Hermès alleged that Play No More copied its Kelly and Birkin handbag designs, which caused consumer confusion. Accordingly, Hermès claimed that Play No More infringed Hermès' economic interest in a manner contrary to fair commercial practices or competitive order thereby committing unfair competitive acts under Article 2(1)(a), (c), and (j) of the Korean Unfair Competition Prevention and Trade Secret Protection Act ("Unfair Competition Act"). The court of first instance ruled in favor of Hermès by finding that Hermès had established its claim under Article 2(1)(j) of the Unfair Competition Act ("infringing the outcomes, etc. of other's investment or efforts"; hereinafter "Paragraph J") against Play No More (then represented by Bae, Kim & Lee).
In this respect, Yulchon effectively persuaded the appellate court that Hermès' claims are meritless and that Play No More's acts constitute fair business practices by providing the following legal and factual support: (i) sound legal argument and supporting reasoning explaining the appropriate scope and standard for determining violation under Paragraph J, particularly by taking into consideration a systematic relationship between Paragraph J, a relatively new legal section, and other laws, including intellectual property laws and the Civil Code; (ii) several factual grounds supporting a designer's creativity, concept, and philosophy embodied in the designs of Play No More's products; (iii) a counterargument explaining the characteristics of the emerging trend in the fashion design industry; and (iv) analyses of case precedent from both Korean and foreign courts on trademark protection for the design of products.
As a result of Yulchon's effective explanation and sound legal reasoning, the Seoul High Court found that "Hermès failed to show that Play No More infringed its economic interest in a manner contrary to fair commercial practices or competition order, as it solely relied on the fact that Play No More's products are partially similar to its products." Accordingly, the appellate court reversed the lower court's ruling and dismissed all of Hermès claims.
Given that there was a recent decision in favor of Hermès against Play No More involving the same cause of action with respect to the Hermès design of the Ginger bag ("Ginger Bag Case"), Yulchon (i) effectively argued the difference between the current case and the Ginger Bag Case by providing a thorough and precise analysis of the court records of the Ginger Bag Case, which was obtained by filing a motion for issuance of subpoena duces tecum, (ii) obtained favorable opinions on behalf of Play No More from several professional and expert witnesses in the fashion industry, and (iii) provided a persuasive in-court presentation explaining why the Hermès claims are without merit.
In view of the fact that there are no clear tests for determining violation of Paragraph J in a case involving the design and shape of a product, this case is especially noteworthy as a significant contribution to the development of the court's standards for determining the merit of a claim under the new Paragraph J. The case has been appealed to the Korean Supreme Court.