Trademarks: Let the Jury Decide
Does the U.S. Supreme Court have a trademark? It certainly has its own seal: Check out the cool legal eagle on supremecourt.gov. Regardless of whether it's a trademark, however, the eagle has reason to look proud of its uniqueness right now. The court, which very rarely hears trademark cases, is making two exceptions this week. Yesterday, the issue was how much the courts should defer to the examiners in the Patent and Trademark Office, in a technical case that I'm going to spare you.
Today's case is both simpler and more fun -- and it involves the fascinating question of whether a trademark should count if it originates in a foreign language.
The case grows out of a controversy between two Korean financial institutions based in the U.S., Hana Bank and Hana Financial Inc. In 1994, before Hana Financial existed, Hana Bank advertised the services of what it called the “HANA Overseas Korean Club,” an entity that would allow Koreans living in the U.S. to remit funds to family or friends in Korea. The ads were printed in the Korea Times, one of the most important national Korean-American newspapers, which is published in Korean.
The advertisement referred multiple times in Korean to hana eunhaeng -- which translates as “Hana Bank.” The word “hana” means “one.” At the bottom of the ad was a nifty logo of a dancing man, styled to look a bit like the character that stands for the H sound in the Korean alphabet. (See the upper left corner of the bank’s webpage.) Almost the only English in the whole ad was a reference to "HANA Overseas Korean Club."
Hana Financial was founded a few weeks after the ad first ran. In 1996, it trademarked a pyramid logo with the name Hana Financial in capital letters beneath. Things stood for a decade, during which time no one seems to have minded that there were two financial institutions using one name. But in 2007, Hana Bank decided to enter the Los Angeles market. Hana Financial sued, claiming infringement on its trademarked name.
Here's where things get interesting. Hana Bank defended the suit by saying it had used the name “Hana Bank” first in its 1994 ads. Under a special trademark doctrine known as “tacking,” the user of a trademark can maintain that trademark even if the details of the mark have changed, so long as the marks are indistinguishable to consumers. Hana Bank pointed to the entirety of its 1994 ad and claimed the name Hana Bank had been anticipated there.
Hana Financial objected. It pointed out that in English, the 1994 ad referred only to the HANA Overseas Korean Club -- which sounded like a different thing. Sure, the logo and the Korean words for "Hana Bank” were there, but they were irrelevant because they weren’t in English.
The judge decided to submit the question of whether tacking had occurred to the jury. The jury found that the mark had been in continuous use since the 1994 ad. Presumably the jury was concluding, very sensibly, that the words hana eunhaeng in Korean were functionally identical to the words “Hana Bank” in English. Hana Financial, however, was not quite done. It appealed to the U.S. Court of Appeals for the Ninth Circuit and then, when it lost, to the Supreme Court.
Its argument is twofold. First, says Hana Financial, the question of whether two marks are similar enough to count for tacking purposes is not a question of fact for the jury but a question of law to be decided by a judge. Second, if indeed the similarity is a question of law, Hana Financial maintains that the words "HANA Overseas Korean Club" as a matter of law cannot be sufficiently similar to the words "Hana Bank" to count as the same indistinguishable mark. In essence, Hana Financial’s second argument is that the Korean language use of the name in 1994 shouldn't count.
The Supreme Court agreed to review the case to decide whether tacking should be an issue for the jury or the judge, not to address the language issue. But the language question is not only much more interesting -- it also points the way to the correct answer for the question the justices face today.
The place to begin is by noticing that it would be wrong to interpret the trademark law so as to exclude tacking a trademark first expressed in one language and then later in another. The relevant audience in trademark law generally, and in the tacking inquiry in particular, is the consumer. We want to know whether consumers would consider the two expressions the same.
Here, the target consumers were Korean-Americans sending money back to Korea -- which is why the 1994 ads were only published in Korean and printed in a Korean-language newspaper. Those consumers were assumed to be bilingual, as the ad suggested by its brief use of English. Indeed, Hana Bank knows its bilingual consumers so well that it has continued to use the same dancing man logo in both Korean and English. And the logo really only makes sense if you know that it looks like the Korean character for H.
Who would do the best job of determining whether consumers would or wouldn't recognize a trademark as indistinguishable? Not a judge, who might be caught up in formalism and worry that only the English words should matter. A jury would have the common sense to recognize, as the Los Angeles jury did, that the ads were aimed at Korean speakers. When it comes to trademark law, the technicality should matter much less than the intuitive sense of 12 men and women. After all, they're all consumers themselves.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Noah Feldman at firstname.lastname@example.org