Liability of Open Market Sites for Trademark

Infringement in Korea

Liability of Open Market Sites for Trademark

Infringement in Korea

September 2012September 2012

Song, KijoongSong, Kijoong

Deputy DirectorDeputy Director

Multilateral Affairs DivisionMultilateral Affairs Division

September 2012September 2012

Song, KijoongSong, Kijoong

Deputy DirectorDeputy Director

Multilateral Affairs DivisionMultilateral Affairs Division

Contents

OverviewOverview11

CasesCases22

ConclusionConclusion33

2

1. Overview

Definition of open market under the Korean law

Cybermall SalesCybermall Sales

33

Telecommunication Sales IntermediaryTelecommunication Sales Intermediary

Auction, G-market, 11st, InterparkAuction, G-market, 11st, Interpark

(1) Hinoki case

Plaintiff is an authorized importer of ‘Hinoki’ (Hair products)

Requested to stop sales of infringing products and defendants stopped the sale

Later, infringing products still being sold

Plaintiff filed a suit for preliminary injunction

Plaintiff is an authorized importer of ‘Hinoki’ (Hair products)

Requested to stop sales of infringing products and defendants stopped the sale

Later, infringing products still being sold

Plaintiff filed a suit for preliminary injunction

(i) Facts

2. Cases

4

Injunction

Court did not find joint liability

- neither “directly or closely contribute nor cause the infringing acts”

- acknowledged open market’s liability as an accessory

- defendant did not implement further actions

damages proceeding

- neither infringement of trademark by the sellers nor act of confusing

- reasoning : all of products turned out to be legitimate

Injunction

Court did not find joint liability

- neither “directly or closely contribute nor cause the infringing acts”

- acknowledged open market’s liability as an accessory

- defendant did not implement further actions

damages proceeding

- neither infringement of trademark by the sellers nor act of confusing

- reasoning : all of products turned out to be legitimate

(1) Hinoki case

2. Cases

(ii) Court’s Decision

5

(2) K2 case

K2 sold outdoor clothes since 1996

Acquired a secondary meaning/a well-known mark. Similar marked goods sold (ex. “K2 Authentic”, “PRO K-2 MOUNTAIN”, etc.)

K2 requested to stop the sale

Defendant accepted the plaintiff’s request only, no further action (no tools to prevent newly uploaded infringing products )

Plaintiff (K2) sued

K2 sold outdoor clothes since 1996

Acquired a secondary meaning/a well-known mark. Similar marked goods sold (ex. “K2 Authentic”, “PRO K-2 MOUNTAIN”, etc.)

K2 requested to stop the sale

Defendant accepted the plaintiff’s request only, no further action (no tools to prevent newly uploaded infringing products )

Plaintiff (K2) sued

(i) Facts

2. Cases

6

Supreme court recognized “K2” as a well-known mark Court denied joint liability

- Online facilities offered to all sellers

- No sufficient evidence of concealing sellers’ identities

Court denied accessory

- Defendant did all it could by searching and blocking

- No reasonable tools to block newly registered ones

Supreme court recognized “K2” as a well-known mark Court denied joint liability

- Online facilities offered to all sellers

- No sufficient evidence of concealing sellers’ identities

Court denied accessory

- Defendant did all it could by searching and blocking

- No reasonable tools to block newly registered ones

(2) K2 case

2. Cases

(ii) Court’s Decision

7

(3) Adidas case

Plaintiff is an exclusive licensee and authorized dealer

Plaintiff requested to prevent sales of counterfeit goods

Defendant took limited measures such as deleting accounts only

No filtering or blocking counterfeit goods from others

Plaintiff sued for injunction

Plaintiff is an exclusive licensee and authorized dealer

Plaintiff requested to prevent sales of counterfeit goods

Defendant took limited measures such as deleting accounts only

No filtering or blocking counterfeit goods from others

Plaintiff sued for injunction

(i) Facts

2. Cases

8

No legal ground as to online market’s legal and contractual duty to protect trademark

No duty of censorship, filtering and monitoring etc.

Acknowledged accessory in case of open market knowingly neglected, having means to prevent

No legal ground as to online market’s legal and contractual duty to protect trademark

No duty of censorship, filtering and monitoring etc.

Acknowledged accessory in case of open market knowingly neglected, having means to prevent

(3) Adidas case

2. Cases

(ii) Court’s Decision

9

Terms of Service disclaiming open market’s liability may be upheldTerms of Service disclaiming open market’s liability may be upheld

General standard established by Court

3. Conclusion

10

Liability is only acknowledged when open market knew or had reason to know infringing act and had specific means to prevent or eliminate the infringing acts.Liability is only acknowledged when open market knew or had reason to know infringing act and had specific means to prevent or eliminate the infringing acts.

Open markets have no responsibilities

- not in a position to decide infringement - preventing present and future possible infringement could wither trade of legitimate products

Open markets have no responsibilities

- not in a position to decide infringement - preventing present and future possible infringement could wither trade of legitimate products

E-mail: kjsong11@kipo.go.kr

11