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Tacking It To The JuryŚNinth Circuit Confirms That Trademark Tacking Is An Issue Of Fact, Citing A Split Among Circuits

Tuesday, November 26, 2013

The Ninth Circuit Court of Appeals, in a published opinion, has affirmed the unanimous verdict of a federal jury in favor of our client Hana Bank in a trademark infringement matter. Hana Financial v. Hana Bank, __ F.3d __ (9th Cir. Nov. 22, 2013). Carlo Van den Bosch (OC) and Bob Rose (SD) chaired the May 2011 trial before Judge Anderson in the Central District of California. Seth Kim (Seoul) and Ken Carl (LA) assisted.

Plaintiff Hana Financial, Inc. (HFI), a factoring company in Los Angeles, had claimed superior domestic rights in the trademark “Hana” in connection with financial services, and alleged trademark infringement by Hana Bank, one of Korea’s largest banks, when the latter expanded its U.S. presence. The jury returned a unanimous non-infringement verdict in favor of Hana Bank, finding that it was the Bank, not HFI, who first used the mark in U.S. commerce. In addition, Judge Anderson held that HFI’s claims were separately barred by laches and unclean hands.

HFI appealed the post-trial judgment and argued that the jury’s finding of trademark priority violated the narrow doctrine of trademark tacking. This constructive use doctrine allows a party to link its first use of a mark onto a subsequent mark to establish trademark priority, where the two marks are so similar that consumers would generally regard them as the same. Here, according to HFI, Hana Bank could not tack its original use of “Hana Overseas Korean Club” to its use of “Hana Bank” because the two were not “virtually identical.”

Hana Bank established its “Hana Overseas Korean Club” in May 1994 to provide services to Korean-Americans. That July, the Bank published advertisements in several Korean language newspapers throughout the United States, including the Los Angeles edition of the Korea Times. In these advertisements, the name “HANA Overseas Korean Club” appeared in English, while “Hana Bank” also appeared in the Korean language, along with the Hana Bank logo.

The Court expressed its continued view that tacking should only be permitted in “exceptionally narrow” circumstances, and confirmed that in the Ninth Circuit, tacking is to be viewed as a question of fact, requiring a “highly fact-sensitive inquiry” reserved for the jury. This is the subject of a Circuit split, with the Federal and Sixth Circuits evaluating tacking as a question of law consistent with their view that the analogous issue of consumer confusion is also a question of law.

The panel noted that the jury had received an instruction that correctly conveyed the narrowness of the tacking doctrine, and it could have reasonably concluded that ordinary purchasers of the financial services at issue likely had a consistent, continuous commercial impression of Hana Bank’s services and their origin. Accordingly, there was sufficient evidence to support the jury’s verdict on trademark priority, and the post-trial judgment was affirmed in favor of Hana Bank.

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