In the trademark context, “tacking” refers to a legal doctrine that allows a trademark to undergo minor changes over time and maintain its priority to prevent subsequent users from taking over lawful use of the mark in commerce. Tacking also avoids a finding by a Court that the earlier user abandoned its rights to the prior trademark. The doctrine is useful for more and more companies seeking to update their word and logo marks over time to reflect changing consumer perceptions and desires in the marketplace. For example, the “Morton Salt” word mark and “Salt Girl” logo were recently given a fresh look in conjunction with the logo’s 100th birthday. Nonetheless, as a legal question, tacking cases have been rare.
Companies must be careful not to make the updated trademark materially different from the old one, lest they risk legal abandonment of the prior trademark. The key is that the changes must be minor enough that they are the “legal equivalent” of the old trademark and maintain the “continuing commercial impression” in the marketplace. Commercial impression has been defined as “the meaning or idea it conveys or the mental reaction it evokes” An example of legal equivalence is “Hess Brothers” as the legal equivalent of “Hess’s of Allentown, Inc.” where the promotion of the mark was primarily “Hess” or Hess’s.” A trademark that failed to “tack” was “AMERICAN MOBILPHONE;” held not to be the legal equivalent of “AMERICAN MOBILPHONE PAGING.”
So who gets to decide the scope of these updates, the judge as a matter of law or the jury as a matter of fact? Enter Hana Financial, Inc. v. Hank Bank and Hana Financial Group, 735 F a fantastic read.3d 1158 out of the Ninth Circuit appellate court in California. In Hana, the jury was entitled to conclude as a matter of fact that “Hana Bank” was the legal equivalent of “Hana Overseas Korea Club,” the latter a mark being used continuously since 1994 to promote financial services to Korean expatriates living in the United States. On appeal the Ninth Circuit split with its sister courts in the Sixth Circuit and Federal Circuit, as well as the Trademark Trial and Appeal Board (TTAB), and joined the Fifth and Seventh Circuits in holding that whether an altered trademark is the “legal equivalent” of a prior one is question of fact for whoever the trier of fact is—in modern cases since 1989, this is usually a jury.
The circuits all agree that whether tacking should be permitted is decided using the same test used for likelihood of confusion, the standard for determining infringement under trademark law. This tacking maxim was first established by the Court of Appeals for the Federal Circuit in Van Dyne-Crotty, Inc. v. Wear-Guard Corp. 926 F.2d 1156, 1159 in 1991.
However, as an initial matter, the circuits are spilt as to whether likelihood of confusion itself is either a matter of law, a matter of fact, or a mixed question of fact and law. As Respondent Hana Bank points out in its Supreme Court brief, where the likelihood of confusion test is a question of fact, some circuits also treat tacking as a question of fact. And while the majority of circuits hold that likelihood of confusion is a matter of fact for finding trademark infringement, Petitioner Hana Financial points out that district courts in these circuits have nonetheless followed Van Dyne-Crotty and use likelihood of confusion, a fact test in their circuit, to decide tacking as a matter of law.
So while the question presented appears to be narrow—is tacking a matter of fact or law—it will be interesting to see if the Supreme Court finds itself constrained in determining the tacking issue independent of whether, in the first instance, likelihood of confusion itself is a question of fact, law or a mixed question of law and fact. Indeed, during oral argument on December 3, 2014, Justice Kennedy briefly raised the issue with the Respondent, agreeing that while the issue was not before the Court, it remained “the elephant in the room.”
Solely based on the questions raised by the justices on both sides of the liberal/conservative divide, the Court appeared to be concerned about taking the tacking decision out of the hands of a jury at all. Justice Ginsberg questioned why a jury could not be properly be instructed on the law to follow, while Justice Scalia noted that judgment notwithstanding the verdict (JNOV) is available to the trial judge to overturn a jury decision where the law was improperly applied. So we will soon learn how the Supreme Court resolves this “tacky” situation.
A more expansive version of this article was published in the January 2015 Intellectual Property Newsletter of the Illinois State Bar Association.