IP Law Daily, TRADEMARK—9th Cir.: Jury reasonably decided that bank could “tack” use of earlier “Hana” mark to show priority, (Nov 25, 2013)

By Thomas Long, J.D.

A jury’s determination that a Korean bank had priority over a California financial services company as the first to use the mark “Hana” has been upheld by the U.S. Court of Appeals in San Francisco (Hana Financial, Inc. v. Hana Bank, November 22, 2013, Callahan, C.). The jury was properly instructed on the doctrine of “tacking” and could have reasonably determined that tacking applied to establish priority in the Korean bank’s mark.

A party claiming trademark ownership must establish priority in the asserted mark; that is, it must establish that it was the first to use the mark in connection with the sale of goods or services. One way priority may be established is through the constructive use doctrine of “tacking,” which allows a party to tack the date of the user’s first use of a mark onto a subsequent mark to establish priority when the two marks are so similar that consumers would regard them as being the same.

Both parties used the word “Hana” in their names and offered financial services in the United States. Translated from Korean, the word “hana” means “number one,” “first,” “top,” or “unity.” The defendant, Hana Bank (“the Bank”) was a Korean entity established in 1971. It adopted its current name in 1991. In May 1994, the Bank began offering services in the United States, establishing the “Hana Overseas Korean Club” (“the Club”). The Club’s target customer base consisted of Korean Americans living in the United States. In 2000, the Bank changed the Club’s name to “Hana World Center.” In 2002, the Bank began operating an agency in New York under its own name.

The plaintiff, Hana Financial, Inc. (“HFI”) was a California corporation that was incorporated in 1994. HFI began using its “Hana Financial” mark on April 1, 1995.

In 2007, HFI filed suit against the Bank, alleging that the Bank’s use of its “Hana Bank” mark infringed HFI’s “Hana Financial” mark. A jury trial commenced on May 24, 2011. At the close of evidence, HFI moved for judgment as a matter of law, arguing that the Bank had presented “no evidence” on priority. The motion was denied.

The jury found that the Bank had started using its mark in commerce in the United States prior to April 1, 1995 and had used the mark continuously since that date. HFI renewed its motion for judgment as a matter of law and moved for a new trial. These motions were denied. HFI appealed.

The priority issue turned on whether it was permissible for the jury to find that the Bank could tack its use of its present “Hana Bank” mark to its use the “Hana Overseas Korean Club” mark beginning in 1994, the appellate court said. The doctrine of tacking applied only in “exceptionally narrow circumstances,” and the fact that the current mark contained a portion of the earlier mark was not, in itself, sufficient to establish tacking. The tacking analysis required examination of the marks in their entireties to determine whether each conveyed the same commercial impression. Commercial impression should be determined from the perspective of the ordinary purchaser, looking not only to the aural and visual similarities of the marks, but also to a range of evidence, ideally including consumer surveys.

Reasonable minds could differ on whether the Bank’s marks were materially different, the appellate court said. In isolation, the phrases “Hana Overseas Korean Club,” “Hana World Center,” and “Hana Bank” seemed aurally and visually distinguishable. The names did not necessarily convey that these entities offered the same services. There was no survey evidence showing that that the marks conveyed the same commercial impression.

However, as the losing party in a jury trial, in order to prevail on its motion for judgment as a matter of law, HFI was required to show that the only reasonable interpretation of the evidence was that the marks were materially dissimilar, the court said. HFI failed to satisfy that standard.

The evidence showed that the Bank offered financial services to Korean-speaking American consumers. It advertised in Korean-language newspapers, and its ads displayed the name “Hana Overseas Korean Club” in English next to its “Hana Bank” mark in Korean. It continuously used the same distinctive “dancing man” logo in all of its ads. Its application forms contained similar information. The ordinary purchasers of the Bank’s services were likely to have been aware of the Bank from their experiences in Korea, the court said.

Based on this evidence, the jury could have reasonably concluded that the ordinary purchasers of the financial services at issue were likely to have had a consistent, continuous commercial impression of the nature and origin of the Bank’s services. In the context in which the Bank’s marks were used, the word “Hana” arguably was the most significant feature. Use of “Hana” in English script was likely to cause purchasers to translate the Korean mark as “Hana Bank,” rather than “One Bank” or some other possible translation. Consequently, the court determined, there was sufficient evidence to support the jury’s verdict on trademark priority.

The case is No. 11-56678.

Attorneys: Steven E. Shapiro (Kim, Shapiro, Park, & Lee) for Hana Financial, Inc. Carlo F. Van den Bosch (Sheppard Mullin Richter & Hampton LLP for Hana Bank.

Companies: Hana Financial, Inc.; Hana Bank; Hana Financial Group

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