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The Supreme Court Deals with Tacky Trademarks

The U.S. Supreme Court is usually content to leave trademark law more or less untouched, relying on the lower courts to adjust the doctrine since it is something of a niche area of law. Yet, the Court has actually heard two trademarks cases this term. One, B&B Hardware v. Hargis Industries has yet to be decided, but the opinion in the other, Hana Financial v. Hana Bank, came down at the end of January. The Hana Financial case centered around an often overlooked trademark law doctrine, trademark tacking.

What Trademark Tacking Is

Trademark tacking is a legal doctrine that allows people to update their trademarks without losing “priority.” Priority is the date that a person or company gained the rights to use a mark, and it can be extremely important in many trademark cases. This is because in most scenarios, priority determines who is the markholder and who is the infringer. Consequently, trademark cases can often involve battles between the parties to determine which of them has the earlier priority date.

Trademark tacking comes into play when a party wants to change what their mark looks like, while maintaining the same general mark. For instance, the Quaker Oats mascot has been a trademark for 135 and he has undergone some substantial changes over time, as this blog post demonstrates. That image modernization is important for many companies from a marketing perspective. Trademark tacking allows companies to update their marks, while still claiming priority back to the original date.

The Quaker Oats example above may be somewhat deceptive though, since the changes have actually accumulated bit by bit over the mark’s long history. In general, trademark tacking is a narrow doctrine that requires that the updated mark and the original mark provide consumers with the same “commercial impression,” a high standard to meet. The idea behind this standard is that courts do not want a person expanding their trademark rights through the use of this doctrine. The fear is that a company could push its competitors out of the market by creating a new logo, and tacking it back to their original in order to retroactively turn an honest competitor into an infringer.

The Hana Financial Case

The Hana Financial case itself focused on the question of whether judges or juries should decide whether a new mark could tack back to an older one. The parties in the case were a pair of Korean banks providing financial services to Korean expatriates in the United States. Hana Bank was originally founded in the U.S. as Hana Overseas Korean Club. However, they ran an advertisement in 1994 for their Hana Bank services. In 1995 the other party, Hana Financial, began operating in California. In 2002, the Hana Overseas Korean Club changed its name to Hana Bank in the U.S. Hana Financial then sued Hana Bank for trademark infringement based on the name change. Hana Bank argued that it actually had priority based on the 1994 advertisement, which they could tack back to.

The jury in the lower court ultimately decided that tacking did apply, and that Hana Bank had priority to the name. Hana Financial appealed, arguing that judges, not juries, should decide the question. The Supreme Court took the case, and ultimately decided that the question of tacking was one that required the application of a legal standard to fact, which is part of the jury’s duties in a lawsuit.

Trademark law is a nuanced legal area with many complex doctrines. If you are currently involved in a trademark dispute, contact an experienced West Palm Beach trademark attorney at Pike & Lustig, LLP today.

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