The Supreme Court of Korea has issued a landmark decision establishing a new judicial standard for trademark dilution under Article 34(1)(xi) of the Korean Trademark Act. The decision (Case No. 2020Hu11943) focuses on the potential for dilution of a well-known trademark through the blurring or tarnishment of its distinctiveness or reputation. This case is particularly significant as it marks the first time the Supreme Court of Korea has established clear criteria for assessing the likelihood of dilution of a famous trademark.

Case Background and Issues

The case involved LEGO Juris A/S (“LEGO”), the owner of the well-known “LEGO” trademark and LegoChem Bioscience Inc. (“LegoChemBio”), a Korean biopharmaceutical company which filed a trademark including the term “LEGO” as part of “LEGOCHEMPHARMA”(“subject mark”). LEGO argued that the use of the subject mark would dilute the distinctiveness or reputation of its well-known “LEGO” mark, despite the addition of the term “CHEM.”

LegoChemBio, however, contended that “Lego chemistry” was widely used in the pharmaceutical industry to describe methods of pharmaceutical synthesis and was therefore a non-distinctive term in relation to the designated goods. They argued that the adoption of “LEGOCHEM” in the subject mark was justified due to the descriptive nature of “Lego chemistry.”

Under the Korean Trademark Act, trademarks that cause a “likelihood of confusion” regarding their source are already regulated. However, Article 34(1)(xi) specifically addresses scenarios where the distinctiveness or reputation of a famous trademark might be diluted, even in the absence of consumer confusion. This provision aims to safeguard the economic value and unique identity of well-known trademarks.

Supreme Court’s Criteria for Trademark Dilution

In its decision, the Supreme Court clarified that “likelihood of impairing distinctiveness” under Article 34(1)(xi) refers to the risk of damaging the unique association with a specific source, i.e., the function of indicating a single unique source, held by the well-known trademark.

The Supreme Court outlined key factors for assessing whether a trademark might be at risk of causing dilution: i) the degree of similarity of the compared marks; ii) the degree of recognition and distinctiveness of the well-known trademark; iii) whether the applicant of the registered trademark intended an association between the registered trademark and the well-known trademark; and iv) whether the actual association occurs between the registered trademark and the well-known trademark.

Applying these factors to the subject case, the Court found that the “LEGO” portion of the subject mark carried significant distinctiveness, while the accompanying terms “CHEM” and “PHARMA” were either descriptive or had limited distinctiveness concerning the designated goods. Consequently, the marks were considered similar in terms of their appearance and pronunciation.

The Court further recognized the high level of distinctiveness and global reputation of the mark “LEGO”. It also concluded that LegoChemBio likely intended to evoke an association with the well-known “LEGO” mark, as “Lego chemistry” could not be regarded as a commonly used academic term in the field of chemistry to mean “medicinal synthesis techniques.”

Additionally, the “LEGO” portion leaves an impression on consumers, leading them to recall or associate it with the subject mark. Therefore, the Court determined there was a high likelihood of actual association between the subject mark and LEGO’s trademarks.

As a result, the Court decided that the use of the subject mark on its designated goods may dilute the distinctiveness of the well-known prior-used trademarks, namely their function of indicating a single source.

Significance

This decision has profound implications for the protection of famous trademarks in Korea. It expands the scope of trademark protection, allowing trademark owners to block registrations that, while not directly causing consumer confusion, could still erode the distinctiveness of their brand.

This case serves as a critical reference for future trademark disputes in Korea, encouraging vigilance among trademark owners and offering clearer guidelines on dilution standards.