High Court ruling may end war of the roses

South Korea

The Seoul High Court has ruled that the Agricultural and Fishery Marketing Corporation's (AFMC) use of four of German company W Kordes' Söhne Rosenschulen GmbH & Co KG's (Kordes) trademarks for roses did not amount to trademark infringement as the marks lacked distinctiveness (Case 2003Na16766). However, the court held that the Korean corporation had infringed the German company's rights in relation to six other rose marks.

Kordes registered approximately 20 rose names as trademarks with the Korean Intellectual Property Office in 1997 and 1998. AFMC, which operates a wholesale flower market, used 10 of the trademarked names on an electric bulletin board to display the roses on sale. Kordes argued that this use infringed its trademark rights. It claimed damages to the amount of AFMC's profit in relation to the alleged infringing use. AFMC counterclaimed that the names had become generic by the time Kordes registered them as trademarks.

The Court of First Instance upheld Kordes's claims without examining AFMC's contention that the marks lacked distinctiveness. On appeal, the Seoul High Court held that the evidence submitted by AFMC failed to establish that the names registered by Kordes had become generic or non-distinctive. AFMC appealed the decision to the Supreme Court, which remanded the case to the High Court holding that (i) the High Court's decision was unlawful as evidence submitted by AFMC clearly showed that some of Kordes's marks failed to serve as source indicators as they are used and known as general terms for certain breeds of roses, and (ii) the High Court should review the distinctiveness of each rose name at issue.

On remand, the High Court upheld Kordes's complaint in relation to six of the trademarks and ordered AFMC to pay W2.3 million ($2,000) in damages. However, the court found that the other four names - Dallas, Kardinal, Melody and Red Sandra - had been widely used in the rose industry before Kordes registered them as trademarks. In view of the marks' lack of distinctiveness, the court held that Kordes could not establish the validity of its trademark rights. Accordingly, the court found that AFMC's use of these names was not infringing and thus did not warrant a grant of damages.

In a separate opposition action brought by the Korean Florist Association, the Supreme Court had in the meantime ruled that both the KARDINAL and RED SANDRA marks should not have been registered as they had become common names for the breed of roses to which they applied (see Florists win lawsuit filed by German rose giant).

Jay Young-June Yang, Kim & Chang, Seoul

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