On Wednesday, January 21, 2015, the Supreme Court handed down its first substantive trademark ruling in more than a decade in Hana Financial, Inc. v. Hana Bank, Case No. 13-1211, slip op., 574 U.S. __ (2015). The unanimous opinion held that trademark “tacking” is a factual question that should typically be determined by juries, not judges. The Court affirmed a Ninth Circuit decision that refused to overturn a jury verdict and held that the tacking issue was properly submitted to and decided by the jury as a question of fact. The Hana Financial ruling settles a split between the circuit courts of appeals as to whether trademark tacking is a question of law or fact.
The party who first uses a trademark in commerce has priority over later users of the same or confusingly similar marks. The tacking doctrine allows trademark owners to make small modifications to their marks over time without losing their priority date. This allows trademark owners to modify their marks—for example to modernize a logo or update a name to reflect market changes—without losing priority over others. However, for the revised mark to benefit from the priority of the predecessor mark (that is, to be “tacked” to the earlier version), both marks must “create the same, continuing commercial impression” when they are “viewed through the eyes of a consumer.” Slip Op. 3-4. If a consumer would not view the marks as having the same, continuing commercial impression, they are not legal equivalents and the revised mark would be deemed to be a new trademark with a priority date of when the revised mark was first used in commerce. The Supreme Court found that these types of fact-based analyses are typically the purview of juries and rejected Hana Financial’s arguments that trademark tacking should be an exception to that long-standing practice.
The principal effect of the Hana Financial decision is that some trademark litigation involving tacking may take longer to resolve because the tacking issue is less likely to be decided through pre-trial motions. The Court was quick to point out, however, that this ruling does not prohibit judges from deciding the potentially outcome determinative issue of tacking in the proper circumstances. Justice Sotomayor explained that a judge may rule on tacking if the facts warrant entry of summary judgment or judgment as a matter of law, or if the parties choose to try their case before the judge in a bench trial. Slip Op. 5.
The Hana Financial decision is the first of two trademark cases heard by the Supreme Court this term. In the forthcoming opinion in B&B Hardware v. Hargis Industries, another trademark case argued on the day before Hana Financial, the Court is expected to address the extent to which the Trademark Trial and Appeal Board’s findings on likelihood of confusion are binding in related trademark infringement actions in federal court.