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2023
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Practice Notes

When does use of a trade name not infringe trademark rights? Korean Patent Court considers Trademark Act exception clause.

On November 25, 2022, the Korean Patent Court ruled on a case concerning limitations on the effect of registered trademark rights, specifically dealing with the question of whether one party’s use of a mark containing their own name, title, trade name etc. was “in accordance with generally accepted business practices” and thus outside the scope of rights of a similar registered trademark owned by another party. THE LAW Article 90 of the Korean Trademark Act (“Extent on Which Trademark Rights Do Not Have Effect”) provides that trademark rights do not extend to “[a]ny trademark using [another party’s] own name, title, or trade name, portrait, signature, seal, or well-known pseudonym, stage name, pen name, and the well-known abbreviated title thereof, in accordance with generally accepted business practices”, so long as such usage is not “for the purpose of unfair competition after registration and establishment of trademark rights”. (This wording was amended in 2016; in the old Trademark Act the restriction was applied to trade names etc. used “in a common way”.) The broad purpose of this clause is effectively to limit the effects of trademark rights in view of the intended spirit of the law and public interest. This does not equate to a limitation on the trademark holder’s right to exclusive use of the mark, but rather establishes the conditions under which another party’s use would be acceptable and non-infringing. According to Supreme Court precedent, using a trade name “in accordance with generally accepted business practices” means the name should be used in a way that does not create any special distinctiveness, for example by displaying in a unique font, color, stylization etc., and the location, arrangement, size of the name, combination with other elements, etc. are also considered. Overall, general consumers must be able to recognize that it is a trade name just by looking at the mark in question. Further, a “purpose of unfair competition” is understood as being an intention to obtain unfair profits by freeriding on the goodwill/credit of the registered trademark holder. In deciding on this point, subjective criteria such as the party’s motivation for selecting the mark, awareness of the registered trademark etc., and objective criteria such as similarity between the marks, fame of the registered trademark, similarity in business type and geographical proximity of business activities, as well as the actual use of the allegedly infringing party must be considered. THE CASE Aside from the specifics of the two parties’ respective marks, the complainant argued that the Court should apply the old Trademark Act in hearing this case; several grounds were put forward to support this argument, such as the complainant’s trademark being applied-for and registered before the amended Act came into force, as well as an argument that the wording of the revised Act suggests it should not apply to scope confirmation trials. However, the Court dismissed these arguments, deciding to apply the current (amended) Trademark Act. This meant that the respondent had to show their usage was “in accordance with generally accepted business practices”, rather than “in a common way”. The basic facts of the case are as follows: The complainant is the operator of “HASLLA ART WORLD”, a facility including a museum, gallery, hotel, restaurant and coffee shop (“HASLLA CAFE”), and is the owner of a trademark registration for “하슬라” [“HASLLA”] covering café and restaurant services in Class 43. The respondent is the operator of a café called “하슬라 가배” [“HASLLA GABAE”, where “GABAE” is an old-fashioned way of expressing the word “coffee”]. Both businesses are located in Gangneung City on the east coast of Korea. This case was an appeal from a scope confirmation trial heard by the IP Trial & Appeal Board (IPTAB) in which the complainant sought to show that the respondent’s use fell within the scope of their registered trademark rights. The specific usage in question was the respondent’s store signage shown below, where the smaller sign on the left reads “하슬라” [HASLLA”] written vertically, and the larger sign reads “하슬라 가배” [“HASLLA GABAE”], together with “Café” in English. [Respondent’s store signage] Note: Scope confirmation trials are inter-partes administrative procedures used to determine whether or not a specific usage of a mark falls within the scope of rights of another party’s registered trademark. Such trials are often filed alongside a civil infringement suit in which an injunction, compensatory damages etc. may be sought. As scope confirmation trials are heard by IPTAB subject matter experts, the decision — while not legally binding — may be submitted and carry weight in the civil suit. The Patent Court ultimately dismissed the appeal in favor of the respondent, upholding the IPTAB decision. This means that the defendant’s usage of their trade name “HASLLA GABAE” (in Korean) on signage for a café in Gangneung City is not considered an infringement of the registered “HASLLA” (in Korean) trademark. In reaching this decision, the Court considered the following, among other factors: Use in accordance with generally accepted business practices: The respondent’s trade name is “HASLLA GABAE”, which corresponds to the name used on the sign. The text is not expressed in a way that creates any special distinctiveness, and the addition of the English term “Café” is descriptive of the services offered. “Haslla” itself is the old name of Gangneung City used during the Goguryeo period (37BC – 668AD) of Korean history, and this is common knowledge among residents of the city. “Gabae” is a transliteration of the Chinese characters for coffee, and the term was widely used to refer to coffee during Korea’s period of enlightenment. The respondent seems to have conceived of the name by combining the old name for Gangneung City with the old term for coffee. Signboards with text surrounded by bulbs are commonly found across the country. Purpose of unfair competition: The complainant began operating a coffee shop in 2013, but has referred to it using various names over the years. An internet search for “Haslla Café” (in Korean) reveals posts predominantly concerning the complainant’s coffee shop, but results also contain the respondent’s store. While in the same city, the complainant’s and respondent’s stores are not in close proximity (approximately 17km apart). The concept and interior decoration of the stores are respectively different, with the respondent’s café being based on the theme of the Korean enlightenment period. The name “Haslla” is used in Gangneung City in road names, school and library names, festivals etc. Survey results show a high awareness of the meaning of “Haslla” among Gangneung City residents, and a reasonable awareness among residents of other areas in the same province.   COMMENT This case provides some further clarification on how exceptions to registered trademark rights are considered under Article 90 of the Trademark Act. While the respondent’s trade name in this case included the registered trademark in its entirety and both parties operate similar businesses, this naturally does not mean that usage of a trade name provides blanket protection against trademark infringement in all cases. On the contrary, the way in which the trade name is used was considered in detail in the context of the specific location of the business, and in this case it was not considered that consumers would be confused. Ultimately, trademark owners do not need to be alarmed by this decision as the exception clause does not apply to bad faith usage — in cases of intentional infringement, trademark rights can still be enforced, regardless of whether the infringer is using a trade name.   Written by Jonathan MASTERS and Sang-Eun SHIN

