KIPO proposes significant amendments to Trademark Act

The Korean Intellectual Property Office (KIPO) has proposed a number of significant changes to the Trademark Act. KIPO hopes that, if passed by the National Assembly, the proposed amendments will take effect on July 1 2015. Of the many changes suggested by KIPO, the more notable are as follows:

• Electronic use - Article 2(1)(vi) lists the actions that may be considered as use of a trademark under the act. At present, this does not include electronic use (eg, on the Internet or similar platforms). While the development of e-commerce and other electronic services has led courts to recognise such electronic use of trademarks in specific cases, the proposed amendments to the act will explicitly include 'use in an electronic manner' as one of the statutory types of trademark use.



• Trademark registration:
  • Secondary meaning - the existing act permits registration of a trademark that lacks distinctiveness if the mark has acquired secondary meaning, but only if the applicant can show that consumers can easily recognise the trademark as a source identifier. The proposed amendments lower this standard by deleting the word 'easily' from the language of the act, thereby showing greater respect for the goodwill of trademarks that already function as source identifiers in the marketplace.
  • New market entrants - at present, potential applicants must wait one year before registering a mark that is similar or identical to a registration that has recently been expunged from the register. This rule aims to protect consumers from any potential confusion. However, the proposed amendments eliminate this one-year wait, giving new market entrants greater choice when selecting their desired trademarks.
  • Prior users - under the existing act, where multiple applications are filed on the same day for the same mark, if the applicants cannot agree among themselves which application has priority, a lottery will be held to decide the issue. The amendments will instead grant priority to the applicant that first used the subject mark before conducting a lottery.
  • Consent letters - at present, KIPO does not permit a junior trademark applicant to obtain a registration for an existing mark, even if a letter of consent from the senior registrant has been submitted consenting to registration. However, in order to harmonise the law with global trademark standards, the act will be amended to recognise such consent among the parties, provided that registration of the junior trademark would not create confusion among consumers.
  • Dilution - trademarks that create consumer confusion with famous marks cannot be registered under the act. The amendments will also prevent the registration of marks that may potentially dilute a famous mark.
  • Unfair applications - in addition to those grounds for refusal set out by the existing act, the proposed amendments provide that registration may be refused on the basis that it has been unfairly executed or is lacking in good faith. For instance, an application may be refused where the applicant obtained knowledge of the mark from the original or good-faith owner through an agreement, transaction or other relationship and contrived to register the mark before the owner was aware of the application.
     
• Cancellation actions - at present, a petitioner has legal standing to initiate a non-use cancellation action only where the petitioner has a specific legal interest affected by the trademark (eg, if it is engaged in business in the same industry as the trademark registrant or owns an application that is similar or identical to the trademark). The proposed amendments will ease matters for new market entrants by eliminating the standing requirement, thus potentially creating a larger pool of available trademarks by making it easier to cancel unused marks. The proposed amendments also make it more difficult for a registrant to produce evidence of only token use to oppose cancellation by providing that any evidence of use dated less than three months before a cancellation petition will be disregarded. Moreover, the proposed amendments expand the retroactivity of non-use cancellation decisions. Under the previous law, such decisions were not retroactive at all, but since October 6 2013 they have been partly retroactive (although provisions regarding applicability should be kept in mind).



• Invalidation actions - invalidation actions may be filed based on several grounds, including similarity to a senior registered mark or the fame of an earlier used mark. At present, no set deadline applies for filing invalidation actions with regard to most bases, but actions based specifically on similarity must be filed within five years of registration of the adverse mark. With a view to protecting the current market status, the proposed amendments implement a five-year statute of limitations for invalidation actions based on fame also, consistent with the statute of limitations for actions based on similarity.



• Trademarks not in use - the Supreme Court has previously issued a decision denying damages to a trademark owner due to its failure to use the mark on the designated goods, despite the existence of trademark infringement. The proposed amendments will incorporate this decision into the act by expressly denying a trademark owner's claim for damages if the subject registration is not in use, thereby discouraging parties from registering marks without an intent to use and then later demanding infringement damages or royalties from third parties.

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