APAA e-Newsletter (Issue No. 21, February 2021)

Supreme Court Recognizes Foreign Fame and Bad-Faith Intent in Cervélo Case

DJ Lee and Somi Lim, Yoon & Yang (IP) LLC (Korea)


The “Cervélo” marks are used for bicycles made by the Canada-based bicycle manufacturer Cervélo S.A. (later acquired by the petitioner; both Cervélo S.A. and the petitioner are referenced as “the petitioner” hereinafter). Since 1996, products featuring the cited marks have been available through dealers in the United States, Canada and other countries worldwide at high prices. However, when the company was acquired by a Dutch company in 2012, most of its internal data, including sales and advertising materials, were lost.

Sunghan Kim, a Korean individual, commenced importation and distribution of bike products that were made and sold by the petitioner, and that bore the cited marks, in the Korean market around 2002. Following his February 6, 2004 registration of a business under the name Velo Sports Asia, he started selling bikes imported from the petitioner either directly or through a network of dealers.

Bo Hee Kim, a Korean individual, applied to register the subject mark “cervelo” on March 14, 2006, and it was successfully registered on January 18, 2007.

As the application for the mark was filed on March 14, 2006, the former Trademark Act was applied. At the time, it was necessary to show that an imitated mark was “significantly” well-known as a source identifier of a specific person or entity by consumers in or outside of the Republic of Korea.


On March 16, 2005, Sunghan Kim filed a Korean trademark application for “Cervelo” designating bikes, etc., without the consent of the petitioner. Upon discovering this, the petitioner arranged a trustee agreement with Sunghan Kim. Under the agreement, Kim was forbidden from registering the petitioner’s Cervélo mark in his name and was obliged to assign the right in the concerned trademark application/registration to the petitioner or to a party designated by the petitioner at the petitioner’s request. The trademark application for “Cervelo” by Sunghan Kim was granted registration on January 4, 2006. However, the right to the mark expired on May 6, 2006, due to a failure to pay the registration fee.

The petitioner proceeded to file a cancellation proceeding against Bo Hee Kim for non-use of the subject mark on March 17, 2015. It was found that Sunghan Kim had used the subject mark in the capacity of a licensee and consequently, the action was dismissed. Through the proceedings, the petitioner learned in 2017 that Sunghan Kim was the younger brother of Bo Hee Kim.

The Intellectual Property Trial & Appeal Board (IPTAB) and the Korean Patent Court rejected the invalidation of the case on the grounds that the cited marks were not well known abroad, but did not rule on the intent of the applicant.

Supreme Court Decision

Based on additional evidence submitted by the petitioner, the Supreme Court found that Cervélo had in fact gained substantial recognition in the U.S. and Canada by March 14, 2006, the date that the subject mark was filed by Bo Hee Kim. The Supreme Court justices concluded that the subject mark was filed in bad faith and therefore should be invalidated.

The Court wrote:
Based on the years of sales, advertisements and press articles related to products featuring the cited marks and the like, the cited marks can be seen as having gained substantial recognition among consumers in the U.S. and Canada, where the relevant bicycles were sold, by the March 14, 2006 filing date of the subject mark.

Also, considering the strong degree of recognition of the cited marks, the similarity between the subject mark and the cited marks, the aforesaid trustee agreement between the petitioner and Sunghan Kim, the relationship between Sunghan Kim and Bo Hee Kim, and the circumstances surrounding the application of the subject mark, we reach the conclusion that Bo Hee Kim filed the subject mark in bad faith, with such intention as to cause damage to the petitioner, who has the legitimate right to use the mark.


The implication of this case is that it has become easier to invalidate marks filed in obvious bad faith. The petitioner in this case had a great deal of foreign fame evidence to support its claim of being “significantly” well-known, as required by law based on the filing date of the subject mark.

Having said that, the present law is applied to marks filed after 2007 and eliminates the requirement that a mark be “significantly” well known. In other words, the requisite degree of foreign recognition is much lower than before, and it is sufficient as long as the imitated mark is recognized as a source identifier.