Korean Bank Loses High Court Trademark Battle

WASHINGTON (CN) - Juries rather than judges should decide whether the owner of a trademark can "tack" newer versions with the original's priority, the Supreme Court ruled Wednesday.

The decision comes in a dispute between two similarly named companies that both work with U.S. customers in the same industry. Hana Financial Inc. was incorporated in California in 1994, and the other company, established in 1971 as Korean Investment Finance Corp., changed its name to Hana Bank in 1991.

In Korean, the word hana means "number one," "first," "top," or "unity," court records show.

Hana Bank tried to cancel Hana Financial's trademark based on the latter's alleged awareness of the bank's superior rights.

Though a federal judge granted the Korean bank summary judgment on trademark priority in 2008, it shot down the cancelation maneuver.

The 9th Circuit has ruled on this case twice already. In 2010, it reversed on priority and remanded for trial.

After a trial in 2011, a jury found that Hana Financial's claims were barred by laches, meaning that it unreasonably delayed filing suit, and by unclean hands.

The 9th Circuit affirmed in 2013 after finding that the jury was properly instructed to apply the tacking doctrine, which lets a party "tack" the date of its first use of a mark onto a subsequent mark to establish priority where the two marks are so similar that consumers would generally regard them as being the same.

The Supreme Court took up the case last year and unanimously affirmed Wednesday.

Though the Korean bank said a judge, rather than a jury, should have decided whether tacking was available to it, the court disagreed "because the tacking inquiry operates from the perspective of an ordinary purchaser or consumer."

"This is certainly not to say that a judge may never determine whether two marks may be tacked," Justice Sonia Sotomayor wrote for the court. "If the facts warrant it, a judge may decide a tacking question on a motion for summary judgment or for judgment as a matter of law. And if the parties have opted to try their case before a judge, the judge may of course decide a tacking question in his or her factfinding capacity. We hold only 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 whether tacking is warranted must be decided by a jury."

Sotomayor shot down the Korean bank's concern that jury handling of such issues will upend "the predictability required for a functioning trademark system."

"The same could be said about the tort, contract, and criminal justice systems: In all of these areas, juries answer often-dispositive factual questions or make dispositive applications of legal standards to facts," she wrote. "The fact that another jury, hearing the same case, might reach a different conclusion may make the system 'unpredictable,' but it has never stopped us from employing juries in these analogous contexts. Petitioner has offered no reason why trademark tacking ought to be treated differently. Moreover, decisionmaking in fact-intensive disputes necessarily requires judgment calls. Regardless of whether those judgment calls are made by juries or judges, they necessarily involve some degree of uncertainty, particularly when they have to do with how reasonable persons would behave."

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