Case Background and Issues

Company A is the owner of a trademark registration for the mark “Device+010PAY” for designated goods “downloadable computer programs, application software for mobile phones, etc.” in Class 9. Company A launched its mobile application and registered it on the Google Play Store. Company A indicated the registered mark on the application and provided consumers with information related to the application on its publicly accessible website. Further, although the application does not require any payment for downloading, users must make a deposit to fully utilize the services provided by the application.

Company B provided financial services, namely, prepaid electronic payment transaction services in a non-face-to-face and automated manner to users via a smartphone application in the name of “010PAY”.

Company B filed a non-use cancellation trial against the Company A’s registered mark on July 30, 2021. Company A filed a trial to confirm scope of rights claiming that the Company B’s use of a similar mark in its electronic financial transaction app and check cards falls within the scope of its trademark right on September 6, 2021.

The key issue addressed in the above trial cases is whether the use of a trademark in a smartphone application can be recognized as a source identifier, both in terms of trademark infringement and a non-use cancellation trial, and if so, for which goods or services such use can be recognized as indicating the source.

Patent Court’s Decisions Regarding Use of Marks on Mobile Applications

1. Patent Court Decision in the Trial to Confirm Scope of Rights (Case No. 2023Heo12862)

On February 1, 2024, the Intellectual Property High Court (IP High Court) ruled that displaying a trademark as an icon or on the screen of a mobile application providing “electronic financial transaction services” is acknowledged as use for those services.

The gist of decision is that the defendant’s mobile application and check cards serve as means for providing its electronic financial transaction service, and therefore, use of the mark on the mobile application and check cards should be viewed as either “an act of displaying a trademark in advertisements for the electronic financial transaction service” or “an act of providing the service by indicating the mark on goods used by the consumers.”

2. Patent Court Decision in the Non-Use Cancellation Trial (Case No. 2023Heo13346)

On April 25, 2024, the IP High Court ruled in favor of Company A, holding that the use of a trademark on a mobile application should be regarded as trademark use for the designated goods “application software for mobile phones” based on the following reasons:

1. Company A’s website should be recognized as an advertisement for its application since it serves the purpose of providing information about the Company A’s application.
2. Company A obtains profits from the application, and therefore, it can be considered that consumers paid for using the application.
3. Consumers who download applications via application marketplaces are likely to recognize the downloadable application itself as an independent object of commerce with an exchange value, i.e., “goods” under the trademark law.

Significance

As a result of the IP High Court decisions, it is affirmed that the use of mark on a mobile application could be acknowledged as the use in connection with the services provided in the application, and that a free downloadable mobile application should be recognized as “goods” under the trademark law, depending upon the comprehensive circumstances of use and whether the application users incur costs.

Therefore, these cases serve as important references for trademark disputes and in determining the scope of trademark applications for applicants.