conveys.  The Court then clarified that of course, judges may still be called upon to decide tacking questions on summary judgment grounds or in bench trials.

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