INTRODUCTION
One of the most frequent IPR problems facing U.S. businesses in Korea is trademark protection. Unlike the trademark registration system in the United States, which is based on "first commercial use" or "first intent to use", the trademark registration system in Korea is based on "first-to-file", or more accurately, first to successfully register with the Korea Intellectual Property Office (KIPO).
If a U.S. company is considering entering the Korean market it is highly advisable that the U.S. company register their trademark first before an unauthorized party has the opportunity to register the trademark. The company will save much time, energy, resources and legal fees in the long run. Since registration of trademarks is in Korean, in order to successfully register a trademark, the U.S. company should hire a qualified local attorney who is familiar with registration procedures. To have maximum effect, a company should be prepared to register its trademark in every applicable product class category for the product(s). Should the trademark be challenged, protection is not generally provided under the Korean legal system if the company has not registered in the relevant product class category.
Both the United States and Korea are members of the Madrid Protocol, which allows companies from the member nations to apply for trademark ownership in several member nation countries simultaneously. In Korea, a U.S. company can register their trademark and patents with KIPO. Foreign applicants are required to retain a licensed local attorney in order to prepare applications in Korean and to conduct necessary follow-up correspondence locally. Enforcement of legally registered copyrights, trademarks and patents are under the jurisdiction of the Prosecutor's Office in Korea.
The 1998 Trademark Act provides KIPO with grounds to reject third-party applications of the same or similar trademarks if KIPO is convinced that the registration is done in "bad faith." As capable as trademark examiners can be, some trademark registrations by unauthorized registrants have slipped through the cracks and have been successfully registered. Registration by an unauthorized party can include "predatory registration" (i.e., knowing that the mark belongs to another company, the unauthorized applicant registers the mark, with no intention of using it but rather to sell the trademark registration when the legitimate trademark owner tries to enter the Korean market).
In such cases, because the Korean legal system is based on "first to file", and because the unauthorized registrant successfully registered with KIPO, the unauthorized registrant is the legal owner of the trademark in Korea—even if it is the U.S. company’s mark and the American company has been using it in international business for several years. Provided that the mark was not used commercially by the successful but unauthorized registrant in Korea for the previous three years, the U.S. company can file a Cancellation Action petition to cancel the existing mark. If the cancellation action is successful and there is no appeal, the U.S. company can immediately file to register the trademark with KIPO, thereby reclaiming the trademark.
The most contentious scenario takes place when an unauthorized trademark application has been successfully registered with KIPO, and the party is actually using the U.S. company's trademark commercially in Korea. In this case, the legal remedy available is an Invalidation Action. An invalidation action petition can be filed anytime during the course of the 10-year life of a trademark, provided the unauthorized registrant is actually using the trademark. The American company's petition should outline why the unauthorized trademark owner's registration should be voided (invalidated), i.e. that the American company is the legitimate and original trademark owner, and that consumers know the trademark to be associated with the U.S. company.
If the company follows either the invalidation or cancellation action routes, the burden of proof lies with the petitioner. U.S. companies should be prepared to provide documentation showing commercial use (include samples of the product and illustrating the uniqueness of the trademark and product), to substantiate financial investment in advertisements (include all examples of actual advertisements or promotional materials that appeared in the media), even to provide results of any surveys that show that the brand name is publicly recognized in Korea and that the company is the source of the legitimate goods promoting the trademark.
Provided that the company and their attorneys put forth a convincing argument with meticulously documented details as to why the company is the legitimate trademark owner, the company has a good chance of winning the case before the KIPO Trial Board. However that may not be the final hurdle since there is an appeals process for cancellation and invalidation actions from the KIPO Tribunal Board to the Korean Patent Court and finally to the Supreme Court of Korea. The rule of thumb for a trial date is first come, first served --- petitions are filed by date with the trial dates occurring in order of the date of petition.
Unlike successful cancellation actions where the company may file for the trademark immediately with KIPO, successful invalidation actions have a one-year moratorium from the invalidation action date before a U.S. company can officially register a trademark. However, US companies can seek enforcement measures from the date of invalidation of the Korean registration.
