MVS Filewrapper® Blog: U.S. Supreme Court Holds Trademark Tacking Is a Question for the Jury

By Jonathan Kennedy


The Supreme Court recently released its unanimous decision in Hana Financial, Inc. v. Hana Bank, holding that “when a jury trial has been requested and when the facts do not warrant entry of summary judgment or judgment as a matter of law, the question of whether tacking is warranted must be decided by a jury.”


The case involved use of the "Hana Bank" mark by a Korean financial service provider, which has been known as “Hana Bank” since 1991. However, in 1994 it established a service called “Hana Overseas Korean Club” which was advertised in the United States. In 2000, “Hana Overseas Korean Club” was renamed to “Hana World Center” and finally began operation in the United States as “Hana Bank” in 2002.  The petitioner, Hana Financial, is a California company established in 1994 and also in the field of providing financial services. In 1996, after a year of use in commerce, Hana Financial obtained a federal registration for its logo appearing with the name “Hana Financial.” Suit was brought in 2007 by Hana Financial, alleging trademark infringement on the basis that the use of "Hana Bank" infringed the rights in the "Hana Financial" trademark. In response, the respondent invoked the tacking doctrine to assert earlier rights.  The tacking issue was ultimately decided by a jury, with the district court denying motions for judgment as a matter of law.


The tacking doctrine recognizes that trademark owners and users should be allowed to make certain changes to their marks over time without losing their claim of priority. Lower courts have traditionally found that tacking is available when the original and revised marks are “legal equivalents” which have the same, continuing commercial impression when viewed through the eyes of the consumer.


Justice Sotomayor delivered the opinion of the Court and noted that it has long been recognized across doctrinal lines that when the viewpoint of an ordinary person is in question, the jury is generally the decision maker. However, the Court distinguished that holding when warranted by the facts, a judge may decide the question of tacking on a motion for summary judgment or for judgment as a matter of law. Furthermore, the Court noted that even if tacking was to be considered a mixed question of law and fact due to the “legal equivalence” requirement, typically these mixed questions are still left to the jury with carefully crafted jury instructions as to the legal standard.

Second Circuit limits 1-800 Contacts; keyword advertising can be use in commerce

In a recent decision, the Second Circuit reversed a district court's grant of a motion to dismiss in a trademark infringement case.  The district court, relying on the Second Circuit's 2005 decision in 1-800 Contacts, Inc. v., Inc., held Google's use of its Adwords and Keyword Suggestion Tool to cause advertising to appear when certain trademarked words and phrases are searched did not constitute a "use in commerce" as defined in § 1127 and required for a claim of trademark infringement under § 1114.

On appeal, the Second Circuit reversed, holding this practice did constitute a use in commerce.  The court distinguished the 1-800 Contacts case, observing in that case, the advertisements were in response to visiting a website, not the entry of a trademark.  Further, in that case, advertisers could not "purchase" a competitors keyword, so even if an advertiser wanted its ads to appear when a user visited a competitor's site, the defendant did not offer such a service.

In contrast, here Google not only keys the advertisements to the trademark itself (rather than as a result of visiting a website), but also permits anyone to pay to have its advertisements shown when a trademark is searched.  The Keyword Suggestion Tool will also suggest that advertisers key their advertisments to trademarked terms.  Based on these allegations (taken as true in the context of Google's motion to dismiss), the Second Circuit held there was a use in commerce, and reversed the district court's dismissal of the case.

More detail of Rescuecom Corp. v. Google Inc. after the jump.


Second Circuit: Sales pitch of slogan to credit card companies not use in commerce

In a decision Monday, the Second Circuit affirmed a district court's summary judgment in a trademark case involving the slogan "My Life. My Card."  An individual threatened to sue American Express for use of the slogan, alleging that he had superior rights in the mark based on efforts to license the phrase to various credit card companies, including American Express.  American Express filed a declaratory judgment action, and the district court granted summary judgment to American Express, holding that seeking to license the mark to companies did not constitute a use in commerce, and as such the individual had not gained any trademark rights in the phrase. 

The Second Circuit affirmed, agreeing that because the individual had not used the mark in commerce, American Express legally held the trademark rights to the "My Life. My Card." slogan.  As summarized by the court:  "there can be no trademark absent goods sold and no service mark without services rendered."

More detail of Am. Express Co. v. Goetz after the jump.


Seventh Circuit: single sale insufficient use in commerce to support trademark registration

In Custom Vehicles, Inc. v. Forest River, Inc., the Seventh Circuit Court of Appeals held that a trademark plaintiff did not engage in sufficient use in commerce to support trademark rights. Even worse for the plaintiff, the court held that even if there were sufficient use, the mark at issue was descriptive, and there was no secondary meaning, so the plaintiff had no trademark rights to enforce. Ultimately, the court affirmed the lower court's grant of summary judgment to the defendant.

More details of the case after the jump.


Trademark "use in commerce" must be lawful to build trademark rights

When is a use in commerce not sufficient to build trademark rights? When that use is unlawful. The Ninth Circuit, in a dispute between two manufacturers of antioxidants made from olive extract, held in an issue of first impression in that circuit that unlawful use in commerce cannot support federal trademark rights. This decision agrees with the Tenth Circuit, apparently the only other Court of Appeal to have decided this issue, as well as the Trademark Trial and Appeal Board (TTAB). More details of the case after the jump.


"Use in commerce" not necessary to support trademark opposition, just use in the United States

The Federal Circuit, reversing the Trademark Trial and Appeal Board ("TTAB"), found that a Canadian company who arguably only did business in Canada could oppose a trademark application based on "spillover" use of its unregistered trademark in the United States. The Canadian company, First Niagara Insurance Brokers, opposed several trademark applications filed by a United States company, First Niagara Financial Group. Both companies use, among others, the word mark "First Niagara," and both companies use a logo, shown below:

First Niagra First Niagara 2

The TTAB held that because the Canadian First Niagara had not used its marks "in commerce" as required by 15 U.S.C. § 1127, it could not use those marks as a basis to oppose the U.S. First Niagara's applications.

The Federal Circuit reversed. First, the court noted that 15 U.S.C. § 1052(d) states that an opposition may be filed based on a mark previously "used in the United States," as opposed to the requirement for registration that the mark be used "in commerce." In addition, a prior Federal Circuit case had held that a mark only used in intrastate commerce can support an opposition. The court found no reason to treat a foreign company who use may not rise to the level required for registration any differently than a domestic one. While there was an issue regarding whether the Canadian First Niagara had waived this argument, the court ultimately held that because there was use of the Canadian marks in the United States, the fact that there may not have been use "in commerce" necessary to register the Canadian marks did not matter for purposes of the opposition.

Accordingly, the court sent the case back to the TTAB for resolution of the opposition on the merits.

To read the full decision, click here.

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