South Korea paves the way for partial refusal system and expedited examination

In the lunar calendar, 2023 is the Year of the Black Rabbit. The rabbit is associated with many positive traits in Eastern culture, such as wit, prosperity, gentility, and swiftness. Since the start of 2023, the Korean Intellectual Property Office (KIPO) has decided to implement several measures to improve convenience for trademark applicants, and to swiftly respond to the changing market environment.

One of these changes is the formation of an expedited examination division for service marks. In Korea, 11.5% of all trademark applications included requests for expedited examination (as of November 2022). However, this rate grows much higher if the scope is narrowed to service marks only. In the same period, about 48.7% of applicants using this fast track were service mark applicants. In particular, the rate of requesting expedited examination has increased noticeably in the retail/wholesale and restaurant sectors. Noticing this, the KIPO reacted swiftly and established a new examination division solely to handle the expedited review of these highly demanding sectors. The scope of this new division may expand in the future to other service marks, but at the moment, it is concentrated on these two sectors.

Another change is the adoption of a ‘partial refusal system’ and a ‘re-examination request system’. The partial refusal system is already used in many jurisdictions, such as the US, China, the EUIPO, and many European countries. The adoption of the partial refusal system was somewhat expected, and it has finally happened in Korea. Although it is not a totally new system, there is one thing that foreign applicants need to be aware of when using this system in Korea.

In Korea, it is permitted to file a trademark application in multiple classes. Accordingly, an office action can be issued against a trademark application only for some classes or some portion of the goods. In such cases, previously, if the applicant did not respond to the office action, the entire application was rejected for all designated classes and goods.

Now, however, even if the applicant does not respond to an office action, only those subsets of goods or services refused will be finally rejected, and the remaining items can be registered. In most cases, the basis for partial refusal will likely be confusing similarity with preceding trademarks. For example, if an application in connection with ‘clothing, shoes, and bags’ conflicts with a prior trademark only for ‘clothing’, now, without requiring any response, ‘shoes and bags’ would be allowed for registration.

If the ‘clothing’ is important to the applicant in the above scenario, they may file an appeal against the final partial rejection with the Intellectual Property Trial and Appeal Board (IPTAB). In such a case, the partially allowed goods ‘shoes and bags’ would be placed on ‘standby for publication’ of the application. Thereafter, when the final disposition of the partially refused goods ‘clothing’ is finalised through the decision of the IPTAB (either registration or rejection), all the approved goods would proceed to publication and registration.

Accordingly, if the applicant wishes to quickly register the trademark for some goods that have not been rejected, as before, it is required to respond to the office action by ‘dividing out’ either the partially rejected or partially approved goods. Thereafter, when an office action is issued against the partially rejected goods, once again on the same grounds for rejection, the applicant can then respond to the office action by filing an amendment, and file an appeal against the final refusal afterwards.

As Korea does not require submission of evidence of use at the time of filing, registration and renewal, applicants tend to file trademarks for overly broad items that are not actually in use. Therefore, the partial refusal system would be a very convenient and cost-effective way for the applicant to choose a ‘do nothing’ approach.

Although this system may seem similar to those of other jurisdictions, it should be noted: as for international trademarks, a decision of partial refusal is not a final ruling, as it is neither a statement of grant of protection nor a confirmation of total provisional refusal. Therefore, a decision of partial refusal is not forwarded to the International Bureau of WIPO, not is it recorded in the WIPO Gazette pursuant to the Madrid Agreement.

If a non-resident foreign applicant does not appoint a Korean representative for an international trademark, a decision of partial refusal will be sent directly to the applicant by airmail to the address recorded in the WIPO database. In such cases, pursuant to the Korean Trademark Act, a copy of the decision is deemed to have been served on the date the decision was sent, irrespective of the applicant’s receipt thereof. In addition, the due date for appeal against the decision of partial refusal is calculated from the date the decision is sent, not the date it is received.

Accordingly, it is highly recommended that non-resident foreign applicants using the Madrid system appoint Korean counsel in order to respond to a partial refusal in time.

The partial refusal system applies to trademarks filed on or after February 4 2023. In the case of international trademarks, this system applies to international registrations filed or subsequently designated on or after this date.

Previously, it was only possible to file an appeal against a final refusal for the entirety of the goods and classes of the application. Therefore, to have an application examined again, even if the applicant chose to abandon some goods, or if the chances of overcoming the rejection for some goods were low, the applicant had to file an appeal against the entirety of the goods.

Now, it is possible to file an appeal for only some goods, allowing the abandonment of partial goods or classes from an application at the time of filing an appeal under the revised Act. Consequently, the cost burden will be substantially reduced.

The new law has created a second route for reconsideration by the examiner. Particularly, when the rejection can be overcome by simple amendment, the applicant may file a re-examination request. This can be submitted with an amendment to the descriptions, including deletion of some goods, within three months from the date of receipt of the final refusal.

It should be noted that a re-examination request must be submitted for all rejected goods. However, if an application is finally rejected via an opposition decision, the re-examination request is not available. In such cases, the applicant must file an appeal against the final refusal with the IPTAB.

After re-examination with an amendment, if the grounds for the refusal of the application have still not been resolved, KIPO will issue a final refusal. Thereafter, the applicant will have another opportunity to file an appeal against the final refusal with the IPTAB. The re-examination request applies to Korean trademark applications filed on or after February 4 2023, and it is not available for international trademark registrations.

For those applications filed from January 1 2023 in Korea, the 12^th edition of the Nice Classification will apply. Under the 12^th edition, it is now possible to file an application with goods having more realistic descriptions, such as ‘downloadable digital files authenticated by non-fungible tokens’ in Class 9, which was not acceptable in the former edition. Overall, it is expected that all these changes – some big, some small – will make for another year of progress for those who seek IP protection in Korea.