2002Hu2020 Revocation of Registration(Sang)

by the Supreme Court of Korea

Justices Bae Ki-won(Presiding Justice), Yoo Ji-dam, Lee Kang-kook, Kim Yong-dam(Justice in charge)

Main Issues

1. Whether a domestic importer's importing the goods affixed with the trademark and distributing them domestically constitute a trademark right holder's domestic use of the trademark in case where the trademark right holder affixed the trademark in a foreign country (Affirmative with qualification)
2. The case holding that a domestic importer's importing bags affixed with the registered trademark "MANHATTAN PASSAGE" from a foreign country and distributing them domestically constitute a trademark right holder's domestic use of the trademark where the trademark right holder affixed the trademark in a foreign country

Summary of Decision

1. Although a trademark right holder merely affixed the trademark upon the goods in a foreign country without transferring them either directly or through an agency or showing the trademark during the advertisement of the goods in our country, etc., the trademark right holder affixing the trademark should be viewed as having used it domestically unless special circumstances are demonstrated, if domestic traders or consumers knew in light of social norms that the trademark represents the goods related to the trademark right holder's business who affixed such trademark, and they were distributed after being imported by the third party to our country in the original condition of being affixed with the trademark by the right holder through dealings, displays, etc. in the normal conduct of businesses domestically.
2. The case holding that a domestic importer's importing bags affixed with the registered trademark "MANHATTAN PASSAGE" from a foreign country and distributing them domestically constitute a trademark right holder's domestic use of the trademark where the trademark right holder affixed the trademark in a foreign country

Reference Provisions

1. Article 2 (1) 6 (b) and Article 73 (1) 3 of the Trademark Act
2. Article 2 (1) 6 (b) and Article 73 (1) 3 of the Trademark Act

Article 2 of the Trademark Act (Definitions)

(1) The definitions of terms used in this Act shall be as follows: <Amended by Act No. 5083, Dec. 29, 1995; Act No. 5355, Aug. 22, 1997>

6. The term "use of a trademark" means an act falling under any of the following items:

(b) An act of transferring or delivering goods or packages of goods on which a trademark is indicated, or act of displaying, exporting or importing them for such purpose; and

Article 73 of the Trademark Act (Revocation Trial on Trademark Registration)

(1) If a registered trademark falls under any of the following subparagraphs, a revocation trial on the trademark registration may be requested: <Amended by Act No. 5355, Aug. 22, 1997>

3. Where an owner of a trademark right, exclusive or non-exclusive licensee fails to use the registered trademark on the designated goods in Korea without any justifiable reason, for three or more years consecutively before a revocation trial is requested;

Reference Cases

1. Supreme Court Decision 98Hu751 delivered on April 27, 2001, Supreme Court Decision 2002Hu2273 delivered on December 12, 2003

• Plaintiff, Appellant: Gabushikigeisha Leisure Products (Patent Lawyer Lee Sang-sub and 21 others, Counsel for plaintiff-appellant)

• Defendant, Appellee: Choi Kyung-rim (Patent Lawyer Kim Jong-yoon, Counsel for defendant-appellee)

• Judgment of the court below: Patent Court Decision 2002Huh2419 delivered on August 23, 2002

• Disposition: The court below's decision is reversed, and the case is remanded to the Patent Court.

Reasoning

1. The judgment of the court below

The court below first acknowledged that the plaintiff, a trademark right holder for the registered trademark of this case (Registration No.415718), which is composed of "MANHATTAN PASSAGE" manufactured bags bearing the registered trademark of this case in Japan, exported and sold them by airmail via Nissan Air Cargo Corp. approximately on July 10, 2001, to Yoon Chul, who operated "Trebien Co." in Korea. Further, the court below decided to the purport that the plaintiff's acts of selling bags affixed with the registered trademark of this case from Japan to Yoon Chul in Korea cannot be viewed as an act of a trademark right holder's use of the registered trademark in Korea in every aspect under Article 73(1)3 of the former Trademark Act on the following grounds; because the plaintiff's acts of affixing the bags, one of the designated products of the registered trademark of this case, with the registered trademark of this case, and transferring rights to the bags with the registered trademark of this case to others or actual controls over them all occurred within Japan, the plaintiff's acts of having affixed or marketing the goods or packing them with the registered trademark of this case marked on the package within this country do not constitute transfer or delivery; the main role player of importing the above goods is not the plaintiff but Yoon Chul; however, there is no evidence proving Yoon Chul as an exclusive licensee or a general licensee of the registered trademark of this case; the legal effects of using the registered trademark of this case arising from Yoon Chul's imports as well as sales of them do not belong to the plaintiff as the trademark right holder although Yoon Chul sold the above bags to other domestic sellers by means of normal transactions because there is also no evidence of relationship between the plaintiff and Yoon Chul allowing such attribution.

2. The judgment of this Court

However, we find it hard to accept the court below's judgment set out in the above.

A. Although a trademark right holder merely affixed the trademark upon the goods in a foreign country without transferring them either directly or through an agency or showing the trademark during the advertisement of the goods in our country, etc., the trademark right holder affixing the trademark should be viewed as having used it domestically unless special circumstances are demonstrated, if domestic traders or consumers knew in light of social norms that the trademark represents the goods related to the trademark right holder's business who affixed such trademark, and they were distributed after being imported by the third party to our country in the original condition of being affixed with the trademark by the right holder through dealings, displays, etc. in the normal conduct of businesses domestically (see Supreme Court Decision 98Hu751 delivered on April 27, 2001).

B. According to the above legal principles and the records, Yoon Chul's importing of the bags, upon which the plaintiff affixed the registered trademark of this case, directly from the plaintiff and transferring those in their original conditions to other domestic distributors constitute normal transactions, and it is hard to view the above behavior of importing∙transferring of the goods as mere pretexts to avoid revocation on trademark registration on the ground of failure to use the registered trademark. Thus, we held that the plaintiff, who affixed the registered trademark of this case in Japan, justifiably used the registered trademark of this case on its designated goods.

Nonetheless, the court below decided not to acknowledge the plaintiff's domestic use of the registered trademark of this case, and in doing so, it erred by misunderstanding legal principles as to the use of the trademark, which affected the conclusion of its judgement.

3. Conclusion

Therefore, the court below's decision is reversed and the case is remanded for a new trial ∙ determination to the court below, and it is so decided as per Disposition by the assent of all Justices who heard the case.