As a practicing
attorney in the intellectual property field, it is not surprising these days to have a CEO of a foreign company or its
in-house counsel rush to our office to tell us a long story about what happened to their trademark, essentially that
it has been stolen. This article attempts to provide a basic outline of some of the questions which need to be
addressed in order to assist the foreign company to protect its trademark and commonly given
responses thereto.
I. Who did it?
In most cases, we find that either a former agent, employee, distributor or other related person who formerly
maintained a legal or business relationship with the original trademark owner is the guilty infringer.
II. What is the present situation?
Usually we find that the infringer, who originally had no rights to the mark, has already registered the trademark
in his name and is attempting to enforce his "trademark right" against the original trademark owner. Given this
situation, it should be noted that if the trademark has already been registered in Korea by such a person, the situation
should be taken very seriously.
Under the Korean Trademark Act, a trademark right is created only upon the registration thereof, and once registered, the trademark shall be presumed to be valid and effective until it is finally invalidated or cancelled through an invalidation or cancellation trial (Supreme Court, September 9, 1980, 77do387). As a result, the registered owner of the trademark (hereinafter referred to as the "Registrant") can take various legal methods against the original owner (hereinafter referred to as the "Owner") of the trademark (hereinafter referred to as the "Mark"), including a preliminary injunction and gross border measures.
III. What should the Owner do to assert its rights?
Of course, notwithstanding the fact that the Owner is the rightful owner of the Mark even prior to its registration
in Korea by the Registrant, the Owner may choose to purchase the Registrant's rights to the Mark by paying a large
amount of money to the Registrant. This may be the most efficient way to solve the problem, especially in
consideration of the time required to settle the matter through the use of legal procedures. However, there are
always some Owners who feel such a solution is greatly unjust and unfair and therefore, choose not to pay
even a cent to the betrayer while other Owners find it financially difficult to meet the excessive request of the
Registrant. The following is a brief review of the possible legal solutions which can be taken by these Owners:
A. Invalidation of the Trademark Registration
(i) Invalidation upon the Reputation of the Mark
Article 7 of the Korean Trademark Act prohibits a trademark registration of a mark: (i) which consists of a well
known name, trade name, portrait, signature, or any combination thereof owned by another person; (ii) which is
identical with or similar to a well known mark among consumers and used for products identical with or similar to
those under the well known mark; or (iii) which can create confusion with products or services of another party
which is well known and recognized among consumers. Therefore, if the Owner can prove that the Mark is a
well known and recognized brand used on the Owner's property at the time the Registrant filed his trademark
application for the Mark, the Owner, as an interested party, may request KIPO to invalidate the registration of the
Mark. However, although KIPO has more recently been inclined to apply a more flexible standard in its
determination of whether a mark is considered to be "recognized" among foreign brands sold in Korea, one must
still keep in mind that "recognized" status must be established among Korean consumers.(ii) Invalidation upon the
Relationship between the Registrant and the Owner Article 71.1.2 of the Korean Trademark Act permits invalidation
of a registered mark if the mark is registered in breach of an international treaty of which Korea is a member, and
Article 6-7 of the Paris Convention prohibits trademark registration of a Mark by the agent or representative
of the Owner without proper authorization.
Although it is difficult to find a specific case which clearly invalidated a trademark registration relying upon the above provision, the Supreme Court of Korea recognized such possibility by rejecting an Owner's invalidation claim based on the reason that the Registrant was not the agent of the Owner at the time it filed its trademark application (Supreme Court, November 25, 1986, 86Hu13). However, this protection under the Paris Convention is afforded only if the Owner has registered its Mark in a country which is a member of the Paris Convention.(iii) Invalidation based on Public Order and Public Morals Article 7.1.4 of the Korean Trademark Act provides another basis for invalidation as it prohibits a trademark registration which is in breach of public order and public morals. It may be argued that registration of the Mark when the Registrant clearly is aware that it belongs to the Owner is in breach of public order and morals and therefore, should not be permitted.
