Supreme Court decision provides new tool against trademark infringers

In a surprising decision, the Supreme Court has upheld a ruling of the Daegu High Court and recognised for the first time the existence of a presumption of negligence on the part of infringers in cases of trademark infringement, thereby making it easier for plaintiffs to recover damages for infringement (Case No 2013Dah21666). While the Patent Act, Utility Model Act and Design Protection Act all explicitly provide for such a presumption, the Trademark Act does not (although it does provide for a presumption of willfulness in certain cases).  

The Supreme Court reasoned that trademark registrations are public and that knowledge thereof is available to any person exercising ordinary care. Therefore, the court held that it is not unfair to impose a duty of care on businesses, meaning that they must avoid infringing registered marks when using a mark in the course of trade.

In order to rebut such a presumption of negligence, a defendant must provide either a justifiable reason for being unaware of the registered mark, or a justifiable reason for believing that the mark it was using did not fall under the scope of protection of the registered mark. Notably, in the present case, the defendant had actually obtained a registration for its infringing mark, but the fact that the infringing mark had been registered was not recognised as a reason sufficient to rebut the presumption of negligence, since the infringing mark was subsequently invalidated with retroactive effect.   

It remains to be seen how this decision will be interpreted by the courts in future cases, particularly with respect to what constitutes a justifiable reason sufficient to rebut the presumption of negligence.

Jason J Lee and Won Joong Kim, Kim & Chang, Seoul