Hana Financial, Inc. v. Hana Bank: Tacking Priority of Earlier Trademarks

The U.S. Supreme Court does not get to tackle trademark law issues very often. The decision in Hana Financial, Inc. v. Hana Bank, (No. 13-1211; January 21, 2015) is the first pronouncement of the highest Court on trademark matters in more than a decade, and it deals with the issue known as tacking. Trademarks often experience changes in appearance and overall look in the course of many years. These changes can take various forms, such as a modification in lettering style, a rearrangement in the order of words, the dropping of a background design, or the addition of new stylized elements. The tacking doctrine allows a party to claim the earlier priority date of an old mark for a new trademark, if the later involves slight changes over the prior version. The U.S. Supreme Court’s decision in Hana Financial addresses narrowly the question as to whether tacking is a matter of law reserved to a judge, or a matter of fact decided by a jury.

Dispelling some prior concerns, the decision does not attempt to make a broader statement regarding the legal standard behind a likelihood of confusion determination. Justice Sotomayor, affirming the Ninth Circuit’s decision, delivered the opinion of the Supreme Court whether two marks may be tacked to determine priority is a question of fact for the jury.

It is unlikely that the decision will have large legal implications. A judge may still decide a tacking question on a motion for summary judgment or for judgment as a matter of law. Nonetheless, if the parties have requested jury trial and the facts do not warrant entry of summary judgment, the question whether tacking  is warranted will have to be decided by a jury. This could also increase the cost of litigation in a small number of cases. For example, the parties might find effective to introduce a variety of evidence in support of tacking, including consumer surveys, which can be costly. Additionally, the decision negates the inclination of parties in trademark litigation to avert the involvement of juries, often preferring the technical expertise of a judge.

The most important lesson from the Hana Financial decision probably lies beyond the ratio decidendi of the case. The U.S. Supreme Court rarely addresses trademark questions and, that it elected to do so on the role of the jury instead of other, more technical issues, reinforces the Court’s view of the primacy of juries in trademark matters. For example, the decision may have a ripple effect and help resolve the split in the circuits as to whether likelihood of confusion is an issue of fact reviewed on appeal under the “clearly erroneous” standard or whether it is an issue of law, as such reviewed de novo.

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