January 26, 2015

By: Supreme Court Provides Victory For Brand Owners But May Lead To Protracted Litigation

The U.S. Supreme Court in Hana Financial, Inc. v. Hana Bank et al., resolved a circuit split with respect to the “tacking” doctrine in trademark law, holding that it is for the jury to decide whether a party is entitled to tack the use of previous marks to establish priority.

Trademark law provides that a party who first uses a mark in commerce has “priority” over other users of the same or confusingly similar marks.  Tacking permits a trademark user to make modifications to their mark over time without losing priority if the modified mark creates the same, continued commercial impression so that consumers consider both marks as the same mark.  This allows brand owners to update the mark over time without losing the priority date of the original mark. For example, in Hana Financial, the prior user established priority in their HANA BANK mark by tacking the use of two previously used marks, HANA OVERSEAS KOREAN CLUB and HANA WORLD CENTER.

The Court held that the issue of tacking should be a jury determination because the doctrine focuses on the impression a mark creates on the ordinary consumer.  The Court reasoned that the “ordinary consumer” is similar to other factual determinations made by juries, such as the “reasonable man” or the “average person.”

As a result, the ability to have these matters addressed early in litigation is reduced, possibly leading to increased litigation costs.