January 22, 2015
By: Jessica Mendelson
It’s a historic week for trademarks! On January 21, 2015, the U.S. Supreme Court issued a decision in the case of Hana Financial, Inc. v. Hana Bank, which marks the high court’s first substantive ruling on trademarks in more than ten years. In its decision, the Supreme Court unanimously held that trademark tacking is a factual question, and thus, should be decided by juries.
The Supreme Court’s ruling affirms the Ninth Circuit’s prior decision, and allowed Hana Bank to defeat trademark claims by showing priority through tacking. Under the doctrine of tacking, a trademark holder may slightly modify their trademark, yet still maintain the original first-use date, and thus, maintain priority. Courts permit tacking where the marks at issue are considered legal equivalents, and create the same commercial impression.
In Hana Financial, the question before the court was whether tacking was a legal question for a judge, or a factual question for a jury. In an opinion by Justice Sonia Sotomayor, the Court held that the question was something that should be addressed by a jury, rather than a judge. According to Sotomayor’s opinion, the test to determine whether there was tacking, which requires determining whether the marks are sufficiently similar that consumers view both marks as the same, was suited for a jury. According to Justice Sotomayor, “we have long recognized across a variety of doctrinal contexts that, when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decision maker that ought to provide the fact-intensive answer.” Sotomayor’s opinion does not preclude the hearing of such cases by judges, however. In fact, Sotomayor suggests that “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. And if the parties have opted to try their case before a judge, the judge may of course decide a tacking question in his or her fact finding capacity. 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."
While the Supreme Court’s ruling ends a longstanding circuit split, practically speaking, the number of cases impacted will likely be limited. Both parties agreed in their pleadings that tacking is rare, and the Ninth Circuit itself noted “tacking only applies in ‘exceptionally narrow’ circumstances,” since it effectively allows a trademark owner to cut in line by claiming an earlier priority date based on the use of a previous mark. However, in cases where tacking is involved, it may lead to increased litigation costs. According to one expert, since tacking is a question of fact, it could require the use of more expensive evidence, such as consumer surveys, which would not be necessary if the tacking were a question of law, and the issue was resolved earlier in the case.