On 25 November 2022, the South Korean Patent Court ruled on a case concerning limitations on the effect of registered trademark rights. In particular, the Court dealt with the question of whether a party's use of a mark that contained its own name, title and trade name was "in accordance with generally accepted business practices" and thus outside the scope of rights of a similar registered trademark owned by another party.


Article 90 of the Trademark Act provides that trademark rights do not extend to "[a]ny trademark using [another party's] own name, title, or trade name, portrait, signature, seal, or well-known pseudonym, stage name, pen name, and the well-known abbreviated title thereof, in accordance with generally accepted business practices" (emphasis added), so long as such usage is not "for the purpose of unfair competition after registration and establishment of trademark rights". This wording was amended in 2016; in the old Trademark Act, the restriction was applied to trade names (among other things) used "in a common way".

The broad purpose of this clause is effectively to limit the effects of trademark rights in view of the intended spirit of the law and public interest. This does not equate to a limitation on the trademark holder's right to exclusive use of the mark, but rather establishes the conditions under which another party's use would be acceptable and non-infringing.

According to Supreme Court precedent, using a trade name "in accordance with generally accepted business practices" means that it should be used in a way that creates no special distinctiveness. For example, displaying the name in a unique font, colour or style would not constitute "generally accepted business practices", and factors such as the location, arrangement and size of the name, and its combination with other elements, are also considered. Overall, general consumers must be able to recognise that a mark is a trade name just by looking at it.

Further, a "purpose of unfair competition" is understood as being an intention to obtain unfair profits by freeriding on the goodwill or credit of the registered trademark holder. In deciding on this point, the following criteria must be considered in addition to the actual use of the allegedly infringing mark:

  • subjective criteria, such as the party's:
    • motivation for selecting the mark; and
    • awareness of the registered trademark; and
  • objective criteria, such as:
    • the similarity between the marks;
    • the fame of the registered trademark;
    • the similarity in the parties' businesses; and
    • the geographical proximity of the parties' business activities.


Aside from the specifics of the two parties' respective marks, the complainant argued that the Court should apply the old Trademark Act in hearing this case. Several grounds were put forward to support this argument, such as:

  • the complainant's trademark being applied for and registered before the amended Act came into force; and
  • that the wording of the revised Act suggests it should not apply to scope confirmation trials.

However, the Court dismissed these arguments, deciding instead to apply the current (amended) Trademark Act. This meant that the respondent had to show that their usage was "in accordance with generally accepted business practices", rather than "in a common way".

The basic facts of the case were as follows:

  • The complainant was the operator of Haslla Art World – a facility including a museum, a gallery, a hotel, a restaurant and a coffee shop (Haslla Cafe) – and was the owner of a trademark registration for "하슬라" ("HASLLA"), covering café and restaurant services in class 43.
  • The respondent was the operator of a café called "하슬라 가배" ("HASLLA GABAE", where "GABAE" is an old-fashioned way of expressing the word "coffee").
  • Both businesses were located in Gangneung City on the east coast of South Korea.

This case was an appeal from a scope confirmation trial heard by the IP Trial & Appeal Board (IPTAB) in which the complainant sought to show that the respondent's use fell within the scope of the complainant's registered trademark rights.

The specific usage in question was the respondent's store signage, shown in Figure 1.

Figure 1: respondent's store signage. The smaller sign on the left reads "하슬라" ("HASLLA"), written vertically, while the larger sign reads "하슬라 가배" ("HASLLA GABAE"), together with the word "Café" in English.

Scope confirmation trials are inter-partes administrative procedures used to determine whether a specific usage of a mark falls within the scope of rights of another party's registered trademark. Such trials are often filed alongside a civil infringement suit in which an injunction or compensatory damages, for example, may be sought. As scope confirmation trials are heard by IPTAB subject matter experts, the decision – while not legally binding – may be submitted in a civil suit and may carry weight.


The Court ultimately dismissed the appeal in favour of the respondent, upholding the IPTAB's decision. This means that the defendant's usage of its trade name "HASLLA GABAE" (in Korean) on signage for a café in Gangneung City was not considered to infringe the registered trademark HASLLA (in Korean). In reaching its decision, the Court considered the following factors, among others.

Use in accordance with generally accepted business practices
The Court held as follows:

  • The respondent's trade name was "HASLLA GABAE", which corresponded to the name used on the sign.
  • The text was not expressed in a way that created any special distinctiveness, and the addition of the English term "Café" was descriptive of the services offered.
  • "Haslla" itself is the old name of Gangneung City, used during the Goguryeo period (37 BC – 668 AD) of Korean history. This was common knowledge among residents of the city.
  • "Gabae" is a transliteration of the Chinese characters for "coffee", and the term was widely used to refer to coffee during Korea's period of enlightenment.
  • The respondent seemed to have conceived of the name by combining the old name for "Gangneung City" with the old term for "coffee".
  • Signboards with text surrounded by bulbs were commonly found across the country.

Purpose of unfair competition
The Court held as follows:

  • The complainant began operating a coffee shop in 2013, but had referred to it using various names over the years.
  • An internet search for "Haslla Café" (in Korean) revealed posts predominantly relating to the complainant's coffee shop but also results relating to the respondent's store.
  • While in the same city, the complainant's and respondent's stores were not in close proximity (they were approximately 17 kilometres apart).
  • The concept and interior decoration of the stores were different. The respondent's café was based on the theme of the Korean enlightenment period.
  • The name "Haslla" was included in the names of roads, schools, libraries and festivals in Gangneung City.
  • Survey results showed a high awareness of the meaning of "Haslla" among Gangneung City residents, and a reasonable awareness among residents of other areas in the same province.


This case provides some further clarification on how exceptions to registered trademark rights are considered under article 90 of the Trademark Act. While the respondent's trade name in this case included the registered trademark in its entirety and both parties operate similar businesses, this naturally does not mean that usage of a trade name provides blanket protection against trademark infringement in all cases. On the contrary, the way in which the trade name was used was considered in detail in the context of the specific location of the business, and in this case it was not considered that consumers would be confused.

Ultimately, trademark owners need not be alarmed by this decision as the exception clause does not apply to bad faith usage – in cases of intentional infringement, trademark rights can still be enforced, regardless of whether the infringer is using a trade name.

For further information on this topic please contact Jonathan Masters or Sang-Eun Shin at NAM & NAM by telephone (+82 2 753 5477) or email ([email protected] or [email protected]). The NAM & NAM website can be accessed at