An alternative approach is to settle out of court. Due to the length of time it takes to go from the KIPO Tribunal Board to the Korean Patent Court and all the way up to the Korean Supreme Court, some companies decide not to wait to re-claim their trademark. Four years or more is not unheard of for a final decision using the legal process and even then there is no guarantee that the U.S. company will be successful. Because the opportunity cost of not entering the Korean market can be considerable, some companies have opted to settle out of court, i.e., to buy their own trademark back from the unauthorized (but legal) registrant for use in the Korean market. Regardless of the approach taken, good legal counsel is essential.
COVERAGE – WHAT IS PROTECTED.
Article 6: Trademark registration may be obtained except in the following cases:
| (i) | where the mark consists solely of a sign indicating, in a common way, the usual name of the goods; |
| (ii) |
where the mark is customarily used on the goods; where the mark consists solely of a sign indicating, in a common way, the origin, quality, raw materials, efficacy, use, quantity, shape (including shape of packaging) or price of the goods, or the method or time of manufacturing, processing or using them; |
| (iii) | where the mark consists solely of a sign indicating a conspicuous geographical name, an abbreviation of a conspicuous geographical name or a map; |
| (iv) | where the mark consists solely of a sign indicating, ain a common way, a common surname or name of a legal entity; |
| (v) | where the mark consists solely of a very simple and commonplace sign; |
| (vi) | in addition to the cases mentioned in subparagraph (i) to (vi), where, as a result of using the trademark before the application for registration under Article 9, consumers are easily able to recognize the person whose goods are indicated by the trademark, the trademark may be registered with the designated goods for which the trademark has been used; the same applies to designated goods and supplementary designated goods as defined in Articles 10(1) and 47(2)(iii). |
Article 7: Unregistrable Trademarks
(1) Notwithstanding Article 6, trademark registration may not be obtained in the following cases:
| (i) |
Trademarks that are identical or similar to the
following: the national flag, the national emblem, as well as colors, medals, decorations or badges of the Republic of Korea; national flags or emblems of foreign nations; medals, decorations or badges of the countries party to the Paris Convention for the Protection of Intellectual Property (referred to as "the Paris Convention") or of the members of the World Trade Organization or of the contracting parties to the Trademark Law Treaty; titles or marks of the Red Cross, the Olympic organizations or well-known international organizations; titles or marks that are identical or similar to seals or signs of the Republic of Korea or of countries party to the Paris Convention and the members of the World Trade Organization; contracting parties to the Trademark Law Treaty or the public organizations of these that are used for indicating supervision or certification; |
| (ii) | trademarks that falsely indicate a connection with, or that criticize, insult or are liable to defame, any nation, race, ethnic group, public organization, religion or well-known deceased person; |
| (iii) | trademarks that are identical or similar to well-known marks that indicate a nonprofit business of a State, a public organization or its agencies or public corporations, or a nonprofit public service; however, this provision does not apply where a nonprofit business of a State, a public organization or its agencies or public corporations, or a nonprofit public service apply to register such marks as their business emblems; |
| (iv) | trademarks that are contrary to public order or morality; |
| (v) | trademarks comprising a mark that is identical or similar to a medal, certificate of merit or decoration awarded at an exhibition held by or with the authorization of the Government of the Republic of Korea or at an exhibition held by or with the authorization of the government of a foreign country, unless a person who has been awarded a medal, certificate of merit or decoration has used it as part of the trademark on the same goods for which the medal, certificate of merit or decoration was awarded at the exhibition; |
| (vi) | trademarks containing the name, title or trade name, portrait, signature or seal, famous pseudonym, professional name or pen name of well-known persons, or an abbreviation of these, unless the consent of the person concerned has been obtained; |
| (vii) | trademarks that are identical or similar to another person’s registered trademark when the registration was applied for before the filing date of the trademark applications concerned and when the trademarks are to be used to goods identical or similar to the designated goods; |
| (viii) | trademarks that are identical or similar to another person’s trademark (excluding a registered collective mark for a geographical indication) when not more than a year has elapsed since the date on which the trademark right expired (that is the date on which a trial decision became final for a trial decision invalidating a trademark registration) and when the trademarks are to be used on goods that are identical or similar to the designated goods; |
| (ix) | trademarks that are identical or similar to another person's trademark when that other person’s trademark is well known among consumers to indicate or resemble the other person’s goods, and when the trademarks are used on goods that are identical or similar to such goods; |
| (x) | trademarks that are liable to cause confusion with the goods or services of another person because consumers easily recognize the trademark as designating the goods or services of the other person; |
| (xi) | trademarks that are liable to mislead or deceive consumers on the quality of the goods. |
| (xii) | trademarks that are identical or similar to a trademark that consumers inside or outside the Republic of Korea easily recognize as indicating the goods of a particular person, and which are used to obtain unjust profits or to inflict harm on a particular person and son. |
| (xiii) | trademarks that consist solely of three-dimensional shapes that are essential for securing the functions of goods, or their packagings, that require trademark registration. |
| (xiv) | trademarks that consist of geographical indications or include geographical indications of the origin of wines or spirits in a member state of the World Trade Organization, and which are used for wines, spirits or other similar goods. However, this provision does not apply if a legitimate user of a geographical indication applies to register a collective mark for a geographical indication under article a(3) of this act and the relevant goods are the designated goods. |
(2) Where a trademark falls under paragraphs (1)(vi), (ix) and (x) of this Article, the respective provisions do not apply if the trademark does not fall under the respective subparagraphs when applying for trademark registration.
