Yesterday, the U.S. Supreme Court issued its unanimous decision in Hana Financial, Inc. v. Hana Bank, No. 13-1211, slip op. (S. Ct. Jan. 21, 2015), ruling that juries are to decide whether two trademarks may be "tacked" for the purposes of determining priority. This decision is the Supreme Court's first substantive trademark ruling in the past decade.

In the United States, the first party to use a mark (the "prior user") generally is entitled to trademark rights. Therefore, in trademark disputes, each party generally wants to establish that it is the prior user. The doctrine of "tacking" permits a user to tweak or modernize its mark without losing priority. Under this doctrine, a party may "tack" the use of an older mark onto a newer mark for purposes of determining priority. However, tacking applies only where the newer mark creates the same commercial impression as the older mark. Due to this strict standard, tacking arguments are not made frequently and do not often succeed.

In Hana, the Supreme Court resolved a circuit split regarding whether a court or a jury should determine if tacking applies. California-based Hana Financial, Inc. sued Korean-based Hana Bank for trademark infringement. Hana Bank denied infringement, asserting priority based on its use of an older mark. The jury decided that the tacking doctrine applied and returned a verdict in favor of Hana Bank. The Ninth Circuit affirmed, holding that tacking is a question of fact for the jury. Hana Financial appealed to the Supreme Court.

The Supreme Court upheld the Ninth Circuit ruling. Because the test for tacking relies upon ordinary consumers' understanding of the commercial impression of the trademark, the Court held that juries are better suited to decide the fact-intensive issue. However, the Court did not go so far as to state that tacking is a question of fact. Instead, it acknowledged that the "legal equivalents" test was an "application-of-legal-standard-to-fact sort of question." Nevertheless, the Court found juries should decide these mixed questions of law and fact.

The Supreme Court dismissed Hana Financial's concerns that juries are unequipped to handle the question of tacking and this approach would create inconsistency. "[D]ecisionmaking 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."

Now that trademark tacking is a question for juries, parties may experience greater costs at trial. Fact-intensive inquiries can require parties to present additional evidence, such as consumer perception surveys, which may be costly and time-consuming. Additionally, this decision is likely to extend litigation; questions of law generally get resolved much earlier.

Because parties infrequently assert the tacking doctrine, Hana only directly affects a small subset of trademark cases. However, Hana may have a significant impact on the current circuit split regarding whether judges or juries decide the issue of "likelihood of confusion" — the central question in many trademark cases. In its opinion, the Ninth Circuit noted that "[a]lthough the other circuits have not decided the issue yet, the district courts in circuits where likelihood of confusion is a question of fact also treat tacking as a question of fact." Hana Financial, Inc. v. Hana Bank, 735 F.3d 1158, 1164 n.5 (9th Cir. 2013). The Supreme Court's opinion was notably silent on this issue.