99Hu451 Nullification of Trade Mark Registration

by the Supreme Court of Korea

Justices Suh Sung (Presiding Justice), Lee Yong-woo, Bae Ki-won (Justice in charge), Park Jae-yoon

Main Issues

1. Whether an application for registration of a trademark that imitates a trademark that is neither famous or well-known falls under Article 7 Paragraph (1) Item 4 of the Trademark Act (hereinafter referred to as 'the TA') if the designated good is different from that of the cited trademark (negative) and whether cited trademark's being famous or well-known is being famous and well-known in Korea (affirmative)
2. A case which decided that application for registration of a trademark that imitates a cited trademark that is famous and well-known abroad, but not so in Korea for identical or similar goods, does not by itself warrant a conclusion that the registered trademark falls under Article 7 Paragraph (1) Item 4 of the TA

Summary of Decision

1. A trademark that is against public order or good morals as defined in Article 7 Paragraph (1) Item 4 of the TA refers to one which, by its composition or use on the designated goods, conveys a meaning or content that is contrary to public order, or good morals and customs of ordinary citizens. If the cited trademark is neither famous nor well-known, applying for trademark registration by imitating the cited trademark but for different goods does not in itself fall under Article 7 Paragraph (1) Item 4 of the TA. The cited trademark's being famous and well-known in this case means being famous and well-known in Korea.
2. Application for registration of a trademark that imitates a cited trademark that is famous and well-known abroad, but not so in Korea for identical or similar goods, does not by itself warrant a conclusion that the registered trademark falls under Article 7 Paragraph (1) Item 4 of the TA.

Reference Provisions

1. Article 7 Paragraph (1) Item 4 of the Trademark Act
2. Article 7 Paragraph (1) Item 4 of the Trademark Act

Article 7 Paragraph (1) Item 4 of the Trademark Act (Unregistrable Trademark)

(1) Notwithstanding the provisions of Article 6, the following trademarks shall be unregistrable:

1~3. <omitted>

4. Trademarks which are contrary to public order or morality

Reference Cases

1. Supreme Court Decision 96Hu2296 delivered on October 14, 1997 (Gong1997Ha, 3467), Supreme Court Decision 97Hu228 delivered on November 28, 1997 (Gong1998Sang, 107), Supreme Court Decision 97Hu1306 delivered on February 24, 1998 (Gong1998Sang, 908), Supreme Court Decision 97Hu3623 delivered on December 24, 1999 (Gong2000Sang, 309), Supreme Court Decision 97Hu860, 877, 884 delivered on April 21, 2000 (Gong2000Sang, 1293), Supreme Court Decision 99Hu2655 delivered on September 28, 2001 (Gong2001Ha, 2388)

[Plaintiff, Appellee] THE BURTON CORPORATION (Patent Attorney Hwang Eui-man, Counsel for plaintiff-appellee)

[Defendant, Appellant]Kim Dong-cheol (Patent Attorney Kim Young-hwa, Counsel for defendant-appellant)

[Judgment of the court below]Patent Court Decision 98Heo7301 delivered on February 11, 1999

Disposition

The judgment of the court below shall be reversed and the case shall be remanded to the Patent Court.

Reasoning

The grounds for appeal are examined as follows.

1. The judgment of the court below

On the premise that public order and good morals in Article 7 Paragraph (1) Item 4 of the TA means public good and social order, encompasses fair and reputable commercial practices and international order, and in that sense, includes such fair practices as contemplated in the TA, the Unfair Competition Prevention and Trade Secret Protection Act (the Unfair Competition Act), the Copyright Act, and tort laws, the court below held that filing a trademark application based on imitation of a trademark that is sufficiently well-known among domestic and foreign consumers, and which has accumulated intangible assets, such as business reputation and consumer recognition in the market through advertising and many years of consistent use, is a violation of the public order and good morals clause because it attempts to free ride on the established goodwill of the trademark for the purpose of engaging in unfair competition. This should be held to be against fair commercial practices under the TA or the Unfair Competition Act, as well as the general order of society. Also, from the perspective of trademark policy, the court below held that, if registration is allowed for imitated trademarks with the same effect and validity as duly registered marks, it may discourage development of original Korean brand names and trademarks and thereby erode the international competitiveness of Korean products abroad. Therefore, the court below held that it was proper to discourage registration of an imitation mark. Accordingly, the court below invalidated the registration of the trademark in this case on grounds of the following findings of facts: (i) the cited trademarks were so well-known that consumers in foreign countries such as the United States of America and Japan could recognize them as those of the Plaintiff at the time of the decision to grant registration for the trademarks in this case (applied for registration on June 26, 1993, assessment on October 18, 1996, and registered as of November 11, 1996, Reg. No. : 349780); (ii) the cited trademarks were famous and well-known and had accumulated intangible assets such as business reputation and consumer recognition in the market through 10 years of consistent use and advertising by Plaintiff (although it cannot be claimed that the cited trademarks were famous and well-known or were sufficiently recognizable as Plaintiff's trademark by domestic consumers in Korea at that time); (iii) the registered trademark in this case is an imitation mark of the cited marks; and (iv) the designated goods of the registered trademark in this case are mainly identical or similar to those of the cited trademarks.

2. Judgment of the Supreme Court

A trademark that is against public order or good morals as defined in Article 7 Paragraph (1) Item 4 of the TA refers to one that, by its composition or use on the designated goods, conveys a meaning or content that is contrary to public order, or the good morals and customs of ordinary citizens. If the cited trademark is neither famous nor well-known, applying for trademark registration by imitating the cited trademark for different goods does not in itself fall under Article 7 Paragraph (1) Item 4 of the TA. (See Supreme Court Decision 96Hoo2296, decided on October 14, 1997.) The cited trademark's being famous and well-known in this case means being famous and well-known in Korea.

Even though we adopt the facts and holding of the court below, we cannot conclude that defendant's application for registration of his trademark for the same or similar goods as the cited trademarks which the defendant's trademark imitated and which were famous and well-known in foreign countries does not by itself warrant an application of Article 7 Paragraph (1) Item 4 of the TA because, at the time of the registration assessment, the cited trademarks were not domestically famous and well-known or even sufficiently known to the extent that domestic consumers recognize the mark as that of the plaintiff.

Nevertheless, the court below took a different view and held that the registered trademark in this case fell under Article 7 Paragraph (1) Item 4 of the TA solely based on the reasons stated in its opinion. We find that the court below erred by misinterpreting Article 7 Paragraph (1) Item 4 of the TA, and thus, defendant's ground for appeal which points out this issue is justified.

3. Therefore, the judgment of the court below shall be reversed and the case shall be remanded to the court below for retrial and determination. This decision is delivered with the assent of all Justices who heard the appeal.

Source

• Supreme Court Decision 99Hu451 delivered on July 9, 2002, Supreme Court Library of Korea