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While using the trademark, beware of violating the Unfair Competition Prevention Law

November 28, 2019 / Blog, Case Comment, Korean
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          In Korea, there is a law called the Unfair Competition Prevention and Trade Secret Protection Act. Referred to as the ‘Unfair Competition Prevention Law’ for short, this law aims to maintain orderly trade by preventing acts of unfair competition such as improper use of domestically well-known trademarks and trade names, and by preventing infringement of trade secrets” (Article 1). The first article establishes that the law is related to trademark law. In the below post, we will explore how trademark legislation is related to the unfair competition prevention law.

          The first case is related to the “OUTBACK” trademark. In this case, Article 2, 1. (c) of the Unfair Competition Prevention Act posed a problem. This specific article designates “an act of doing damage to distinctiveness or reputation attached to another person’s mark by using the mark identical or similar to, another person’s name, trade name, trademark, or container or package of goods, or any other mark indicating another person’s goods or business (with respect to marks indicating another person’s business, including methods of selling products and offering services or overall appearance of a business place such as signs, exterior, and interior decorations), which is widely known in the Republic of Korea; or by selling, distributing, importing, or exporting goods bearing such marks; without good cause prescribed by Presidential Decree, such as the purpose of noncommercial use” as unfair competition and prohibits it. In order to judge whether or not the above provision is violated by the “Outback” trademark, we must assess whether:

  1. the infringed trade name is widely recognized in Korea; and
  2. whether the infringed trademark is similar or same to the infringing trademark.

     In relation to point 1, according to a recent litigious case in the Darts-ip database (darts-248-789-E-ko), the infringed trademark Outback Steakhouse has been in operation in Korea since 1997 and operates over 80 stores nationwide. In addition, the company increased awareness by using famous celebrities such as Jang Dong-gun, Sung Si-kyung and Ko So-young as an advertising model. Taken together, the name of the OUTBACK  with steakhouse is widely recognized in Korea. The court also made the same conclusion.

As to point 2, let us examine look at the two trademarks of the case:

          First, the trademark on the left is a trademark of the outback steakhouse. ‘OUTBACK’ means ‘remote area.’ Since it is a family restaurant with the concept of Australia’s great wilds, the brand has engraved the shape of the mountain range on the word OUTBACK. The trademark on the right is a trademark of OUTBACK Motel. There is a picture of a woman lying down, and the word OUTBACK is located underneath, and at the bottom it says ‘DRIVE IN MOTEL.’

          The court judged that “Because the name and concept of the important part of the service tables-“OUTBACK” is same… the two service marks are similar, same” (darts-248-789-E-ko). Even from the point of view of the public, it is easy to understand the court’s judgment by thinking that in everyday life most people say “Let’s go to OUTBACK” rather than “Let’s go to OUTBACK steakhouse.” Also, the shape of the lying person is similar to the shape of the mountains at first glance, and the similarity of the two trademarks can be found by considering the similar layout of ‘OUTBACK’ letters and similar colors of the trademarks.     

          Based on these judgments, the court determined that the motel’s trademark in this case adversely affected the discrimination or reputation of the existing outback steakhouse trademark.

“The defendants used the case trademark while running an unmanned lodging property that had a negative image of being used as a love hotel…Considering the fact that the defendants transformed the mountain-shaped figure on the top of the (plaintiff’s)trademark into a sensational shape like a naked woman lying down, the defendants used the service mark of the prominent plaintiff in the service industry with a negative image, and by doing so, the defendants damaged the good image and value of the plaintiff’s trademark…” (darts-248-789-E-ko)

         

          What about another case of unfair competition law? This time, Article 2, 1. (a) of the Unfair Competition Prevention Act is a problem. Article 2, 1. (a) of the Unfair Competition Prevention Act designates and prohibits “an act of causing confusion with another person’s goods by using marks identical or similar to, another person’s name, trade name, trademark, or container or package of goods, or any other mark indicating another person’s goods, which is widely known in the Republic of Korea; or by selling, distributing, importing, or exporting goods bearing such marks” as unfair competition.

          Kumkang (left trademark) is a brand that has made and sold shoes and handbags in Korea since the 1960s. Then in 1969, another brand was established, Kumkang (right trademark), which began selling socks and gloves. Kumkang (shoe, handbag manufacturer), who decided that consumers could confuse its brand with another brand, eventually filed a lawsuit against another brand (darts-637-822-F-ko).

   

          In response, the court decided that both trademarks had the same name and notion, so they corresponded to similar marks. However, although Kumkang is widely known in Korea for shoes and handbags, it is not known for the manufacture and sale of socks. And the court determined that it was not a violation of the Unfair Competition Prevention Act, unless it was widely known that there was no possibility to confuse consumers about source of socks products (darts-637-822-F-ko).  

          Given the growth of Unfair Competition Prevention laws, it is essential to know the trends of the court cases regarding the law. Looking at the court cases, what is particularly important after the recognition of trademark similarity is ‘the possibility of affecting consumers.’ Thus, in order to win the Unfair Competition case, a lawyer can prove that 

  1. ‘the business sectors in which the two trademarks are used belong to the same sector and that existing consumers can confuse the products of two different companies into the same one’s product’, or
  2. ‘consumers may encounter trademarks with similar titles or ideas, and may have a negative image of the brand’.
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Author : Taeyoen Kim

Taeyoen Kim graduated from Sungkyunkwan University and Ewha Womans University where she obtained her JD. She worked as a reporter of <The Sungkyun Times>, and now working as an analyst of Darts-ip, dealing especially with trademark issues. She is interested in trademark and Unfair Competition law issues, and about copyright issues regarding cultural contents such as K-pop.

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