"Protection of Good Faith Prior Trademark Users" KIPO, Amendment to Unfair Competition Prevention Act

#Mr. A started a small-scale clothing sales business using the ‘ㄱ’ trademark without registering it. However, by chance, Mr. B began using an identical or similar trademark ‘ㄱ’ and conducted marketing through SNS and TV advertisements, rapidly increasing brand recognition in a short period. Mr. B also sent a warning letter to Mr. A, requesting the cessation of sales of products using the ‘ㄱ’ trademark, citing that it constituted unfair competition. In this case, can Mr. A sell products using the ‘ㄱ’ trademark?

In conclusion, going forward, even if one has not registered a trademark like Mr. A, a path will open for bona fide prior users of a trademark to be protected.

The Korean Intellectual Property Office (KIPO) announced on the 27th that it will amend and enforce the “Act on the Prevention of Unfair Competition and Protection of Trade Secrets” to allow those who have used a widely known third party’s trademark (hereinafter referred to as a famous trademark) identically or similarly without unfair intent to continue using the trademark.

Provided by the Korean Intellectual Property Office

The amended law will be applied and enforced starting from the 29th of this month. The core of the amendment is that those who have used a famous trademark identically or similarly before others, like Mr. A, may continue to use the trademark without it constituting unfair competition, provided there is no unfair intent.

However, in this case, since both the ‘famous trademark’ and the ‘prior user’s trademark’ coexist in the market simultaneously, there is a risk that consumers may mistake or confuse the two trademarks as products from the same seller.

Accordingly, the KIPO has stipulated in the amended law that the holder of the famous trademark may request the prior user to display necessary markings to prevent confusion or misunderstanding.

Before the enforcement of the amended law, even if one used a trademark first, once a similar or identical third party’s trademark became famous, the prior user could no longer use that trademark.

For the same reason, even if one used a trademark first, they had to face legal actions such as receiving warning letters from the famous trademark holder, and ultimately had to replace storefront signs or discard produced goods.

However, from the time the amended law is enforced, the KIPO expects that at least prior users of trademarks will face fewer unnecessary disputes and suffer less damage in good faith.

Starting from the 29th, the KIPO will also implement a statute of limitations system for claims to prohibit idea theft. This system clearly stipulates that the statute of limitations for claims to prohibit unauthorized use of stolen ideas is “3 years from the date the act is recognized or 10 years from the start of the unfair competition act.”

Additionally, the amended law expands the scope of on-site investigations during administrative investigations of unfair competition acts to include ‘materials’ such as digital files, in addition to documents, ledgers, and products. It also mandates the compulsory recovery of subsidies received by trade secret original certification institutions from the government if used for other purposes.

Yang Jae-seok, Director of the Industrial Property Protection Policy Division at KIPO, stated, “The amended law enables protection for those who have used trademarks first in good faith and introduces a statute of limitations for claims prohibiting idea theft, focusing on stabilizing and revitalizing idea transactions. As the main agency in charge of unfair competition acts, KIPO will continue to strive to establish a sound trading order.”

This content was produced with the assistance of AI translation services.