This entry is an update on a previous blog entry (link to December 5, 2014 entry called “Trademark Case All Trademark Attorneys and Litigants Need to Watch”) regarding the United States Supreme Court’s pending decision in the case entitled B&B Hardware, Inc. v. Hargis Industries, Inc., et. al. Recently the Supreme Court announced its ruling in this case. The main issue in this case is whether a finding regarding “likelihood of confusion” entered by the United States Patent and Trademark’s Office’s Trademark Trial and Appeal Board (“TTAB”) can preclude subsequent decisions on the same issue by United States district courts.
The answer is yes. Specifically, the Supreme Court found that “[s]o long as the other ordinary elements of issue preclusion are met, when the uses adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply” to the issue of likelihood of confusion. This means that issue preclusion does not always apply. Issue preclusion will apply where a mark is used in the marketplace in a materially same manner as the usage(s) identified in the trademark application. However, where a mark is used in the marketplace in ways that are materially unlike the stated usages in the application, the TTAB will not be considering the same likelihood of confusion issue as the United States district court since “actual usage in the marketplace is the paramount issue” in a United States district court proceeding. This distinction is important as Justice Ginsburg in her concurring opinion stated that “for a great many registration decisions issue preclusion will obviously not apply,” since TTAB decisions involve “a comparison of the marks in the abstract and apart from their marketplace usage.” The Supreme Court also provided further guidance by finding that “trivial variations between the usages set out in an application and the use of a mark in the marketplace do not create different ‘issues . . .’” Thus, merely adding an immaterial feature to a mark will not defeat the application of issue preclusion.
This decision is monumental. However, it does leave some important questions unanswered such as whether preclusive effect will be given to other issues and whether this decision will require broader discovery in TTAB cases going forward. We will be monitoring the legal implications that arise from the Supreme Court’s decision and considering the effects for our existing clients.
Santucci Priore, P.L.
Last week the Supreme Court decided its first substantial trademark case in over ten years. Hana Financial, Inc. v. Hana Bank is a trademark infringement action involving the “tacking” of trademarks. Tacking is “a rule that allows the owner of the mark to make slight changes in the mark, without losing the priority that the trademark owner has based on the date when it first started using the original mark.” The emphasis is on what the court calls a “continuing commercial impression.” Generally, tacking involves three trademarks, the original “senior” trademark, a second “junior” trademark unrelated to the first mark, and a third, modified version of the senior trademark. When tacking is applied, the modified senior user’s mark is allowed to claim the priority date of its original mark, even though the mark has been changed in some way. But tacking can only be applied when there is a “legal equivalent”, meaning the two marks create the same, continuing commercial impression to consumers.
In this case, the mark “Hana” was first used by Hana Financial in 1995. Hana Bank did not use the Hana Bank mark until 2002, but argued that it could “tack” the Hana Bank mark to its 1994 mark “Hana Overseas Korean Club” and “Hana Bank” in Korean. A jury decided that Hana Bank could tack the mark to its original use of the mark in 1994. Hana Financial appealed, arguing that tacking is a question of law for a judge to decide, but the Ninth Circuit held that “whether two marks may be tacked for purposes of determining priority is a question for the jury.”
The question presented to the Supreme Court is whether tacking is a question of law to be decided by a judge, or whether it is a question of fact to be determined by a jury. The Supreme Court unanimously decided that a jury can apply the tacking doctrine, reaffirming the lower court’s decision that the jury is best equipped to decide issues of an ordinary consumer’s impression.
This decision reiterates the importance of the jury. Justice Sotomayor explained “we have long recognized across a variety of doctrinal contexts that, when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decisionmaker that ought to provide the fact-intensive answer.”
 Ronald Mann, Opinion analysis: Justices, yet again, remind courts of appeals of importance of juries in IP cases, SCOTUSblog (Jan. 21, 2015, 4:30 PM), http://www.scotusblog.com/2015/01/opinion-analysis-justices-yet-again-remind-courts-of-appeals-of-importance-of-juries-in-ip-cases/
 Ronald Mann, Argument analysis: Justices coast through argument on trademark “tacking”, SCOTUSblog (Dec. 4, 2014, 10:53 AM), http://www.scotusblog.com/2014/12/argument-analysis-justices-coast-through-argument-on-trademark-tacking/
 Hana Financial, Inc. v. Hana Bank, et al., 574 U.S. ____ (2015).
Paloma Z. Coelho
Santucci Priore, P.L.
Fort Lauderdale attorney Michael I. Santucci, who is a managing partner of Santucci Priore, P.L, and Daniel Devine of Santucci Priore P.L., helped settle a federal lawsuit regarding intellectual property rights owned by Ernest Evans, the legendary musical artist commonly known as “Chubby Checker.”
Chubby Checker is best known for his hit song “The Twist” which rose to #1 on Billboard Magazine’s “Hot 100” singles chart. In 2008, “The Twist” was selected by Billboard as the #1 all-time song on its “Hot 100” 50th anniversary chart. “The Twist” inspired an international dance craze in the early 1960’s, and is still popular in dance parties around the world. The legendary musician has reached a settlement with Hewlett-Packard Company and Palm, Inc. over a lawsuit filed in the Northern District of California in February 2013.
In October 2006, Palm users through the Hewlett-Packard App Catalog were able to download “The Chubby Checker” app which allowed users to estimate the size of a man’s penis based on his shoe size. According to the Complaint, Mr. Evans claimed that Hewlett-Packard and Palm had “full knowledge of the icon-status of Mr. Evans and Plaintiffs’ famous Chubby Checker marks” when it offered the app for sale. HP denied such claims, but U.S. District Court Judge William Alsup allowed the case to continue, noting that he found it unlikely that the musician would have consented to license his name to such a product. In the agreement filed with the Court, HP denied liability but agreed not to make any future use of Mr. Evans’s stage name, trademarks and service mark, including “Chubby Checker”, “Chubby Checker’s Snacks King of the Twist Food Products”, “Chubby Checker’s New York Twist” or any other registered mark.
Mr. Santucci commented that the “matter was resolved to the mutual satisfaction of all parties.” Chubby Checker continues to make music and tour around the country.
Mr. Evans was represented by Michael I. Santucci and Daniel Devine of Santucci Priore, P.L. in Fort Lauderdale, Florida and Mr. Willie E. Gary of Gary Williams Parenti Watson & Gary P.L.
Photo Credit: Flickr User firmleague