The Supreme Court recently rendered a decision that a third party’s sales could be acknowledged as “another person use of trademark” of Korean Trademark Act (hereinafter, “KTA”) Article 34(1)(20).[1] (Supreme Court Case No. 2022Hu10289, March 9, 2023)

 

Case Background

The Defendant (a Spanish company) had been selling its sanitary products (e.g., sanitary pads, sanitary tampons) bearing its mark “” (hereinafter, “prior mark”) in Spain via its online homepage.

The Plaintiff (a Korean company) entered into a Korean sales agreement with the defendant and imported and sold the defendant’s products bearing the prior mark multiple times in 2017. The defendant and plaintiff were indicated as “manufacturer” and “importer” on packages of the imported products. Further, the plaintiff stated on its website that it was the official importer of the defendant’s products. In the course of the business, the plaintiff filed a trademark application for the word mark “ ” on September 11, 2017, which matured to registration in December 24, 2019.

The defendant filed an invalidation trial against the plaintiff’s trademark registration on March 9, 2020, on the basis of Korean Trademark Act Article 34(1)(20).

Summary of Decision

The purpose of Article 34(1)(20) is to disallow the registration of a trademark when a person, who is not entitled to obtain the trademark registration, applies for the registration of a trademark identical or similar to another’s prior mark which it was aware of through contractual relationship with the other, in violation of the principle of good faith in their relationship with the other.

In principle, the prior mark should be a trademark that is intended for use or is in the process of being used domestically.
Even if a genuine owner of the prior mark had merely affixed the prior mark on its products in a foreign country and had never used the mark by itself or via agents in domestic market, the prior mark falls under a “trademark used by another person” as defined in Article 34(1)(20) in the relationship with a third party, provided that the genuine owner sold its products to the third party, anticipating distribution in the domestic market and they were distributed domestically without any change of the prior mark and packages.

Considering the facts that (i) the plaintiff had a business relationship with the defendant prior to the trademark application, (ii) the defendant exported its products bearing the prior mark from abroad for distribution domestically and (iii) the defendant made the plaintiff sell the products domestically with the prior mark displayed exactly as it was, it can be reasonably concluded that the plaintiff violated the principle of good faith by applying for and obtaining the registration of a trademark identical or similar to the prior mark for identical or similar goods.

Therefore, the subject registration should be invalidated under Article 34(1)(20).

Significance

This judgement holds significance as the first Supreme Court ruling to clarify the territorial and subjective criteria for the condition “another person uses or intends to use the trademark” as defined in Article 34(1)(20).

In the judgement, it is clearly stated that another person’s trademark must be in use or in the process of being used domestically.

Further, the Supreme Court clarified that Article 34(1)(20) can be applied even if a genuine owner of prior mark does not necessarily use the trademark directly or through an agent in the domestic market under the certain conditions.

The judgment is considered significant for many foreign companies that export their products to the Korean market through third parties who merely import and sell them without necessarily engaging directly or through agents.

 

[1] Article 34 (Trademarks Ineligible for Trademark Registration)

(1) Notwithstanding Article 33, none of the following trademarks shall be registered:

20. Any trademark for the registration of which an applicant applies on goods, which is identical or similar to such trademark, while he or she is aware that another person uses or intends to use the trademark through a contractual relationship, such as partnership or employment, or business transactional relationship, or any other relationship.