Enforcement

Trademark enforcement proceedings

What types of legal or administrative proceedings are available to enforce the rights of a trademark owner against an alleged infringer or dilutive use of a mark, apart from previously discussed opposition and cancellation actions? Are there specialised courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?

Where infringement occurs, the owner of the registered trademark or its exclusive licensee may enforce its rights by filing a trademark infringement suit in a district court. Alternative dispute resolution before certain private entities, such as the Korean Intellectual Property Arbitration Centre, may be considered. The remedies for trademark infringement available under the Korean Trademark Act are outlined below.

Civil proceedings

The plaintiff may seek an injunction against an infringing party (or a party that is highly likely to infringe the trademark right) that acts with or without negligence or wilfulness. Together with an injunction, the plaintiff may seek an order for destruction of the infringing goods and removal of the facilities used to commit the infringement, as well as other measures necessary to prevent the infringement. The plaintiff may also seek a preliminary injunction to prevent infringement. To obtain a preliminary injunction, the plaintiff must show irreparable harm because of the infringement; the court sometimes requires that a bond be posted. In the case of negligent or intentional infringement, compensatory damages are also available. Under the Korean Trademark Act, an infringer’s negligence is presumed.

Criminal penalties

Intentional trademark infringements are subject to criminal penalties of not more than seven years or a fine of not more than 100 million South Korean won.

There is neither a specialised court for trademark cases in enforcement cases nor specific procedural provisions related to trademark enforcement in criminal law. In addition, as an administrative proceeding, it is possible for a trademark owner to file an application for custom seizure. However, the substantial requirements in criminal and civil actions on the basis of trademark infringement shall follow the Korean Trademark Act. The procedural requirements in a civil action shall follow the Korean Civil Act. Such requirements in a criminal action shall follow the Korean Criminal Act.

Procedural format and timing

What is the format of the infringement proceeding?

Discovery, as in the US legal system, is not allowed in Korea. During legal proceedings, a party to an action may request that the court order submission of documents to the person who possesses the documents in which case the court may order document production. The collection and examination of evidence could be made if the parties to the case request appraisal or on-the-spot inspection thereof and thereafter the courts permit it. If necessary, live testimony can be used only in respect of examination of trademark infringement disputes has been used. As to experts, the court sometimes accepts opinion or affidavits, or both, when they want to determine the important facts. It entirely depends on the judge’s discretion as to the adoption of live testimony or such affidavits.

As for criminal proceedings, a trademark owner may file a criminal complaint with the police or the Prosecutor’s Office. Unless the relevant case is complicated or socially influential, the Prosecutor’s Office orders an investigation of the case to be conducted by the police. After an investigation, the police file a report with their opinion on whether to bring an indictment against the accused to the Prosecutor’s Office, which thereafter will decide whether to commence prosecution in court. The trademark owner who filed a criminal complaint is informed of whether the accused infringer was indicted or not. However, if the accused infringer was not indicted, the trademark owner would need to separately file a petition to the Prosecutor’s Office in order to obtain the detailed grounds for non-indictment. The trademark owner is entitled to file an appeal of the Prosecutor’s Office’s decision to not indict the accused infringer.

Burden of proof

What is the burden of proof to establish infringement or dilution?

In an action for damages such as to establish infringement or dilution, a trademark owner has the burden of proving the basis and the amount of damages. The Korean Trademark Act does not recognise punitive damages.

Standing

Who may seek a remedy for an alleged trademark violation and under what conditions? Who has standing to bring a criminal complaint?

The trademark owner or its exclusive licensee, or both, may obtain injunctions against persons using any mark that is identical or confusingly similar to the registered mark. A trademark owner is also entitled to monetary damages from anyone who infringes upon its mark in respect of identical or similar goods.

