APAA 54th Council Meeting – Adelaide 2007

Trademark Committee

Korean Group Report

Jeong Won Lee

Yoon Chae

Kwan Ho Shin

I.Legislation, Regulations and Treaties

A number of significant amendments to the Korean Trademark Act (“KTA”) were made by the Korean National Assembly during a plenary session held on December 8, 2006; and the revised Law will be promulgated on July 1, 2007 and go into effect at the time of promulgation.

A most notable change in the recent revision lies in the recognition of the “prior user’s right”, as a solution to the dilemma of protecting the interest of an innocent prior user within the framework of the first-to-file system. This and other major changes are highlighted below.

Expansion of Eligible Trademarks

With the rapid development and increasing use of various new marketing tools, there has been a growing need to expand the protectable scope of trademarks to encompass such non-traditional marketing or advertising means as images in motion, hologram signs, single color or color combination marks, etc. In response to the growing need, therefore, the new Law declares that “all visually recognizable representations” are amenable to trademark protection.

In this connection, in order to register a single color mark or trademarks consisting solely of colors, it would be necessary to establish, through submission of evidentiary materials, that the color or color combination has acquired secondary meaning among the general Korean consumers.

To register a motion or hologram mark, it is additionally required to submit one to five still shots of the motion or hologram, together with a description of the trademark.

Statutory Measure to Prevent Registration of Pirated Marks

Article 7(1)(xii) of the current KTA, designed to guard against the registration of pirate applications, reads: “A mark that is identical with or similar to a trademark prominently recognized in Korea or abroad as an indication of a specific source, and which is used to obtain unjust profits or to inflict harm on a particular person may not be registered.” The revised provision has excised the word “prominently” therefrom.

The enactment of this provision in 2004 was considered an important step forward to protect the interests of genuine trademark proprietors against pirate applicants, because Article 7(1)(xii) was supposed to provide a statutory basis for rejecting pirate applications even when the copied marks were known in foreign countries only.

However, the requirement of “prominent recognition” has sometimes been an insurmountable hurdle for some trademark owners in preventing the registration of pirate applications that clearly copied their own trademarks. To ameliorate the problem, therefore, the word “prominent” has now been deleted, to thereby relieve the burden of establishing the prominent status of the fame.

With the revision made to Article 7(1)(xii), therefore, it is expected that the chances of successful registration of copied marks will be significantly reduced.

Prior User’s Right Recognized

Since Korea has maintained a very strict first-to-file system, there have been instances where innocent prior users fell victims of trademark enforcement by those who have first registered the same mark.

This system, coupled with the lack of a complementing mechanism such as recognition of prior user right or adoption of trademark dilution theory, has encouraged ill-motivated individuals to file pirate applications for famous or not-so-famous marks in anticipation of earning unjust financial gains from the genuine trademark proprietors.

To exacerbate the problem, the five-year statute of limitations for invalidating trademark registrations has served to only strengthen the negotiating leverage of those who have pirated others’ marks.

To rectify the anomaly, therefore, Article 57ter,newly established in the revised KTA, recognizes the right of a prior user or his assignee to continue to use the mark which has been registered by a third party, when (1) there has been a bona fide and continued use of the trademark by the prior user (and/or his assignee) within Korea prior to the filing date of the third party application; and (2) to such an extent that the trademark has been recognized among Korean consumers as an indication of a specific source as of the filing date of the third-party application.

The owner of the registered trademark or his exclusive licensee, however, may request the prior user to attach an indication to prevent any confusion between the registrant’s goods and the goods of the prior user.

Preemptive Period Extended for the Successful Petitioner of a Non-use Cancellation Action

Under the current KTA, when a registered trademark is finally and irrevocably canceled through a non-use cancellation action, the successful petitioner is given a period of three (3) months as a preemptive or exclusive period for filing his own mark that is identical with or similar to the canceled mark.

There has been a criticism that this three month period can be unrealistically short, particularly when a plurality of non-use cancellation actions have been brought against different registrations for clearance purposes, and when the decisions to cancel these registrations are reviewed by different tribunals and, as a result, become final and conclusive on different dates.

Recognizing the onus, the preemptive period given to the successful petitioner of a cancellation action will now be extended to six(6) months.