B. Cancellation of the Trademark Registration
The Mark can be subject to cancellation under the Trademark Act for various reasons. For example, a
trademark registration can be cancelled when the Mark has not been used for three consecutive years without
justifiable reason, when the Registrant permits use of the Mark by another third party without registration of a
license for more than 6 months, or when the Registrant uses the Mark in a different form without justifiable
reason, thereby creating confusion with products or services belonging to another third party. More
specifically, the Korea Trademark Act permits cancellation of a trademark registration within 5 years from the
registration thereof if the registration is made by the agent or representative of the Owner without authorization of the
Owner, insofar as the Registrant was the agent or representative of the Owner within one year before the filing of the
trademark application.
IV. Can court action be taken?
A. Preliminary Injunction
If the Registrant decides to take an action against the Owner's use of the Mark in Korea, the first step the Registrant
may take is to file an application for preliminary injunction and/or criminal complaint.
In 1995, the Supreme Court of Korea decided that if a trademark registration is made for the purpose of creating confusion with products or services of another party, such registration itself constitutes an act of unfair competition and therefore, the Registrant should not be allowed to exercise its rights over the Mark, which is nothing more than an abuse of the Trademark Act (Supreme Court, November 7, 1995, 94do3287). This judgment is very meaningful because it sets a new standard to change the long practice of the courts which automatically recognized the value and validity of a trademark once it was registered. Due to this 1995 judgment, if it is effectively asserted and proven that the Registrant registered the Mark by deceiving the Owner or at least with knowledge that the Mark is owned by the Owner, it is very likely that the Registrant's application for a preliminary injunction against the Owner will be rejected by the court.
In addition, if the Mark is a highly recognized one in Korea, the Owner can get a preliminary or permanent injunction against the Registrant, to prohibit the Registrant's use of the Mark in its business. Actually, following the above 1995 judgment of the Supreme Court, the Seoul High Court and Seoul District Court granted a preliminary injunction and permanent injunction filed by the Owners against the Registrants on the ground that the registration of the Marks by the Registrants themselves constitute acts of unfair competition (Seoul High Court, August 14, 1996, 95na42555 and Seoul District Court, November 8, 1996, 96gahap23158, respectively).
B. Criminal Complaint
The Trademark Act levies criminal punishment for trademark infringement activities upon accusations made by
the Registrant. Therefore, it is possible for the Registrant to file an accusation against the Owner for criminal
punishment. Once the Mark is registered in the Registrant's name, it is not so easy to persuade the prosecutor to
conclude that the Owner's use of the Mark is not an act of trademark infringement. However, this does not mean that it
is impossible. Since a recent 1995 Supreme Court judgment (Supreme Court 94do3287), the possibility has been
greatly increased.
Moreover, it is also possible for the Owner to accuse the Registrant based on a breach of the Unfair Competition Prevention Act for registering a Mark which is well known as the Owner's mark and thus creating consumer confusion on the products of the Owner.
V. What other Remedies are Available? - Trademark Transfer
There is no provision within the Korean Trademark Act or judicial precedent which clearly permits a trademark
to be transferred to the Owner where an agent or previous representative of the Owner has obtained a
trademark registration on the Mark. However, as mentioned above, the Paris Convention stipulates that in case
of unauthorized trademark registration by an agent or representative of the Owner, the Owner is allowed to be
assigned such trademark right insofar as the local law permits, and there is no clear provision under Korean
law which prohibits such trademark assignment. Therefore, we opine that the Owner can request the Registrant
to transfer all the rights to the Mark, without raising any invalidation or cancellation proceeding.
Once the Mark is invalidated or cancelled, there will be no trademark right over the Mark and the Owner should therefore start all the trademark registration procedures again to register the Mark. In light of that, it appears that rademark assignment is the most efficient way to protect the Owner and to resolve the registration matter simultaneously.
In conclusion, here are some general tips for the Owners. If you want to engage in a trade within Korea using your marks, register your marks in Korea first. In this regard, it should be noted that it is not required for the mark to be actually used in Korea for such registration. If your Korean trading party asserts that it is required for him to have rights or authorization to the trademarks for his business in Korea, make sure to register the trademarks in your name first and then as a second step grant a license to the Korean trading party. If, however, the Korean trading party insists that it is not enough, you should check the correctness of such assertion by consulting with local legal counsel. If you later discover that the Korean trading party has already effected a trademark registration in Korea over your marks, with or without your consent, you should not become discouraged, but rather get professional legal assistance before making any contact or beginning any negotiation with the Registrant.
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Writer : Boh Young Hwang Member of Korea & New York Bar LL.M. (Harvard 1993)
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