Under the Korean Trademark Act, it is possible for the trademark owner to grant an exclusive licence of the trademark without recording it in the Trademark Register. Thus, the exclusive licensee can also claim trademark infringement and seek damages even if its licence has not been recorded. The standing to bring a criminal complaint lies with the trademark owner or its exclusive licensee, or both, with the police officers or the public prosecutors. However, only the public prosecutor has standing to bring a criminal complaint to the court.

Border enforcement and foreign activities

What border enforcement measures are available to halt the import and export of infringing goods? Can activities that take place outside the country of registration support a charge of infringement or dilution?

Once a trademark is registered in Korea, the owner (or licensee) may register such mark with the Korea Customs Service (KCS) to enable the KCS to locate infringing goods. When suspected goods are identified by the KCS, it will notify the importer of the suspected goods and the trademark owner, both of whom may submit evidence and statements regarding such goods within 10 days of receiving notification.

Activities that take place outside Korea cannot support a legal charge of infringement or dilution in Korea because the scope of protection of a trademark is limited to the country where it has been registered.

However, activities that took place in foreign countries can sometimes be served as a basis in determining findings of facts. For example:

  • if the mark used in such activities was acknowledged to be well-known in foreign countries;
  • there has been a business relationship between the owner of the mark and the infringer; or
  • the infringer had an intention to infringe upon the rights in the trademark, the Korean court could determine the foregoing circumstances as evidence of trademark infringement.

Border enforcement mechanisms will sometimes be of help to support a charge of infringement or dilution. If Korean customs decides that the infringement of a Korean trademark is obvious, the Korean customs authorities can seize any goods upon import or export.

Discovery

What discovery or disclosure devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country?

Under the Korean Civil Procedure Act, upon receipt of an order for document production, one is obliged to comply with the order in any of the following cases:

  • when a party to a lawsuit possesses documents cited in the lawsuit;
  • when a party requesting documents seeks the review or delivery of such documents; or
  • when the requested documents were prepared for the advantage over the requesting party or discloses a legal relationship between the requesting party and the requested party (eg, commercial books and agreements).

If the requested party does not comply with the order, the Korean courts could acknowledge the requesting party’s claims to be true and order a fine, in which case the requested party would be entitled to appeal the court’s order.

Timing

What is the typical time frame for an infringement or dilution, or related action, at the preliminary injunction and trial levels, and on appeal?

The average period of preliminary injunction from complaint to a decision is approximately four to six months, depending on the complexity of the issues presented by the case. It generally takes six months to one year to obtain a decision in a permanent injunction. As for damages actions, the average time period from complaint to first instance district court judgment is 10 to 12 months.

Limitation period

What is the limitation period for filing an infringement action?

An injunction may be sought at any time if an infringement or threat of infringement is ongoing. However, an action for damages must be instituted within three years of the infringement actually occurring or the owner of the trademark right becoming aware of such infringement.

Litigation costs

What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal?

The value of the subject matter in litigation is typically 100 million South Korean won. As for attorneys’ fees, there is no legally binding standard in Korea. Usually, attorneys representing foreign clients charge an hourly rate of approximately US$300 to US$600. Under Korean law, a plaintiff can recover the full amount of the fee paid to the court and a part of the attorneys’ fees, which is usually up to 10 per cent of the amount of the damages awarded as compensation for infringement. The Seoul High Court ordered that a person who sold counterfeit Louis Vuitton bags in Korea pay 400 million South Korean won as compensation for damages. In view of this decision, the Seoul High Court concluded that the infringer had bad-faith intent in manufacturing a considerably large amount of counterfeit bags by leasing a large factory of approximately 661m2.

Appeals

What avenues of appeal are available?

The complaint of a trial (not preliminary injunction proceeding) is filed with the district court. A party that is not satisfied with the district court’s decision may appeal to the competent High Court, whose decision may subsequently be appealed to the Supreme Court on limited grounds. The Supreme Court will hear appeals from a High Court on grounds of error in interpretation and other violations of the constitution.

Defences

What defences are available to a charge of infringement or dilution, or any related action?

