Introduction

The Supreme Court of Korea recently issued a landmark decision that said that the use of a valid trademark registration could still amount to trademark infringement. The latest ruling shows the court’s strong adherence to the fundamental principle of trademark law in Korea: the first-to-file rule, which grants priority to a senior right. The ruling underscores the importance of early trademark registration.

Case Background

An individual, “A,” registered the “ ” mark for computer software-related goods and services in 2014. In 2015, a company, “B,” launched a computer database restoration service using the “DATA FACTORY” and “ ” (a Korean transliteration of “DATA FACTORY”) marks.

A filed a trademark infringement lawsuit against B in 2016 seeking a permanent injunction against B’s unauthorized use of the “DATA FACTORY” marks and damage compensation.

During the trial proceedings, B filed the “” mark for similar goods and services and managed to register it despite A’s opposition. Also, B argued that its use of the “DATA FACTORY” marks was legitimate at least after the registration of the “ ” mark.

Summary of Decision (Supreme Court Decision No. 2018Da253444, rendered on March 18, 2021)

The main issue in this case is whether the use of an infringing mark is legitimate if the mark is registered.

Previous Supreme Court rulings held an affirmative view, because the law dictated that a registered mark should be protected until it is invalidated.

However, the Supreme Court overturned its past decisions and ruled that using a registered mark that infringes a senior trademark right constitutes trademark infringement, regardless of whether the registered mark had been invalidated or not.

In issuing its decision, the court pointed out that granting priority to a senior right is the backbone of the Korean trademark law system. This precept is represented by the first-to-file rule and Article 92 of the Trademark Act, which holds a trademark registrant responsible for getting consent (to use a mark) from the holder of previously filed intellectual property rights (previously created copyrights) if the rights conflict with each other.

Based on the above, the court concluded that B’s unauthorized use of the infringing marks rendered it liable for trademark infringement for the periods before and after the “ ” mark was registered.

Significance

The latest Supreme Court decision is significant because it demonstrates the court’s strong inclination to protect a senior right.

The decision has also re-confirmed the importance of early filings based on the first-to-file rule and the limited scope of protection given to prior-used marks. Lax registration of an infringing mark can no longer shield potential violators from trademark infringement claims. As long as a trademark owner possesses a registered mark with a filing date preceding that of a registered infringing mark, they would now be able to enforce and protect their trademark right.

It is also worth pointing out that there was some controversy over whether “DATA FACTORY” is sufficiently distinctive for computer software-related goods and services. Its distinctiveness was denied by the Korean Intellectual Property Office but acknowledged by the courts.

With the stronger emphasis on the first-to-file rule and considering that there is no disclaimer system in Korea, it is advisable to file potentially non-distinctive marks as early as possible, after combining them with other distinctive elements if necessary.