(3) Where a trademark falls under paragraph (1)(vii) and (viii) of this Article, the respective provisions apply if the trademark falls under the respective subparagraphs when applying for trademark registration (or if the registered trademark of another person is invalidated under Article 71(3)), unless the owner of the trademark and the applicant for registration of the trademark (referred to as "the applicant") are the same person after filing the application.
(4) Paragraph (1)(viii) of this Article does not apply to the following cases:
| (i) | where the registered trademark has not been used for more than one year retroactively from the date on which the trademark right was extinguished; |
| (ii) | where a rightful applicant applies to register the trademark, after a decision on invalidation or revocation becomes the final because the registered trademark violates paragraph (1)(vi), (ix),(x) and (xii) of this Article or Articles 8 or 73(1)(vii); or |
| (iii) | where an applicant applies to register the trademark after the period of six months as prescribed in Article 43(2) has elapsed without applying to renew the term of the registered trademark. |
(5) Where a trial for the cancellation of a trademark registration is requested under Article 73(1)(ii),(iii),(v) to (ix) and where any of the following subparagraphs occurs after the date of requesting the cancellation trial, the owner of the trademark right and any person using the trademark may not obtain trademark registration for a trademark that is identical or similar to a registered trademark extinguished with respect to goods that are identical or similar to the designates good of the extinguished registered trademark, unless three years have elapsed since the day on which each of the following subparagraphs occurs:
| (i) | where the trademark right has been extinguished because the term has expired; |
| (ii) | where a person with the trademark right abandons the trademark right or some of the designated goods; or |
| (iii) | where the trial decision on the cancellation of a trademark registration has become final |
LEGISLATION
Download the Trademark Act by clicking on the link below.
Unfair Competition Prevention and Trade Secret Protection Act
Semiconductor Integrated Cicuit Law-Out Design Act
Protection Under Treaty
Korea is a member of the trademark-related multinational treaties listed below.
• Nairobi Treaty on the Protection of the Olympic Symbol
• Madrid Agreement for the Repression of False and Deceptive Indications of Source on Goods
TRADEMARK REGISTRATION PROCEDURES
During the course of trademark registration, information on pending applications initially becomes available in publications of the Korea Invention and Patent Association two to three months after the initial application. Official announcements of pending applications are published for comment by KIPO in its Official Gazette. Generally, U.S. companies hire a local attorney and ask the firm to look into the status of the company's trademark in Korea.
Sometimes, the U.S. company discovers from the aforementioned publications that an unauthorized party has already filed the trademark and is awaiting registration. In this case the company is eligible to file an Opposition Action Petition within a 30-day period of official publication. In an opposition action petition, the company states their case as to why the unauthorized party's application should be rejected during the course of initial review. After reviewing the opposition action petition, KIPO can decide either to proceed with registering the unauthorized trademark application or to reject the trademark application, clearing the path for the U.S. company to register at a later date.
Go to "trademark registration procedures" to view steps on registering your trademark.
