Golf is one of the most popular sports in South Korea. Because top-quality golf balls can be expensive, there is a substantial market for refurbished golf balls (typically balls recovered from golf courses after being lost during play). A South Korean court recently held that the use of the original trademarks on these refinished balls by a refinisher constitutes infringement of the original manufacturer's trademark rights (in contrast to the approach taken in other jurisdictions such as the United States).
Facts
Refinished Ball Korea Co, Ltd (RBK) refinished and resold golf balls. RBK's refinishing process involved peeling, painting and coating used golf balls, re-affixing Acushnet Company's TITLEIST and PROV1 marks on the balls and then selling them in packaging bearing the disclaimer "lost ball" or "premium refinished", as shown below. Acushnet asserted a trademark infringement claim against RBK in the Seoul Central District Court.(1)
Decision
RBK argued that Acushnet's trademark rights were exhausted by the sale of the original golf balls. However, the court dismissed this argument, finding that the refinishing process was so extensive that RBK's refinished golf balls could not possibly maintain the same quality as Acushnet's new golf balls.
RBK also argued that there was no risk of consumer confusion due to the use of Acushnet's trademarks, because the packaging clearly indicated that the product was a lost or refinished ball and included RBK's company name, while the balls themselves were marked as "refinished". However, the court held that this was insufficient because consumers could still be confused and were potentially encouraged to believe that Acushnet was in the business of making refinished golf balls (which it was not). RBK was ultimately ordered to stop using Acushnet's trademarks on golf balls, golf ball packaging and related items (eg, golf ball pouches).
Comment
This decision is now final and conclusive and is a substantial victory for original golf equipment manufacturers in South Korea. Resellers of used equipment can no longer rely on the original manufacturer's trademarks to sell used products that have been refinished or refurbished beyond minor cleaning or repairs.