Expansion of Conversion among Applications

Under the current KTA, conversion of applications is allowed only between trademark and service mark applications. With a view to making the system more user-friendly, the revised Law will make it possible to convert among different categories of applications and, therefore, trademark and service mark applications can now be converted not only amongst themselves but also to, e.g., collective mark applications. Further, supplemental application (to designate additional goods to existing application/registration) and renewal applications can now be converted to regular trademark/servicemark applications while maintaining the benefit of the initial filing dates thereof.

Opposition Time Window Widened

The time period for filing an opposition against a published trademark will be extended from the current 30-day period to a two (2) month period from the date of publication. While the period for filing a pre-registration or post-registration opposition is generally 2 to 3 months in most jurisdictions, Korea has maintained the 30-day inextensible opposition time limit, which has often been criticized for being too short.

The extension has been made to encourage more active use of the opposition system, to thereby minimize or prevent potential trademark disputes at an early stage.

Reimbursement of Application Fee

When a trademark application is withdrawn or abandoned within one(1) month from the date of filing, the official fee can be reimbursed upon a timely request (i.e., within one (1) year from the receipt of a notice issued by the KIPO that the applicant is entitled to a refundment due to the withdrawal or abandonment of his application) made to the KIPO under the revised Law.

II. Trademark Usage –Infringementversus Non-Use

How do they compare?

Where applicable, for the sake of this discussion, we understand that the underlying preposition for most of the suggested questions is that the registered trademark does not exactly cover the goods appearing in each question, in which event it is obviously an infringement and acceptable evidence of use in non-use cancellation proceedings.

  1. Use of CD record’s title identical to another person’s registered trademark

Under the Korean trademark practice, titles of CD records or books are considered to function as a trademark, provided that they have inherent distinctiveness. There is still some controversy but this is the widely accepted notion and, also in reality, a number of titles are being filed annually as TM applications and registered. Especially, if the CD record is a continuation album of a previous title, it is more likely to function as a trademark. This analogy would be applicable to other printed or digital media such as books, DVDs, etc.

Therefore, if A uses the phrase “UNDER THE SUN” as a CD title while B has a trademark registration for the same phrase designating CD jacket, such use is likely to be in infringement. By the same logic, if B produces and sells a CD jacket bearing the “UNDER THE SUN” mark, such evidence will be accepted in a potential non-use cancellation action.

In connection with this question, we would like to the following issue for our further discussion:

A’s movie or TV show is released to the public and, before it became famous, B filed TM applications for the movie title or TV show. The applications all have matured into registrations. Can B exercise his trademark rights against A, in the event A publishes books bearing the same titles?

  1. Use of a design mark on the whole front of T-shirts which is identical with another person’s registered trademark

The established position of Korean courts is that where such design mark purely performs the function of “ornamentation” or “decoration”, such third party use should not be actionable since it does not function as a trademark which is primarily an “indication of the source of goods”.

More recent decisions dictate that whether a certain design element is used in the trademark context or in the design context is not necessarily mutually exclusive. Considering the recent development of recent fashion industry where more design elements are used to indicate the source of the goods and more trademarks are transformed into designs, it is really difficult determine how certain design elements are perceived by general consumers.

Therefore, the conclusion is that where the seemingly ornamental design does function as a trademark as well, it is an infringing use. If it is purely ornamental, it is not infringing. How the function of such design element should be determined can be a tricky test; the court should take various factors (i.e., relationship with the goods, the size, location of the design element and how it is combined with other word elements, fame of the registered mark being compared, the intent of the user and how he came to adopt the design mark, etc.) should all be taken into consideration.

  1. Use of a mark on free gifts such as tissue which is identical with another person’s registered trademark

In the famous CASS case where the local beer manufacturer distributed T-shirts bearing the mark “CASS” as a free gift, the court found no infringement since the trademark on the T-shirts was used in connection with “beer” and it was by no means used as in indication of source of the T-shirts itself. Therefore, we may tentatively reach a conclusion that free gifts are considered to be used in connection with the main goods the gifts are distributed for.

However, would the court have reached the same conclusion if a shoes manufacturer distributed a free T-shirt infringing other person’s registered trademark right? Probably not. Obviously, there should be objective reasons enabling consumers to believe that mark used on the gift was in fact used in connection with the main goods.