2023-01-07
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Practice Notes

Patent Prosecution Highway (PPH) now available between Korea and France

Following an MOU between the Korean Intellectual Property Office (KIPO) and France’s National Institute of Industrial Property (INPI) signed during the World Intellectual Property Organization General Assembly held in Geneva, Switzerland in July earlier this year, the Patent Prosecution Highway (PPH) program between Korea and France has become effective as of September 1, 2022.   From this date onwards, applicants may request KIPO to conduct preferential examination based on INPI work products provided the normal requirements are met, namely:   The KIPO application and the application forming the basis of the PPH request must have the same “earliest date” The INPI application must have one or more claims determined by INPI to be patentable/allowable The claims in the KIPO application must correspond (or be amended to correspond) sufficiently to the claim(s) determined by INPI to be patentable/allowable A request for examination must have been filed with KIPO by the applicant before, or together with, the PPH request There must be no first office action issued against the KIPO application at the time of filing the PPH request   According to KIPO’s 2021 statistics France ranked fifth in terms of the number of patent applications filed by foreign applicants in Korea, so this development should be welcomed by French applicants. (For reference Korea already has PPH agreements in place with the four preceding countries in the list, namely the US, Japan, China and Germany). Vice versa, Korean applicants — who rank fourth among INPI applicants from outside of Europe — will also be able to benefit from accelerated examination of their French applications based on KIPO work products.   By utilizing the PPH program, applicants can typically expect to receive a first office action from KIPO within 2-5 months of filing the request for preferential examination, instead of the typical 12-15 months for standard applications.   The agreement between KIPO and INPI is formally a three-year pilot program ending August 31, 2025, with the offices to decide whether and how to fully implement the program after the trial period based on evaluation of its results.   Written by Jonathan MASTERS