The alleged infringer may argue that:

  • the compared marks are not identical or confusingly similar;
  • there is no similarity in compared goods or services;
  • there is no likelihood of confusion;
  • it used the mark on the basis of a licence agreement;
  • the compared marks are both registered by KIPO and it used the mark on the basis of its trademark registration;
  • the owner of the unregistered mark that was well known in Korea used the mark without engaging in any act of unfair competition before the other party’s application was filed;
  • the mark was used by parallel importation;
  • the other party’s registration is invalid; or
  • the term is generic, etc.

In this regard, under the Korean Trademark Act, even if it is not well known in Korea, a party who has been using its trade name as a trademark may continue to use such trademark if it has previously done so without engaging in any act of unfair competition before the other party’s application was filed. In addition to a defence before the courts, an alleged infringer may file a petition for invalidation or cancellation of registration as a separate proceeding before the IPTAB as a counter action.

Remedies

What remedies are available to a successful party in an action for infringement or dilution, etc? What criminal remedies exist?

Civil remediesInjunctions

The owner of a trademark may go to court to obtain an injunction against any person who is infringing or is likely to infringe its trademark, and require such person to cease and desist any infringement. Below are specific examples of civil remedies that the trademark owner can seek:

  • the destruction of the infringing goods;
  • the destruction of the equipment used to manufacture the infringing items; and
  • any other measures necessary to prevent future infringement.
Money damages

In a trademark infringement action for damages, the plaintiff has the burden of proving and quantifying its damages. Under the Korean Trademark Act, a trademark owner may enter a claim for actual damages, can seek the forfeiture of the profits derived from the infringing activities or seek payment of a royalty that the owner would normally be entitled to receive for use of its registered trademark. Alternatively, the trademark owner can claim damages in an amount equal to the total sales of the infringing goods multiplied by the profit per unit of such goods.

Statutory damages

The Korean Trademark Act adopted a system whereby a trademark owner can claim statutory damages against an infringing party of up to 50 million South Korean won instead of claiming on the basis of actual quantifiable damages.

However, the statutory damages option is only available in cases where the infringing mark is identical or virtually indistinguishable from the injured party’s registered mark and used in connection with goods that are identical or virtually indistinguishable from the goods associated with the registered mark. This system will alleviate the often-difficult exercise of having to prove and quantify actual damages. When the statutory damages option is available, the trademark owner can still elect to seek actual damages instead.

Recovery of reputation

Upon request, the court may in lieu of, or in addition to, damages, order a person who has intentionally or negligently injured the business reputation of a trademark owner or its exclusive licensee on the basis of an infringement, to take necessary measures to restore the business reputation of the owner or its exclusive licensee.

Criminal proceedings

Under the Korean Trademark Act, any person who intentionally infringes a trademark can be imprisoned for not more than seven years or fined an amount of not more than 100 million South Korean won. Any mark or packaging for goods that infringes upon a registered trademark and any machinery used in the production of such goods may be confiscated. However, if it is possible to remove the infringing mark without destroying the goods, the goods can avoid confiscation.

ADR

Are ADR techniques available, commonly used and enforceable? What are the benefits and risks?

The Korean Commercial Arbitration Board and Korean Intellectual Property Arbitration Centre are active institutions that administer arbitration proceedings in respect of disputes related to intellectual property. The arbitration decision has the same effects to the conflicting parties as a decision issued by the Korean courts and, thus, has binding power as a final decision to the parties. It typically takes two to three years to receive a decision from the Korean courts. However, it only takes approximately five months in cases of national arbitration proceedings and approximately seven months in cases of international arbitration proceedings. If both parties agree to proceed with the arbitration, the relevant dispute can be resolved in two to three months after the arbitration is initiated. However, since the parties usually have different arguments regarding intellectual property infringement issues, most of the cases go to trial rather than arbitration proceedings. The additional risk of arbitration is that an arbitration decision cannot be appealed.