ENFORCEMENT APPROACHES – HOW TO ADDRESS INFRINGEMENT
What Constitutes as Trademark Infringement
• An act of using a trademark identical with the registered trademark of another person on goods identical with the designated goods for which the trademark is registered.
• An act of using a trademark identical with the registered trademark of another person on goods similar to the designated goods for which the trademark is registered.
• An act of using a trademark similar to the registered trademark of another person on goods identical with the designated goods for which the trademark is registered.
• An act of using a trademark similar to the registered trademark of another person on goods similar to the designated goods for which the trademark is registered.
Reporting an Infringement
To report an infringement, contact the KIPO Anti-Counterfeiting Center at 82-42-472-0121 or fax them at 82-42-472-3465.
"STOP!"(Strategy Targeting Organized Piracy) Program
"STOP!"(Strategy Targeting Organized Piracy) Program
Hiring a law firm
Click on the link below to view a list of law firms.
Civil Remedies
(a) Injunction against Infringement
(i) The owner of a trademark right can request a person who is infringing or is likely to infringe on his trademark right to discontinue or refrain from such infringement.
(ii) The owner of a trademark right who is acting under the above paragraph (ⅰ) can demand the destruction of the infringing articles, the removal of the facilities used for the infringement, or other measures necessary to prevent the infringement.
(b) Claim of Compensation for Damages from Infringement
Under Civil Law, the owner of a trademark right can claim compensation from a person who has intentionally or negligently infringed the trademark right for damage caused to him by such infringement.
For damage estimation in this compensation claim, the expected profit per single legitimate good multiplied by the sold quantity of infringed goods can be presumed as the damage amount.
(c) Other Available Remedies
Upon request of the owner of a trademark right, the court can, in lieu of damages or in addition thereto, order the person who has injured the business reputation of the owner of the trademark right, by intentional or negligent infringement of the trademark right, to take necessary measures to restore the business reputation of the owner.
In addition, the owner of a trademark right can claim restitution of unjust profits under Civil Law.
Criminal Sanctions
Any person who has infringed a trademark right is subject to imprisonment not exceeding seven years or to a fine not exceeding one hundred million Korean Won.
Where a representative of a legal entity or an agent, an employee or any other servant of a legal entity or a natural person has committed an infringement of a trademark right, the legal entity or the natural person, in addition to the offender, is sentenced to a fine under the above paragraph.
Protection of Unregistered, Well-known Trademarks
In respect to well-known trademarks, the owner of a well-known trademark which is not registered with the Korean Intellectual Property Office is given indirect support under the Trademark Act by preventing others from obtaining a trademark registration for an identical or similar mark. The owner, however, is not entitled to take action against infringement of his unregistered trademark under the Act.
• an application for the registration of a trademark which is identical with, or similar to, a previously approved trademark which is well known among consumers as indicating the goods of that other person, and which is used on goods that are identical with, or similar to, the second applicant's goods will be rejected:
• an application for the registration of a trademark which is liable to cause confusion with goods or services of another person because the trademark is recognized among consumers as designating the goods or services of that other person will be rejected:
• an application for the registration of a trademark which is identical with, or similar to, a trademark which is recognized by customers in or outside of the Republic of Korea, and which is used for the purpose of obtaining unjust profits or inflicting harm on the particular person will be rejected.
Trademark Dispute Resolution Process
MARKET ENTRY PLANNING
At a minimum, American companies that plan to enter the Korean market in the future should monitor KIPO public notices to ensure that their trademark has not been registered. Since the public notices are only in Korean, if the U.S. company cannot monitor the situation from America, the company should consider hiring someone in Korea, such as an attorney, who can.
Also, when registering for a copyright, trademark, or patent, US companies should maintain control of their intellectual property even if they request their Korean agent to do the processing. This control is particularly relevant should the Korean-American partnership dissolve. In such previous cases where the Korean agent maintained control of the intellectual property, long, costly legal battles have ensued. The legal system is structured on an appeals process which takes a minimum of three to four years in the courts should a case go to the Supreme Court of Korea or to the Supreme Civil/Criminal Court. Again, even then, there is no guarantee that the US party would win. U.S. companies are urged to do their due diligence when choosing a potential Korean partner to avoid legal disputes and hefty legal fees.
Useful Links
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