Doctrine of Tacking Key in Trademark Win for Defendant Hana Bank
Last week, I wrote an article discussing the disputed Cracker Barrel moniker in use by Kraft Foods Group, Inc. and Cracker Barrel Old Country Store. In it, I noted “if you want to avoid unnecessary and costly legal action, make sure your brand is unmistakably yours.” A court decision released in late November drove home that statement.
Hana Financial, Inc. (HFI) filed a complaint on March 8, 2007 against Hana Bank alleging trademark infringement on account of the Korean word “hana” present in both companies’ name. On its surface, the case appears simple. If HFI acquired a federal trademark registration before Hana Bank did, then they have priority to the mark. Yet the case is significantly more convoluted and tangled than a cursory glance suggests.
In response to the 2007 complaint, Hana Bank sought to nullify HFI’s trademark. The district court granted summary judgment to Hana Bank as a result of its trademark priority. However, the appeals court reversed this judgment, remanding the case and pushing the district court to oversee a jury trial. Under the doctrine of tacking, the jury sided with the Bank, and the appeals court affirmed the jury’s application of tacking. Here is the opinion.
But how exactly did we get here?
Two crucial elements came into play that led the Court of Appeals for California’s Ninth Circuit to affirm the district court’s ruling granting trademark priority to the defendant, Hana Bank: first, the timeline of using the “hana” mark, and second, a narrow, seldom-used doctrine known as tacking.
First, we discuss the timeline of events. Hana Bank was established in 1971 under the name of Korea Investment Finance Corporation (KIFC) as a company limited to Korea. In 1991, KIFC changed its name to Hana Bank. HFI, on the other hand, was established in 1994 as a California-based company, three years after KIFC changed its name to Hana Bank. Just prior to the establishment of HFI, Hana Bank began extending its services to Korean Americans including those in parts of California, advertising its services under the names “Hana Overseas Korean Club” (HOKC) and “Hana Bank”.
A year later, HFI began using their “hana” name in Korean media outlets, securing a federal trademark registration the following year in 1996. As a result, two companies employing the “hana” name and offering financial services to Korean American clients now possessed trademarks. However, unlike HFI and Hana Bank, the United States transplant and Hana Bank subsidiary, HOKC, did not possess a separate trademark for its name. Hana Bank had deliberately done this, assuming the trademark of the highly similar “dancing man” logos used by both it and HOKC could be “tacked” on to HOKC from Hana Bank, granting both of them trademark protection under a single registration.
As both companies grew, HFI worried that consumers would become confused by the similar names and services and understand HFI and Hana Bank to be one and the same. Viewing their procurement of a trademark over a decade ago as superior legal positioning, HFI sought redress for the confusion in 2007. Unfortunately for HFI, the trademark world does not operate the same way as the patent world: priority is not quite as simple as “first to file”.
This brings us to the second point: tacking. As outlined by the district court,
A party may claim priority in a mark based on the first use date of a similar but technically distinct mark where the previously used mark is the legal equivalent of the mark in question or indistinguishable therefrom such that consumers consider both as the same mark. This is called “tacking.” The marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked.
HFI promoted the argument that the Hana Bank and HOKC logos were dissimilar enough such that application of the doctrine of tacking would be improper. Further, HFI stated that HOKC had abandoned the dancing man logo in “1999 or 2000” when its name changed to “Hana World Center”. Both arguments were dismissed by the district court, paving the way for a jury to side with Hana Bank on account of tacking. Thus, with the most recent affirmation of the jury’s tacking application by the court of appeals, Hana Bank was granted trademark priority for HOKC over HFI.
It is presently unclear whether HFI plans to further appeal this judgment, but I will end this entry the same way I began it. “Make sure your brand is unmistakably yours,” lest you be left with large attorney fees and a headache.
Law Clerk at
JAFARI LAW GROUP®, INC.