Sheppard Mullin’s intellectual property group prevailed before the United States Supreme Court in the trademark matter entitled Hana Financial v. Hana Bank. 574 U.S. --- (2015). Justice Sotomayor, writing for a unanimous court, affirmed a Ninth Circuit ruling that the doctrine of trademark tacking presents a question of fact appropriate for jury determination. 735 F.3d 1158 (9th Cir. 2013). This was the first substantive trademark decision by the U.S. Supreme Court in nearly a decade. Partner Carlo Van den Bosch argued the case before the Supreme Court. With him on the briefs were Bob Rose, Michelle Wisniewski, and Gazal Pour-Moezzi. Karin Vogel and Robert Stumpf from the appellate group also contributed.
The Supreme Court resolved a Circuit split on the issue of tacking, which arose when the Federal Circuit and Sixth Circuit treated trademark tacking as a question of law. The tacking doctrine evolved to allow trademark owners to change their mark over time without disturbing priority rights. A trademark owner may “tack” its use of an altered mark onto its original mark when both marks convey a “continuing commercial impression.” This question involves a subjective assessment of how consumers perceive the altered and original marks as they appear in the marketplace.
In 2007, Hana Financial, Inc. (“HFI”), a Los Angeles-based financial services company, filed a complaint for trademark infringement to prevent Hana Bank from using its name in the United States. Hana Bank argued that it, rather than HFI, was first to use the name “Hana” in the United States. Hana Bank established its “Hana Overseas Korean Club” in May 1994 and, within months, began advertising in several Korean language newspapers throughout the United States, including the Los Angeles edition of the Korea Times. HFI did not begin using its name until 1995. In 2007, the District Court for the Central District of California granted summary judgment in favor of Hana Bank on the basis of its trademark priority.
In 2011, the case was remanded for trial by the Ninth Circuit, and Hana Bank again prevailed before a unanimous jury that found Hana Bank had priority to the “Hana” name. On appeal, HFI argued that the jury’s priority verdict was erroneously premised on tacking of the phrase “Hana Overseas Korean Club” onto the mark “Hana Bank.” It argued that the two marks were too different to convey a “continuing commercial impression.” The Ninth Circuit affirmed the defense judgment in favor of Hana Bank because it deems tacking an issue of fact, and it considered the jury’s conclusion reasonable under the facts of the case. Hana Financial v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013).
HFI appealed to the U.S. Supreme Court, where it argued that Hana Bank’s trademark priority should be decided by a judge as an issue of law, not by a jury as a question of fact. The unanimous Supreme Court agreed with Hana Bank that tacking indeed constitutes a question of fact appropriate for jury determination. The Court reasoned that “[b]ecause the tacking inquiry operates from the perspective of an ordinary purchaser or consumer,” it “must be decided by a jury.” The Court did not address the impact of its decision on other facets of trademark law, including the likelihood of confusion standard, which similarly involves issues of consumer impression.