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Argument analysis: Justices coast through argument on trademark “tacking”

The second of the Court’s trademark cases this week was Hana Financial, Inc. v. Hana Bank. The case considers the ability of a trademark user to “tack” the priority of an early mark onto the priority of a later mark. The doctrine typically involves the interrelation among three marks: a senior user’s original mark, a junior user’s intervening mark, and the senior user’s revised mark. When tacking is permitted, it allows the senior user to use the priority date of its original mark for both the original mark and the revised mark. What that means is that the senior user can stop the intervening user from using its mark if the intervening mark would confuse consumers when compared either to the original mark or to the revised mark. All agree that the appropriate legal test is whether the senior user’s original and revised marks create the same “commercial impression” to consumers. The question for the Justices is whether that is a question of law (for the judge) or a question of fact (for the jury).

Petitioner Hana Financial needs this to be a question of law – because a jury ruled against it, concluding that Hana Bank’s original mark (essentially, Hana Bank in Korean) had the same commercial impression as its new mark (Hana Bank in English). Respondent Hana Bank, by contrast, wants this to be a question of fact – so that the jury’s ruling in its favor will end the dispute.

The most marked thing about the argument Wednesday morning was the steady progression, through the course of the presentation of Paul Hughes (on behalf of Hana Financial) as the Justices, one after another, made it clear that they could not accept Hana Financial’s contention that tacking is a purely legal question.

Things started to go downhill early for Hana Financial when Hughes proffered an example from a well-known case: the senior user’s old mark was American Mobile Phone; the junior user’s mark was American Paging; the senior user’s new mark was American Mobile Phone Paging. Hughes argued that the Federal Circuit properly concluded that tacking was inappropriate but that a jury well might have concluded that “American Mobile Phone” and “American Mobile Phone Paging” created the same impression based on the similarity of the words.

Chief Justice John Roberts and Justice Antonin Scalia joined in their rejection of that hypothetical. Both thought that the only real question was whether the jury was given the same information as the Federal Circuit. Because Hughes’s hypothetical seemed to depend on not telling the jury about the intervening user, the Chief Justice and Justice Scalia criticized the hypothetical vigorously.   The Chief Justice for example, commented: “What you’re saying is the jury might get it right or the jury might get it wrong, and I would say, well, the Federal Circuit maybe got it right or the Federal Circuit got it wrong. But in terms of what the factual issues are going to be …. It seems to the jury has got the [same] information [as] the Federal Circuit.”

Similarly, Justice Scalia retorted:

Well, it seems to me the question for the jury is not whether they look alike, but whether they create the same commercial impression. And it seems to me the instructions to the jury would say these are the two marks, now what you ought to know is that after the first mark there was a competitor who came into commerce called American Paging, and then the mark was changed from American Mobile Phone to American Mobile Phone Paging. Do you think that the second mark creates a different commercial impression than the first one? And I think a jury would say heck [sic] yes.

At that point, several of the Justices picked up on the problem of what considerations are relevant to assessing the propriety of tacking. That discussion also turned sour for Hughes. Justice Anthony Kennedy, for example, apparently recalling Neal Katyal’s Tuesday argument in B&B Hardware v. Hargis Industries, thought that the dispute couldn’t be reduced to a simple comparison of the two marks in the abstract. He was convinced that consumer reaction to the mark must be “critical,” emphasizing “the consumer’s knowledge, the consumer’s expertise, knowing how consumers behave, how consumers think. This is immensely valuable.” I would at that point have to mark Justice Kennedy down as pretty plainly a lost cause for Hana Financial.

Other Justices hastened to display their strong predisposition to reject what Hughes had to say. First, Justices Sonia Sotomayor and Ruth Bader Ginsburg challenged the idea that it makes sense for a judge to be assessing consumer impression.   In that vein, Justice Sotomayor asked “[h]ow is the judge supposed to know what a consumer’s impression would be generally? . . . . Just figure it out?” Justice Ginsburg followed even more pointedly:

Claim construction is construction of a written instrument. That’s the kind of thing that judges do all the time. But to determine whether . . . the magic words “same continuing commercial impression to consumers,” . . . then the ones that are better equipped to make that determination are people who are consumers, not jurists.

As she put, the key question in her mind was “aural or visual appearance to . . . the people likely to buy these products, not the judge.”

In turn, taking the discussion back to the points they had made at the beginning of the argument, the Chief Justice and Justice Scalia offered their reasons for thinking juries were well-equipped to assess commercial impression. First, even more skeptical than before, the Chief Justice tried to pin Hughes down as to why a jury couldn’t be instructed to consider the proper factors: “What is it that you think a jury could not be instructed on in addressing that same consideration?”

When Hughes shifted ground from problems with instructions to the need for consistency – which he associated with judicial decision making – Justice Scalia exploded. Looking directly at Hana Bank’s brief – always a bad sign for a Justice to be reading to you from your opponent’s brief – he asked Hughes: “Do you think consistency appears in the judicial opinions that have treated this as a question of law?” When Hughes tried to defend his view that existing decisions are consistent, Justice Scalia opened up Hana Bank’s brief and pointed to the images the bank had reprinted from earlier cases and says “I cannot for the life of me decide why the one should be permitted and the other should not be permitted. . . . . And I’d much rather blame it on the jury than on the court.”

With the Chief Justice and Justices Scalia, Kennedy, Ginsburg, and Sotomayor apparently set on affirmance, the Justices seemed to settle back in their chairs and wait for the lunch break. Indeed, most of the questioning in the arguments of Carlo van den Bosch (for respondent Hana Bank) and Assistant to the Solicitor General Sarah Harrington (for the federal government) involved questions about how to phrase an apparently inevitable opinion affirming the view of the court of appeals that tacking is a question for the jury. The general ennui was underscored by van den Bosch’s decision to sit down long before his time had elapsed.

This is a case where I’m inclined to accept the approach Edward Lee has been pressing at ISCOTUSnow – that the party that gets the fewest questions is most likely to prevail. I don’t think that’s always true. The trademark argument on Tuesday, for example, in which Neal Katyal received far more questions than his opponent, well might be a case in which the Justices were asking lots of questions because they were deeply engaged in what counsel had to say. As I posted yesterday, I think that case is much harder to call than this one but I’d still be surprised if the Justices don’t end up accepting the argument of the advocate to whom they posed the most questions. But that is something that we presumably will find out only when the cherry trees start to blossom in the spring.

Recommended Citation: Ronald Mann, Argument analysis: Justices coast through argument on trademark “tacking”, SCOTUSblog (Dec. 4, 2014, 10:53 AM),