  1. Use of another person’s registered trademark for the purpose of notifying the usage of the goods (e.g., ink jet for CANON)

This is a hot issue among the manufacturers of compatible ink cartridges. To the extent that another person’s mark is used solely to indicate the usage of the product (such as the name of the ink company or the model name of certain printers), it is not considered infringing. However, if the use goes beyond such criteria to the level where it may be perceived as a source indicator of the product itself by consumers, it is infringing.

In determining whether certain usage is within a tolerable scope, the size, location of the trademark, whether the stylization of the mark was exactly adopted and whether other trade dress elements are also present in the package should all be taken into consideration.

  1. Use on recycled and revived goods without removing its original registered mark

If the original registered mark is not removed, it amounts to an unauthorized use of the registered trademark and, therefore, is infringing.

  1. Use of a mark in the case where the mark is used not as a trademark but as a name of ingredients of food

If, for instance, a frozen pizza shows the “Velvetta”trademark indicating that it used Velvetta cheese, or a snack has “Blue Diamond”trademark indicating that it used almonds from Blue Diamond growers, it would not be an infringing use to the extent that they are not used to indicate the source of the final food products.

However, if the use of the ingredient is unduly highlighted or the mark is otherwise used with an obvious intent to free-ride on the fame of the ingredient mark, it may violate other laws that regulate advertising.

  1. Use of another person’s trademark as a back ground scenery of his/her own advertisement.

To the extent that another person’s trademark was not advertised or indicated as the source of his/her own goods, it does not constitute trademark infringement (95 Kahap 3529 “CASS” case)

If somebody uses his/her trademark as background scenery of his/her advertisement and then later claims that it was a trademark use, such claim would hardly be accepted to the extent that the scenery was merely an advertisement and would not be considered as an indication of the source of the person’s goods.

  1. Operating a website using the domain name with the indication of the mark on the relevant goods and services on the website

Since this type of use is highly likely to create confusion regarding the source of the goods or services, it is considered as an infringing use. The confusion results from the website operator indicated the mark in connection with the relevant goods and services on his website.

If we look at “amazon.co.jp” case, this name is obviously used not only as the domain name itself, but is also displayed on the screen when the user enters into the site. This should be considered a trademark use and, therefore, an infringing use of the registered trademark.

  1. Trademark use on the Internet in the case the server exists outside of the jurisdiction while the purchasing of the goods and services are available in the relevant jurisdiction on the Internet

Since the purchase of the goods and services are available in the relevant jurisdiction, it would constitute trademark infringement. However, there can be issues arising in connection with proper jurisdiction in infringement actions.

In a non-use cancellation action, there is no ground to negate the justification of such use as proper evidence of use since the indication of the source, selling and purchasing of the trademarked goods and the advertising activities all take place within the relevant jurisdiction.

  1. Indication of another person’s mark on a comparative advertisement

In most comparative advertising scenario, it is quite unlikely that a mere use of another person’s mark could constitute infringement unless there is any confusion with respect to the source. However, if use of another person’s famous trademark could result in damaging the distinctiveness or renown of the trademark, such use may become actionable under the Unfair Competition Prevention Act (“UCPA”).

“Trademark Use - Infringement versus Non-Use - How Do they Compare?”

Country: Korea

Features of Trademark Indication
/
Infringement
/ Proper Use
In Non-Use
Cancellation Action / Remarks
1. Use of CD record's title identical to another person's registered trademark / O / O
2. Use of a design mark on the whole front of T-shirts which is identical to another person's registered trademark / X / X

3.Use of a mark on free gifts such as tissue which is identical to another person's registered trademark

/ X / X
4.Use of another person's registered trademark for the purpose of notifying the usage of the goods (e.g. "Ink jet for CANON") / X / O
5.Use on recycled and revived goods without removing its original registered mark / O / O
6. Use of a mark in the case where the mark is used not as a trademark but as a name of ingredients of food. / X / X
7. Use of another person's trademark as a back ground scenery of his/her own advertisement / X / X
8. Operating a website using the domain name with the indication of the mark on the relevant goods and services on the website / O / O
9. Trademark use on the Internet in the case the server exists outside of the jurisdiction while the purchasing of the goods and services are available in the relevant jurisdiction on the Internet / O / O
10. Indication of another person’s mark in a comparative advertisement / X / X