Hana Financial, Inc. v. Hana Bank is the final case we’ll discuss reviewing the recent Supreme Court decisions. This case involved review of a very specific issue, namely, whether “tacking” is a question of fact or law.
What is “Tacking”?
Under general principles of trademark law, the first party to use a mark generally has the superior rights. Technically, each time a party modifies a trademark, a new trademark is created and use of that mark relates only to that particular mark and not to any prior iterations of the mark.
However, the doctrine of “tacking” has evolved to allow trademark owners the ability to change their marks and still claim priority based on prior versions of a mark. Basically, a trademark owner may “tack” its use of an altered mark onto its use of the original, prior mark when both marks convey a “continuing commercial impression.” The determination of whether there is this “continuing commercial impression” involves an assessment of how consumers would perceive the original and altered forms of the marks as they appear in the marketplace. If the two would be considered as conveying this “continuing commercial impression,” then the rights in the mark would relate back to use of the original mark.
Facts of the Case
Hana Bank, a Korean entity, began operations as “Korea Investment Finance Corporation” in 1971. In 1991, the name was changed to “Hana Bank.” In 1994, Hana Bank began providing financial services in the United States advertising itself as “Hana Overseas Korean Club.” In 2000, the name was again changed to “Hana World Center.” Also in 2000, the company began operating a bank in the U.S. under the name “Hana Bank.” On the other side, Hana Financial began using the “Hana Financial” name in 1995 and obtained a federal trademark registration for that mark in 1996.
In 2007, Hana Financial sued Hana Bank, claiming Hana Bank was infringing its HANA mark. Hana Bank denied infringement claiming it had priority of use of the HANA mark by invoking the tacking doctrine, claiming rights to HANA back to 1994 and its first use in the United States of the “Hana Overseas Korean Club.” This first use trumped Hana Financial’s first use in 1995. The case ultimately went to trial and a jury found no infringement, agreeing that Hana Bank had priority based on tacking. Hana Financial appealed and the Ninth Circuit affirmed, stating that the tacking question was the realm of the jury.
The SCOTUS Ruling
In a unanimous decision the Supreme Court agreed, holding that tacking indeed constitutes a question of fact appropriate for jury determination. Per the Court, since tacking requires two marks to convey “continuing commercial impression” and the issue of commercial impression must be viewed through the eyes of the consumer, it was a fact question only a jury could answer. Thus, whether a party may tack use of one mark onto another must be decided by juries.
Why it Matters
The Hana decision is important in that it resolved a split among the Appellate Circuits regarding this precise issue, thus providing more certain direction for future litigants. The reasoning behind Hana also may provide guidance regarding other issues in trademark law. For instance, another key consideration in any trademark infringement case is likelihood of confusion of two marks. Likelihood of confusion, like tacking, requires viewing two marks through the eyes of an ordinary consumer. While the majority of courts view this as a question of fact, some consider it a legal question or a mixed question of fact and law. Hana seems to indicate that the majority view that likelihood of confusion is a question of fact is likely the proper view.