No. 40
February 2015

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Trademark Tacking is a Question of Fact, Properly Decided by a Jury, U.S. Supreme Court Holds
(Article by Seth I. Appel, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, Chicago, Illinois, U.S.A.)
Hana Financial, Inc. v. Hana Bank, 574 U.S. ___ (2015)

In the United States, trademark ownership is based on use: the first party to use a mark has priority over subsequent users. The tacking doctrine permits a trademark owner to establish priority based on use of an earlier mark where the two marks are “legal equivalents” in that they create the same, continuing commercial impression. In Hana Financial, Inc. v. Hana Bank, 574 U.S. ___ (2015), the U.S. Supreme Court, resolving a circuit split, held that the application of tacking is a question of fact, not a question of law, because tacking is tested from the perspective of an ordinary consumer. Therefore, when a jury trial has been requested and the facts do not warrant entry of summary judgment or judgment as a matter of law, tacking must be decided by a jury.

In this lawsuit, Hana Financial claimed trademark infringement by Hana Bank. The jury returned a verdict in favor of Hana Bank because it had priority, through tacking, based on its earlier use of Hana Overseas Korean Club. The Ninth Circuit Court of Appeals affirmed judgment in favor of Hana Bank. The Supreme Court also affirmed, finding that the lower courts properly allowed the jury to decide the issue of tacking.

“Application of a test that relies upon an ordinary's consumer's understanding of the impression that a mark conveys falls comfortably within the ken of a jury,” the Court observed. Across a variety of doctrinal contexts, the Court explained, when the question is how an ordinary person or community would make any assessment, the jury is generally the proper decision-maker.

While tacking is a question of fact, the Court noted, under appropriate circumstances it may be decided by a judge on a motion for summary judgment or judgment as a matter of law. Further, if the parties have opted for a bench trial, the judge may decide tacking in his or her role as factfinder.

The Court rejected Hana Financial's argument that allowing juries to decide tacking would undermine the predictability required for a functioning trademark system. It noted that the same could be said about the tort, contract and criminal justice systems, where juries regularly answer factual questions and apply legal standards to facts. “[D]ecision making in fact-intensive disputes necessarily requires judgment calls,” the Court explained.

Because tacking is a question of fact, as held in Hana, it is generally more difficult to overturn such a finding on appeal.