In trademark disputes, parties may battle over who was the
first to use the mark. In other words, each party wants to establish that it is
the “prior user”. One way to establish priority is through a doctrine called “tacking”,
which permits a party to “tack” the use of an older mark onto a newer mark for
purposes of determining priority. The doctrine would allow a party, for
example, to “modernize” an older mark and still claim priority dating back to
the first use of its older mark. But, in order for the doctrine to apply, the
newer mark must not differ materially from the older mark. Rather, the newer
mark must create the same continuing, commercial impression as the older mark
to consumers; it must be the “legal equivalent”. Given this strict standard,
courts have recognized that tacking should be permitted only in rare
circumstances.
Last week, the Supreme Court of the United States granted a
writ of certiorari in Hana Financial,
Inc. v. Hana Bank to address the “tacking” doctrine. The question before
the Court is: “Whether the jury or the court determines whether use of an older
mark may be tacked to a newer one?” The case arises from a decision of the
Ninth Circuit, which affirmed a jury verdict on a tacking issue.
The petitioner in the case, Hana Financial, Inc., owns the
federally registered trademark, HANA FINANCIAL. Petitioner sued respondents,
arguing that their use of the mark HANA BANK infringed petitioner’s rights in
the HANA FINANCIAL mark. In turn, respondents argued that they were, in fact,
the prior users of the HANA mark. The respondents argued that before using the
HANA BANK mark, respondents used the mark HANA WORLD CENTER, and before that,
respondents used the mark HANA OVERSEAS KOREAN CLUB. Relying on the tacking
doctrine, respondents argued that they had priority of use stemming from their
first use of the mark HANA OVERSEAS KOREAN CLUB.
The district court in the underlying case submitted to the
jury the issue of whether respondent could tack on their prior uses of the HANA
mark to the mark HANA BANK. The jury returned a verdict in favor of the
respondents, and the Ninth Circuit affirmed.
In the Petition For A Writ Of Certiorari, the petitioner
emphasizes that the tacking doctrine is a narrow one. To illustrate the point,
the petitioner notes that the mark, AMERICAN MOBILPHONE with a star and stripe
design was held not to be the legal equivalent of the mark AMERICAN MOBILPHONE
PAGING, even though the latter mark had the identical star and stripe design.
The petitioner also notes that the mark CLOTHES THAT WORK FOR THE WORK YOU DO
was held not be the legal equivalent of the mark CLOTHES THAT WORK. The
petitioner notes, in contrast, that tacking has been permitted between the mark
HESS’S and the mark HESS.
The Federal Circuit, the Sixth Circuit, as well as the
Trademark Trial and Appeal Board, have held that the issue of whether a party
can tack the use of an older mark to a newer one is a legal question for the
court. The Ninth Circuit, however, treats trademark tacking as a question of
fact. In so holding, the Ninth Circuit has analogized the tacking standard to
the likelihood of confusion standard, which is the standard that is used to
determine trademark infringement. As explained in its decision, because the
Ninth Circuit treats likelihood of confusion as a question of fact, the Court
also has determined that tacking presents a question of fact.
The Supreme Court decision in Hana Financial, Inc. v. Hana Bank is anticipated to resolve the
split in the Circuits. The case is presently scheduled to be heard during the Supreme
Court’s October 2014 term.