2022-09-13
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Practice Notes

KIPO publishes examination guidelines for virtual goods

Unsurprisingly given the fast-growing awareness of the metaverse and its implications for brand owners, the Korean IP office (KIPO) has seen a sharp hike in the number of trademark applications covering virtual goods, increasing from just 6 in 2020, to 17 in 2021, and 717 filed between January and May 2022. Reacting to this trend, KIPO has issued new examination guidelines for trademark applications covering virtual goods, effective from July 14, 2022, to prevent applicant’s confusion and to increase consistency of examination. Goods descriptions Virtual goods may now be designated under Class 09 in the simple form “virtual + goods name”, for example “virtual clothing”, “virtual shoes” etc.  This means that it is no longer necessary to rely on long-winded descriptions such as “computer programs containing virtual clothing (virtual goods)” or “downloadable image files (virtual clothing)” which were previously acceptable. Regardless, it is still necessary to specify the type of virtual goods, since an ambiguous description such as “virtual goods” would be unacceptable on account of it being overly broad. Relationship between virtual goods Previously, all virtual goods were considered to be similar regardless of their type. In theory, this meant that “virtual shoes” would have formally conflicted with diverse goods such as “virtual automobiles” etc. This naturally had the potential to lead to disputes between brand owners operating in wholly different fields.  Under the new guidelines, virtual goods will be sub-classified and compared based on their type, just like their physical counterparts. Thus, just as two applications for similar marks respectively covering “clothing” and “footwear” in Class 25 would not be considered conflicting under Korean examination practice, the same would be true for a pair of applications covering “virtual clothing” and “virtual footwear”. However, there would be a conflict between applications respectively covering “virtual pants” and “virtual clothing”, which are formally similar goods. Relationship between physical and virtual goods The new guidelines specify that physical and virtual goods will by default not be considered conflicting for the purposes of examination. By way of example, a new application covering “virtual clothing” in Class 09 would not be blocked by a senior mark covering “clothing” in Class 25. However, if an application covering virtual goods is filed for a mark which is similar to an established well-known/famous mark, the examination regarding physical and virtual goods would also consider whether there is a likelihood of consumer confusion between the later-filed application and the well-known/famous mark, etc. Recommendations While some may have been on the fence before, now that KIPO has clarified its position on the similarity issue regarding physical and virtual goods, it is now important for brand owners to file in Class 09 if they wish to ensure they have protection for the virtual representation of their physical goods. With Korea being a first-to-file jurisdiction, it is recommended that such filing be done as soon as possible. (As discussed above, the new application must specify all of the virtual goods of interest individually, and it would not be sufficient to simply designate “virtual goods”.) It would also be advisable to ensure that Class 09 is included in any trademark watching services set up for marks of importance or interest, especially given the rapid increase in filing activity for virtual goods.   Written by Jonathan MASTERS and Alex Hyon CHO

2022-07-20
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Practice Notes

Easier restoration of IP rights

When patent, utility model, trademark and/or design rights (collectively “IP rights”) are invalidated or extinguished following a rights holder’s inability to meet a statutory deadline, in certain circumstances it is possible to “restore” the IP right to its pre-invalidation or pre-extinguishment state and continue prosecution. Comparing with other systems around the world, Korean IP laws have traditionally applied strict standards for the restoration of IP rights. However, recent revisions have relaxed these requirements, shifting the acceptable standard from “unavoidable reasons” to “justifiable reasons”. These changes came into effect from April 20, 2022. The previous “unavoidable reasons” were applicable only in very limited situations such as natural disasters or wars, while “justifiable reasons” are applicable in emergency situations where the applicant cannot undertake the necessary procedures, for example due to hospitalization for Covid-19. The detailed requirements for the restoration of IP rights are as follows: Substantive Requirements: There must be “justifiable reasons” for failing to comply with the relevant deadline in spite of all due care demanded by the circumstances having been taken. The key requirement, therefore, is to prove that “due care” was taken. The obligation to exercise due care must be considered in light of the situation as it stood before the missed deadline expired. “All due care” means all reasonable care, i.e., that which a reasonably competent patentee, applicant, or representative would employ in the relevant circumstances. Procedural Requirements: Under current IP laws, actions to restore IP rights must be filed within two months from the date on which the justifiable reasons for non-compliance with the original deadline cease to exist, and at the latest within one year of the original deadline. In order to achieve the restoration of IP rights, a petition for restoration of IP rights must be filed within the aforementioned periods together with a statement and evidence showing the “justifiable reasons”. The petition will be examined by the KIPO division handling the case in question. While it is certainly a positive development that the Korean IP office (KIPO) is being more lenient in its approach to IP rights restoration, with more varied causes not attributable to the rights holder being accepted as the justification for a missed deadline, the specific standards for the required statement and evidence have not been clearly stipulated and so there still remains some uncertainty about the practical implications. However, we expect that these standards will become established based on precedent in the weeks and months to come.     Written by Jonathan MASTERS

