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Ninth Circuit Affirms Jury Verdict Based on Trademark Tacking

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Parties competing for rights to a trademark must establish they used the trademark first, or that they have “priority.”  One way to prove priority is through “tacking,” which applies the first use date of a similar mark to the mark at issue. On November 22, 2013, in Hana Financial, Inc. v. Hana Bank, the Ninth Circuit affirmed a jury’s verdict that relied on tacking to find the defendant used the trademark before the plaintiff and was not liable for trademark infringement.

The Ninth Circuit maintains that tacking is an “exceptionally narrow” doctrine; it is a question of fact—a “highly fact-sensitive inquiry”—reserved for the jury.  Tacking requires that the “two marks are so similar that consumers generally would regard them as essentially the same.”  The marks “must create the same, continuing, commercial impression,” and the previously used mark must be the “legal equivalent” of the mark in question.  Although other circuits evaluate tacking as a question of law, those circuits also evaluate likelihood of confusion as a question of law, whereas likelihood of confusion is, consistently, a question of fact in the Ninth Circuit.

In Hana Financial, the parties both used the word “Hana” in their names and both offered financial services in the U.S.  In 1994, defendant Hana Bank began providing financial services in the U.S. under the name “Hana Overseas Korean Club” and used “Hana Bank,” in Korean, in its advertisements.  In 1995, plaintiff Hana Financial began using “Hana Financial” in the U.S. as a trademark and obtained a federal trademark registration for financial services.  In 2000, the defendant changed its name to “Hana World Center” and attempted to register the trademark but was not successful.  In 2002, the defendant began offering financial services under the name “Hana Bank.”  The plaintiff filed suit against the defendant in 2007 claiming that “Hana Bank” infringed its “Hana Financial” trademark.  The trademark infringement claims were tried to a jury, which was instructed:

A party may claim priority in a mark based on the first use date of a similar but technically distinct mark where the previously used mark is the legal equivalent of the mark in question or indistinguishable therefrom such that consumers consider both as the same mark.  This is called ‘tacking.’  The marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked.

The jury found that the defendant had priority because it used its mark in commerce in the U.S. before plaintiff’s use.  The district court denied plaintiff’s motion for judgment as a matter of law and a new trial, and the Ninth Circuit affirmed upon de novo review.  The Court recognized there was no consumer survey evidence—which the Ninth Circuit maintains would have been ideal—and “reasonable minds could disagree” about whether “Hana Oversees Korean Club,” “Hana World Center,” and “Hana Bank” were sufficiently similar and conveyed the “same, continuing commercial impression.”  But the Court found the jury could have reasonably reached the conclusion it did and that the jury instruction “correctly conveyed the narrowness” of the tacking doctrine.  Therefore, it was “arguably dispositive” that the Court characterized tacking as a question of fact, and the Court affirmed.