Introduction
Facts
Decision

Comment


Introduction

In the first South Korean ruling of its kind, the Seoul Central District Court recognised that a shop's general appearance and decorative elements are protectable trade dress under the Unfair Competition Prevention and Trade Secrets Act.

The operator of a dessert café chain sued the franchisor of a similar chain for unfair competition on the basis that the latter was copying its signature soft ice cream dessert and the unique appearance of its cafés.

Facts

The plaintiff, Softree – a high-end dessert café franchise in South Korea – offered a signature dessert consisting of soft vanilla ice cream topped with real pieces of honeycomb and honey. The defendant, Milkcow, operated cafés which mimicked the plaintiff's café concept and sold the same dessert with a similar presentation. Softree sought an injunction against Milkcow on the following grounds:

  • Milkcow's manufacture and sale of its honeycomb ice cream dessert infringed Softree's rights under the dead copy provision of the act (Article 2(1)(ix)).
  • Milkcow's adoption of Softree's interior and exterior design components infringed Softree's trade dress under the catch-all provision of the act (Article 2(1)(x)).
SoftreeMilkcow

The act's dead copy provision prohibits selling, renting, displaying, importing or exporting a product which imitates the appearance of another person's product (eg, shape, pattern, colour, gloss or a combination of these attributes), with some limitations (eg, if the imitation product was manufactured more than three years after the original product was first made or if the product's appearance is common).

The act's catch-all provision was introduced on January 31 2014 and prohibits interference with another person's right to profit by appropriating (without permission) for one's own business use anything which the other person produced through considerable effort and investment in a manner that contravenes fair commercial trade practice or competition. This broad provision is the only provision in the act which proscribes general acts of unfair competition; until this case, it had never been interpreted by the courts.

Milkcow characterised Softree's product as merely a piece of honeycomb placed on top of ice cream, arguing that this was not a unique idea in the South Korean marketplace. Milkcow also argued that Softree's shop design elements were common designs.

Decision

The court found in favour of Softree, noting that Milkcow imitated not only the idea of Softree's dessert, but also Softree's exact expression of that idea. The court further found that Milkcow was using exterior signage, menu boards, ice cream cone rings and a logo that looked very similar to Softree's, as well as identical ice cream cone and honeycomb displays. The court adjudged that these six components (compared in the following table) amounted to Softree's trade dress, as they gave Softree cafés their unique atmosphere.

SoftreeMilkcow


The court granted a permanent injunction against Milkcow's sale of its honeycomb desserts as well as its use of the six Softree shop design components described above, on the basis of the act's dead copy and catch-all provisions, respectively. In particular, the court held that it was unjust for Milkcow to adopt Softree's shop design elements, which were conceived and developed by Softree through substantial effort and investment.

Comment

This case is significant, as it is the first South Korean decision to interpret the catch-all provision of the act and specifically to recognise that it protects a store's substantial effort and investment in designing its look and feel.

For further information on this topic please contact Yong-Gab Kim, Young Joo Song or Angela Kim at Kim & Chang by telephone (+822 3703 1114) or email ([email protected], [email protected] or [email protected]). The Kim & Chang website can be accessed at www.kimchang.com.