2022-05-27
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Practice Notes

Designs troubled by trademarks

To achieve registration a design must satisfy several prerequisite requirements, such as novelty and creativity. Novelty signifies that the design, before application, must not have been included in publications or catalogues, publicized through sales or exhibition, or exposed in any other manner such that somebody could identify it. Further, creativeness signifies that a person with ordinary skill in the art could not easily create a given design based on pre-existing internationally or domestically known designs, well-known shapes, patterns, or colors, or any combination thereof. Interplay between designs and trademarks However, even if the aforementioned requirements are satisfied, designs which are liable to create confusion over articles connected with another person’s business cannot be registered and shall be invalidated if granted. Typical examples include designs which use another person’s well-known trademarks, service marks, collective marks, or business emblems (including 3D trademarks). Here, a question arises as to whether a likelihood of confusion requires that there be similarity between the design article and the designated goods of the trademark. Likelihood of confusion Regarding the above question, the court recently answered that similarity between the design article and the designated goods of the trademark is not required in finding a likelihood of confusion. (Patent High Court, 2020heo6255, November 18, 2021) The registered design in question is shown as below and was for a “handbag accessory”. Fig. 1 Fig. 2 Fig. 3    (original 3D file)         (front view)      (Side view) This case examines whether or not the plaintiff’s registered design possesses the possibility of confusion with the defendant’s products related to the trademarks as below, and if so, whether the plaintiff’s registered design should be invalidated. Pre-existing Trademark 1  Pre-existing Trademark 2             (Classes 6,9,14,18,20,24)                  (Classes 14,25,26) Well-known or remarkably famous trademarks are protected, regardless of whether they are registered under the Trademark Act, by restricting the registration of any identical or similar marks. An application for the registration of a similar mark filed by a person other than the owner of such a well-known/famous trademark will be rejected; and, if registration is erroneously granted, the mark will be subject to invalidation. Registration of a similar mark may also be rejected even if the goods of the trademark application are not identical or similar to those of the well-known/famous trademark due to the possibility of misleading the consumers about the origin of the goods as well as anti-competitive practices. Given the global brand recognition of Chanel, whether or not the defendant’s pre-existing trademarks met the legal standards for being ‘famous’ was not in question. Rather, the key issue was with respect to whether or not the plaintiff’s registered design was likely to cause confusion over articles connected with the defendant’s business. The court ruled that there indeed was a possibility of confusion. The following outlines the court’s reasoning: The registered design is comprised of two overlapping circular rings similar to the English letter “O”, and is closed overall, while the pre-existing trademarks consist of two “C”s overlapping in different directions, with both sides open. The registered design shows five thin “O” shaped rings that are connected to form a single ring, while the pre-existing trademark is in the shape of a thick, black English letter “C”. The design differs from the trademark in that the two disk rings are combined in a ring shape to form a three-dimensional effect, while the trademark is flat and two-dimensional. A key similarity between the registered design in question and the pre-existing trademarks involves an intersection and overlapping of two characters featuring the same thickness while both converge at the same angle. The area that intersects and combines symmetrically is the dominant aesthetic feature of the trademarks and designs as well. Despite the above-mentioned differences therebetween, they are too minor to offset the overwhelming similarity in their dominant aesthetic features. Therefore, overall, the two are similar enough to reasonably conclude that it may create confusion over articles connected with the trademark owner’s business. It is important to note that plaintiff’s argument that “the designated products on which the design is to be applied differ in purpose and function from the defendant’s products, and are therefore unlikely to cause confusion”, was rejected by the court. According to the court, it is because as long as there is a possibility of confusion between the registered design and the articles connected with another person’s business, the products of the registered design and the products of the pre-existing trademark are not required to be the same or similar for the purposes of invalidating the registered design. However, there were two important additional factors that the court considered in reaching its decision. First, the product of the plaintiff, in this case a handbag, was comprised of zippers, straps, and materials that were used in the same or similar fashion to those of the defendants’ products. Second, the plaintiff’s design was separately applied for and registered as a trademark for the same design in class 18, which pertains to leather and leather imitation products, which includes handbags. Notes Well-known trademarks are legally protected under both the Trademark Act and the Design Protection Act. According to the Trademark Act, any trademark likely to cause confusion with the goods or business of another person that is remarkably recognized by consumers is ineligible for trademark registration. Similarly, the Design Protection Act states that the application of a design likely to cause confusion with an article associated with another person’s business may be rejected if it is found to be to identical or similar to a pre-existing trademark. Here, as long as there is a possibility of confusion over articles connected with another person’s business, the products of the design and the goods of the trademark are not required to be the same or similar for the purposes of rejecting a design application or invalidating a registered design. When considering filing a design application, it is important to do a similarity search not only for prior designs but also pre-existing trademarks which are well known or famous in the market.   Written by Ben Yuu (Managing Partner)

