Courts may review validity of registered trademarks in infringement actions

The Korean Supreme Court has issued a landmark decision stating that the owner of a registered trademark the validity of which is clearly questionable may not exercise rights based on the trademark registration, even where the trademark has not been invalidated through invalidity proceedings (Case 2010da103000, October 18 2012).

The owner of the registered mark HI WOOD, which covers lumber-related goods and services, filed a civil action against an alleged trademark infringer, seeking injunctive relief and damages. The Supreme Court held that the validity of the mark was clearly debatable, as it was descriptive of the nature of the designated goods. The court reasoned that the mark means “high-quality wood” because ‘hi’ is an abbreviation of ‘high’, which is an adjective used to describe a “superior quality.”

Further, the Supreme Court stated that, if the owner of an invalid trademark registration, such as the mark at issue, could continue to exercise its exclusive rights in the trademark, this would harm the public interest and go against the purpose of the Trademark Act, which aims to preserve the goodwill of trademark owners’ businesses. The court also pointed out that the principle of equity would be violated if the owner of such a trademark were to enjoy unjustified benefits, while the intended user of the trademark suffered unfair losses.

In light of the foregoing, the Supreme Court held that the lawsuit was an abuse of rights and was not permissible. In addition, the court specifically mentioned that a court presiding over an infringement matter may review and decide on the validity of a trademark registration, since the registration itself is the basis of the ‘abuse of rights’ defence.

This decision is significant in that the Supreme Court overruled its own long-standing case law under which a court cannot deny the rights of a registered trademark owner until the mark is invalidated through separate invalidation proceedings. It is now possible for a defendant in a trademark infringement action to raise the defence of invalidity if there are clear grounds for the invalidation of the trademark at issue.

Sung Nam Kim and Nayoung Kim, Kim & Chang, Seoul