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BOOK CHON’s Success Story - 2010: Won a Trademark Case in all Courts including Supreme Court
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15-11-13 15:33
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Success Story - We, BOOK CHON, as the Plaintiff's attorney, invalidated a registered Korean trademark based on the fame of our US client's mark.
 
 
 
We, BOOK CHON, introduce a Korean trademark case that we, as the Plaintiff's attorney, obtained a favorable decision from the Korean courts:
 
(A) Background of the Case
 
(a) In 2008, our client, "Gateway, Inc." (hereinafter "Plaintiff") learned that a Korean company (hereinafter "Defendant") filed a trademark for "emachines" (hereinafter the "Subject Mark") in connection with personal computers, etc. with the Korean Intellectual Property Office ("KIPO") on June 2, 2005, and registered the trademark on November 8, 2006.  "Plaintiff" is an American corporation located in Irvine, California, which later became an affiliate of Acer Incorporated, a Taiwanese company.
 
(b) Initially the name of the Plaintiff's company was "eMachines, Incorporated."  This company was subsequently acquired by Gateway, Incorporated upon which the company name was changed to Gateway, Inc.  eMachines, Incorporated had registered a trademark "EMACHINES" (hereinafter the "Cited Mark") in European Union as well as in the US in connection with personal computers.  The company achieved a great sales record and ranked third in the world in the area of personal computer sales.
 
eMachines, Incorporated was a corporation established in the US around September, 1998 by the joint-investment of Sambo Computer Co., Ltd., et al., a Korean company (the "Investing Company").  Until early 2002, the Investing Company manufactured all its computers under the Cited Mark and supplied them to eMachines, Incorporated.  Thereafter, until 2005, when the Investing Company went bankrupt, the Investing Company was the top supplier of the Cited Mark branded computer.
 
(c) During investigation of the Defendant, the Plaintiff discovered  that a person who was a director of the Investing Company between 2001 and 2006 was also the representative director of the Defendant from 2003 to 2005.
 
From the above facts, the Plaintiff deduced that the person noted above who was the representative director of the Defendant knew that the Cited Mark was not registered in Korea and rushed to file the Subject Mark with the KIPO and obtained registration in Korea before the Plaintiff could file and register the Cited Mark in Korea.
 
The Plaintiff firmly believed that the Defendant filed and registered the Subject Mark in Korea in order to obtain an unfair advantage in Korea by use of a mark that is similar to the Cited Mark, which is well-known to consumers in the US.  The Plaintiff filed a request for invalidation of the registration of the Subject Mark with the Trial Board of the KIPO on May 27, 2008, on the basis of Subparagraph 12 of Paragraph 1 of Article 7 of the Korean Trademark Act, which stipulates the grounds for invalidation.
 
(B) Decision of the Trial Board
 
However, the Trial Board rejected Plaintiff's request. The gist of the grounds for rejection are as follows:
 
We, the Trial Board, cannot acknowledge that the Cited Mark was well-known in the US from the following materials, which the Plaintiff submitted:
 
- the articles in Wikepedia: In sales volume in the world of personal computers, the Plaintiff ranked fifth until early 2000 and was third by the end of 2003.
 
- the articles in E-daily and Digital Time: In the desktop computer market of the US, the Plaintiff ranked fifth in 2003 and fourth in 2004.
 
- the articles in various magazines: the Plaintiff received the “Bravo Award 2003” by big distributors such as Best Buy and Circuit City, and was appointed the best company in 2002 and 2003.
 
Furthermore, the following materials that the Plaintiff submitted also do not prove that the Cited Mark was well-known in the US.
 
- the Plaintiff's 2005 annual report: Personal computers bearing the Cited Mark were sold to general consumers in the US and Canada through more than 7,000 US retailers, including Best Buy, Office Depot, and Circuit City.
 
- the advertising leaflets of big distributors: In these leaflets computers bearing the Cited Mark were shown.
 