2022-04-20
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Comparative Law

Restoration of IP Rights in KR/US/JP/EP

1. South Korea (KIPO) Comparing with the systems in others countries, the Korean Patent Act applies strict standards for restoration of patent rights, which must meet both substantive and procedural requirements. (1) Substantive Requirements: There must be a justifiable reason for failing to comply with the relevant time limit due to “a cause not attributable to a party”. While there are various interpretations of the phrase “cause not attributable to a party”, the definition refers to cases where the failure to comply with the time limit is due to objective and obvious reasons, or any unavoidable reason, while making assurance doubly sure with due diligence. For example, KIPO’s examination guidelines exemplify natural disasters and missed deliveries of any notice or document as “a cause not attributable to a party”. (2) Procedural Requirements: Under the current Patent Act, actions to re-establish patent rights should be filed within two months from the date on which the justifiable reason for non-compliance with the original time limit expires, and at the latest within one year after the original time limit. (In this regard, the procedural requirements are identical to Japan and the EPO.) Even if the reason for failing to comply with the time limit is accepted as a cause not attributable to a party, the restoration of the right cannot be achieved unless the proper actions are taken within these designated periods. 2. The United States (USPTO) The USPTO has various rights recovery systems throughout all procedural phases such as application, examination, registration of rights establishment, and payment of fees in order to ensure maximum benefit to a party. (1) Substantive Requirements: There must be an “unintentional” failure to comply with the relevant time limit. If the delay in reply by an applicant was unintentional, a petition may be filed in order to revive an abandoned application. Thus, compared with South Korea’s “cause not attributable” standard, the USPTO’s threshold is significantly lower. Most petitions to revive abandoned applications are accepted. (2) Procedural Requirements: There is no specific time limit stated by the USPTO. While most patent offices around the world have a specific deadline to take actions to restore IP rights, the USPTO allows applicants to file petitions to revive applications even in cases where more than twelve months have passed from the original time limit. This can be understood as a patent system that operates in the interests of the applicant, rather than purely with legal stability in mind. 3. Japan (JPO) Japan’s system is similar to the Korean system, but with a wider scope of recognition. (1) Substantive Requirements: There must be a “justifiable reason” for failing to comply with the relevant time limit. The determination of whether the reason was justifiable is based on evidence stated in the application for restoration. The JPO’s interpretation of “justifiable reason” can be considered similar to the “due care” criteria adopted by the European Patent Office (EPO). First, whether the reason for missing a deadline is justifiable depends on whether the reason was predictable and whether sufficient measures were taken before and immediately after the incident. If the reason is predictable, it cannot be considered justifiable. That is, a lapsed patent right cannot be restored when the reason for missing the deadline was predictable. Conversely, if the reason for missing the deadline was unpredictable, the lapsed patent right may be restored provided that the applicant took all necessary measures to avoid any mistakes. (2) Procedural Requirements: An application for the restoration of rights should be filed within two months from the date on which the justifiable reason for non-compliance with the original time limit expires, and at the latest within one year after the original time limit. (In this regard, the procedural requirements are identical to South Korea and the EPO.) 4. European Patent Office (EPO) The re-establishment of rights under Article 122 of the European Patent Convention can be used to recover rights lost as a result of missing a deadline set by the EPO. Unlike other countries, a unique legal remedy called ‘further processing’ allows applications to proceed if the applicant makes a request for further processing of the application within two months of the communication concerning either the failure to observe a time limit or a loss of rights. (1) Substantive Requirements: The EPO shall re-establish rights if a party can demonstrate that they were unable to observe the missed time limit in spite of all due care required by the circumstances having been taken. The key requirement, therefore, is to prove that “due care” was taken. The obligation to exercise due care must be considered in light of the situation as it stood before the missed time limit expired. “All due care” means all reasonable care, i.e., the standard of care that a reasonably competent patentee, applicant, or representative would employ in all the relevant circumstances. (2) Procedural Requirements: An application for the restoration of rights should be filed within two months from the date on which the justifiable reason for non-compliance with the original time limit expires, and at the latest within one year after the original time limit. (In this regard, the procedural requirements are identical to South Korea and Japan.) ‘Further processing’ must be requested within two months of the date on which the communication concerning either the failure to observe a time limit or a loss of rights is notified.

2022-04-20
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