There was a recent ruling in Korea on registered marks that are similar to the "Jack Daniel's" trade mark known for a brand of whiskeys. This case involved the application of Article 7(1)12 of the Trade Mark Act as it existed before its 2007 revision, which prohibited registration of a "trade mark, which is identical or similar to a trade mark that is well-known as indicating the goods of another among domestic or overseas consumers, used for unjust purposes, such as to gain unjust profits or to inflict loss to that other party". Under Article 7(1)12, a party seeking invalidation of a mark similar to his own must show: (i) that his mark is well-known as indicating his goods among consumers in or outside of Korea: and (ii) that the registrant of the mark similar to his own had applied for their respective registrations for unjust purposes. In the "Jack Daniel's" case, the unjust purposes element (whether unjust purposes may be found in a trade mark that was registered for goods that are different from the designated goods of a well-known mark) was at issue.

Background

In 2006, a world-renowned whiskey producer, Jack Daniel Properties, Inc (JDPI), filed three invalidation actions against several registrants of marks that are similar to its "Jack Daniel's" trade mark under Article 7(1)12. For protection under Article 7(1)12, JDPI must show: (i) that the "Jack Daniel's" trade mark is well-known as indicating the goods of JPDI among consumers in or outside of Korea; and (ii) that the registrants of the trade marks at issue had applied for their respective registrations for unjust purposes. The registrants of these marks (trade marks at issue) registered them for classes of goods, namely for cosmetics and bags, which are different from the class of goods for which the "Jack Daniel's" trade mark is known overseas.

In two of these cases, the Intellectual Property Tribunal (IPT) found no unjust purposes and determined that there were no grounds for invalidation under Article 7(1)12. Conversely, in the third case, the IPT found unjust purposes and determined that there was a ground for invalidation under Article 7(1)12. The losing parties in all three cases appealed to the Patent Court. However, the Patent Court found unjust purposes in all three cases and ruled that there were grounds for invalidation under Article 7(1)12. Although the registrants of the trade mark at issue appealed all three cases to the Supreme Court, the Supreme Court confirmed the decisions of the Patent Court and dismissed these appeals.

Main issues

There are many factors that courts consider in determining the well-known status of a trade mark, among which are the length of time in which the trade mark has been used, the method and scope of use of the trade mark, the status or volume of actual trade under the trade mark and whether the trade mark is objectively widely-known.

The above factors may generally be shown with evidence that pertains to the history of the trade mark, whether the same trade mark has been registered in other countries, revenues from products sold under the trade mark, substance and expenditures in advertising the trade mark, whether the fame of the trade mark was recognised by public authorities, and other evidence of use of the trade mark. Although many foreign trade marks have long and rich histories, there were a number of cases where the well-known statuses of such marks were not found by the Korean courts because of lack of evidence. Therefore, it is highly advisable for owners of well-known or famous trade marks to keep records of their use and well-known status, among other things.

In the "Jack Daniel's" case, regarding the well-known status issue, a substantial amount of evidence showing that the "Jack Daniel's" trade mark is well-known as indicating the goods of JDPI among consumers outside of Korea was submitted. In particular, the evidence showed, among other things: (i) JDPI's yearly sales amount; (ii) JDPI's yearly expenditure on advertisements; (iii) the medium of the advertisements; and (iv) that the "Jack Daniel's" brand has ranked in the top 100 brands worldwide by Interbrand Corporation, a global branding consultant and evaluator. Based on the evidence presented, the Patent Court found that the "Jack Daniel's" trade mark is well-known, particularly in the US.

Trade Mark Act revision

The Trade Mark Act was revised on January 3 2007 and came into effect on July 1 2007. Before the revision, the Trade Mark Act prohibited registration of a "trade mark, which is identical or similar to a trade mark that is well-known as indicating the goods of another among domestic or overseas consumers, used for unjust purposes, such as to gain unjust profits or to inflict loss to that other party". The National Assembly reduced the standard through the 2007 revision by deleting the word well from well-known.

In general, defining unjust purposes or intent on the part of the registrant of a mark similar to the original mark is not easy. In determining unjust purposes, the courts look at a number of factors together, including, among other things: (i) the creativity of the original mark rendering it difficult for others to imitate without referring to the original mark; (ii) the well-known status of the original mark; (iii) the degree of similarity between the marks (whether the mark under review is stylised similarly to the original mark, for example); (iv) whether there was an economic or commercial relationship between the registrant of the original mark and the registrant of the mark under review; and (v) the amount and forms of effort on the part of the registrants in preparing their businesses in connection with their marks.

In the "Jack Daniel's" case, the Patent Court addressed whether there were unjust purposes on the part of the registrants of the trade marks at issue at the time of filing the applications. The Patent Court found, in particular, that the "Jack Daniel's" trade mark is not a mark that can easily be thought of or created, that the registrants of the trade marks at issue made no use of these marks after their registrations, and that the "Jack Daniel's" trade mark is famous.

Although the fact that there was no economic relationship between the designated goods for the "Jack Daniel's" trade mark and the trade marks at issue was raised as an issue, based on the above circumstances supported by evidence thereto, the Patent Court found unjust purposes on the part of the registrants of the trade marks at issue and reversed all conflicting decisions of the IPT. In essence, the Patent Court ruled that where the referenced mark is well-known for its designated goods and creativity, there may be grounds for invalidating the similar mark even if the similar mark was registered for a different class of goods.

Significance of the case

The "Jack Daniel's" case stands for the proposition that if the well-known status and creativity of the original mark are proven, unjust purposes on the part of the registrants of the mark that is similar to the well-known mark may be found and the mark that is similar to the well-known mark may be invalidated even where the mark that is similar to the well-known mark was registered for goods that are different from the designated goods of the well-known mark.

In other words, in determining unjust purposes, the courts look at various factors together, including, among other things: (i) creativity and well-known status of the well-known mark; (ii) the degree of similarity between the well-known mark and the mark under review; (iii) the amount and forms of effort on the part of the registrants in preparing their businesses in connection with their marks; and (iv) the economic connection between the designated goods of the well-known mark and the designated goods of the mark under review.

However, the economic connection between the designated goods of the well-known mark and the designated goods of the mark under review is not a requisite in finding unjust purposes. As long as there exist other factors, especially the well-known status and creativity of the well-known mark, unjust purposes may be found even if there is no economic connection between the designated goods of the well-known mark and the designated goods of the mark under review. Therefore, the "Jack Daniel's" case confirms that if a trade mark pirate registers marks that are similar to a famous brand that has not yet launched in Korea for various types of goods, the owner of the famous mark may still seek trade mark protection in Korea.

Jae Hoon Kim

Jae Hoon Kim is the head of the intellectual property practice group at Lee & Ko. His primary practice areas are intellectual property, franchise and unfair competition. Jae Hoon has been representing large companies in the pharmaceutical, chemical, mechanical, electrical, telecommunications and computer software industries. He is admitted to the Korean Bar and the New York Bar and has worked at Morgan Lewis & Bockius and Morrison & Foerster.

Eun Woo Lee

Eun Woo Lee was born in Minneapolis, Minnesota, in 1978. She was admitted to the Bar in 2004 in Korea. Eun Woo received her LLB from the College of Law, Seoul National University, in 2002 and studied at the Judicial Research and Training Institute, Supreme Court of Korea, from 2002 to 2004. She is a member of both the Korean Bar Association and the Seoul Bar Association.