The above materials show that the Plaintiff did not use the Cited Mark independently, but along with other company's computer products and in other company's advertising leaflets.
 
The Plaintiff submitted the materials regarding filing or registrations of the Cited Mark in 50 countries, including the US, Switzerland, UK, France, Germany, Argentina, Brazil, China, Japan, Taiwan, Hong Kong, Indonesia. However, this fact does not conclude that the Cited Mark was well-known in the US.
 
The Plaintiff also submitted the following materials:
 
- report by American Securities Committee: The sales amount of products bearing the Cited Mark between 1998 and 2000 was described.
 
- the Plaintiff's sales amount and quantity of products bearing the Cited Mark between 2000 and 2007.
 
However, the Plaintiff's sales amount and quantity after 2001 were  executed as statements by a counsel of the Plaintiff, and is not objective. Therefore, materials above could not prove that the Cited Mark was well-known in the US.
 
In conclusion, from the above materials submitted by the Plaintiff, we recognize that the Cited Mark of the Plaintiff is known to some extent in connection with desktop computers in the US. However, we cannot conclude that the Cited Mark was well-known in foreign countries, including in the US at the time of filing the Subject Mark in Korea. Therefore, we reject this request.
 
(C) Decision of the Patent Court
 
The Plaintiff filed an appeal against the above decision of the Trial Board of the KIPO before the Patent Court.  The Patent Court overturned the decision of the Trial Board and rendered a favorable decision for the Plaintiff on January 15, 2010 (Case No. 2009 HEO 5356).  The decision of the Patent Court is summarized:
 
We, the Patent Court, overturn the decision of the Trial Board on the following grounds:
 
(a) In regard to the fame of the Cited Mark in the US:
 
We accept the Plaintiff's assertions on the factual matters mentioned above.
 
In addition, we accept the following facts:
 
- Personal computers bearing the Cited Mark were widely sold all over the world: approximately 1,650,000 in 1999, 1,450,000 in 2000, 1,130,000 in 2001, 1,430,000 in 2002, 1,970,000 in 2003, 1,930,000 in 2004, and 1,740,000 in 2005.
 
- In the US, the Plaintiff sold its personal computers through advertising leaflets, etc. of big distributors, and ranked fifth in 2000, third in 2003, and fourth in 2004 in term of market share in personal computers.
 
In view of the above facts and materials, we can ascertain that the Cited Mark was conspicuously well-known in the US by the June 2, 2005 filing of the Subject Mark in Korea.  Furthermore, the Subject Mark is very similar to the Cited Mark in sound and appearance.
 
(b) In regard to the unfair purpose of the Defendant:
 
We recognize the deceitful purpose of the Defendant for the following reasons: the Cited Mark is conspicuously well-known in the US; the Subject Mark is very similar to the Cited Mark; the goods related to the two marks are all computers; and the person who was a director of the Investing Company was also the representative director of the Defendant.
 
In conclusion, the Defendant filed and registered the Subject Mark in Korea in order to obtain an unfair advantage by free-riding on the fame of the Cited Mark, and thus its registration shall be invalidated on the basis of Subparagraph 12 of Paragraph 1 of Article 7 of the Korean Trademark Act.
 
(D) Decision of the Korean Supreme Court
 
The defendant filed an appeal against the above decision of the Patent Court before the Korean Supreme Court.
 
However, the Supreme Court rejected the Defendant's appeal on May 27, 2010 (Case No. 2010 HU 593), and the above decision of the Patent Court became final and conclusive.
 
(E) Appraisal of this Case
 
This case is a recent representative one that illustrates that a domestic trademark registration which is registered in order to gain an unfair advantage by imitating a trademark well-known in foreign countries can be invalidated by producing evidence and persuasive statements before the Korean courts. In the future, this case will likely operate to inhibit ill intentions to file and register marks that are well-known in foreign countries but not yet registered in Korea. We are very pleased with the successful outcome of this case as attorneys to the Plaintiff, Gateway, Inc.
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