Hana Bank Meets Exceptionally Narrow Circumstances to Establish Trademark Priority Through Tacking: Ninth Circuit | Practical Law

Hana Bank Meets Exceptionally Narrow Circumstances to Establish Trademark Priority Through Tacking: Ninth Circuit | Practical Law

In Hana Financial, Inc. v. Hana Bank, the US Court of Appeals for the Ninth Circuit held that a properly-instructed jury reasonably applied the tacking doctrine to find that the defendant had priority over the plaintiff for the use of HANA as part of a trademark for financial services.

Hana Bank Meets Exceptionally Narrow Circumstances to Establish Trademark Priority Through Tacking: Ninth Circuit

by Practical Law Intellectual Property & Technology
Published on 25 Nov 2013 • USA (National/Federal)
In Hana Financial, Inc. v. Hana Bank, the US Court of Appeals for the Ninth Circuit held that a properly-instructed jury reasonably applied the tacking doctrine to find that the defendant had priority over the plaintiff for the use of HANA as part of a trademark for financial services.
On November 22, 2013, in Hana Financial, Inc. v. Hana Bank, the US Court of Appeals for the Ninth Circuit affirmed the US District Court for the Central District of California's decision denying Hana Financial Inc.'s (HFI) motion for judgment as a matter of law concerning trademark priority. Notably, the court upheld the jury's verdict that Hana Bank (Bank) had established priority by the doctrine of tacking (No. 11-56678, (9th Cir. Nov. 22, 2013)).
HFI and Hana both use the English word HANA in their names and offer financial services. In 2007, HFI sued the Bank, alleging that the Bank's HANA BANK mark infringed its HANA FINANCIAL mark. The Bank responded, seeking cancellation of HFI's registration for the HANA FINANCIAL mark based on HFI's alleged awareness of the Bank's superior rights.
The court identified the following facts relevant to its priority analysis:
  • May 1994: The Bank, a Korean financial entity, establishes the Hana Overseas Korean Club (Club) in the US to provide financial services to Korean expatriates.
  • July 1994: The Bank advertises the Club in major US cities with promotional materials and newspaper advertisements featuring:
    • the name HANA OVERSEAS KOREAN CLUB in English;
    • the names HANA BANK and HANA OVERSEAS KOREAN CLUB in Korean; and
    • a dancing man logo, known as the Bank's logo.
  • April 1, 1995: HFI begins using its HANA FINANCIAL trademark in commerce.
  • July 16, 1996: HFI obtains a federal trademark registration for a pyramid logo with the words HANA FINANCIAL for use in connection with factoring and other financial services.
  • 2000: The Bank changes the club name to HANA WORLD CENTER.
  • 2002: The Bank begins operating an agency in New York under the HANA BANK name.
In 2008, the district court granted:
  • The Bank's motion for summary judgment on trademark priority.
  • HFI's motion for summary judgment on the Bank's cancellation counterclaim.
On appeal in 2010, the Ninth Circuit:
  • Reversed and remanded the district court's priority decision.
  • Affirmed the district court's grant of summary judgment on the cancellation counterclaim, noting that HFI's alleged knowledge of the bank's mark was not sufficient to establish fraudulent intent.
On remand, the district court tried the trademark infringement claim to a jury. The district court instructed the jury that tacking:
  • Allows a party to claim priority based on the earlier use of a similar but technically distinct mark.
  • Requires the two marks to create the same, continuing commercial impression.
The jury found that the Bank had used its mark in commerce before April 1, 1995, HFI's first use date, and continuously since then. The district court entered judgment in the Bank's favor and HFI appealed.
On appeal, the Ninth Circuit analyzed whether it was permissible for the jury to find that the Bank could "tack" its use of its present HANA BANK mark back to its 1994 use of the Club mark to establish priority. In the Ninth Circuit, tacking only applies in exceptionally narrow circumstances as explained in Brookfield Communications, Inc. v. West Coast Entertainment Corp.(174 F.3d 1036 (9th Cir. 1999)). Under Brookfield, tacking applies when:
  • The marks create the same, continuing commercial impression.
  • The later mark does not materially differ from or alter the character of the earlier mark.
In the Ninth Circuit, tacking is a question of fact that must ultimately be decided by the jury.
Although the court believed that reasonable minds could disagree on whether the Bank's marks were materially different, it concluded that HFI, as the losing party, had the burden to show that its interpretation of the evidence is the only reasonable one but failed to do so. Instead, the court determined that there was sufficient evidence to support the jury's verdict on trademark priority because:
  • Ordinary purchasers were Korean-speaking consumers who likely had a preexisting awareness of the Bank due to its ongoing business presence in Korea.
  • It was reasonable for the jury to conclude that the purchasers associated "HANA BANK" with the "HANA OVERSEAS KOREAN CLUB" when "HANA OVERSEAS KOREAN CLUB" appeared in English next to "HANA BANK" in Korean and the dancing logo.
  • "HANA" was arguably the most significant portion of the mark and ordinary purchasers could associate the English word "HANA" with the Bank's Korean name.
  • Ordinary purchasers could regard "OVERSEAS KOREAN CLUB" and "WORLD CENTER" as non-essential portions of the marks since they simply conveyed what ordinary purchasers already deduced, that the Bank was offering financial services to people living outside Korea.
The court held that under these circumstances, a reasonable jury could conclude that the ordinary purchasers of the Bank's financial services had the continuous, commercial impression that the Bank offered these advertised services and the marks were not materially different. Therefore, the Bank could tack its present use back to the 1994 use, establishing superior rights over HFI.