Korea's Supreme Court has ruled that using a specific expression in a trademark that creates a distinctive impression on consumers within the same product category should be considered trademark infringement.
According to legal circles on Wednesday, the Supreme Court's Third Division (Presiding Justice Lee Heung-goo) overturned the lower court's acquittal of A, a cosmetics manufacturing and sales company executive charged with trademark law violations, and remanded the case to Seoul Central District Court on December 20.
A was indicted for advertising, selling, and storing lipsticks bearing the trademark "Nudism Holic Matte Lipstick" as "CATALIC Narcisse Nudism Holic Matte Lipstick" between February and March 2020. The trademark was similar to "NUDISM," which Company B had registered for cosmetics in October 2018.
The key issue was whether "Nudism" constitutes the "dominant element" among the trademark's components. A dominant element refers to the core part of a trademark that attracts consumer attention and identifies the source of products.
The first and second instance courts reached different conclusions. The first instance court found that the expression "Nudism" constituted the dominant element and imposed fines of 1 million won on both A and the company. However, the second instance court acquitted them, ruling that "Nudism" was not the dominant element. The appellate court stated, "The trademark used by the defendants should be specified as 'Catalic Narcisse Nudism Holic Matte Lipstick,' not 'Nudism Holic Matte Lipstick,'" and determined that "the dominant element of the trademark in this case is 'Catalic,' not 'Nudism.'"
The Supreme Court disagreed. It pointed out that both "Nudism" and "Catalic" constitute dominant elements of the trademark. The court stated, "Whether a component part constitutes a dominant element must be determined by comprehensively examining whether that part is well-known or famous, whether it creates a strong impression on general consumers, and what proportion it occupies in the overall trademark." The court added, "In determining dominant elements, the relative level of distinctiveness compared to other components, as well as the state and degree of combination, must also be considered."
The Supreme Court also ruled, "The English word 'Nudism,' pronounced as 'nudism,' is distinct from 'nude' and is not an expression commonly used in daily life, and it is difficult for general consumers to easily conceptualize its meaning." The court determined that "it cannot be concluded that this is a term commonly used in the cosmetics industry in actual business transactions." Furthermore, the court stated, "The 'Catalic' portion is also difficult to view as an expression that directly evokes the quality, efficacy, or purpose of the product," and ruled that "both Nudism and Catalic constitute dominant elements of the trademark in this case."
The Supreme Court added, "The two trademarks differ only slightly in font style but share identical English spelling, making their appearance similar, and both are called 'Nudism.'" The court concluded, "If this trademark is used on lipsticks, there is a risk of causing general consumers and traders to be confused or mistaken about the source of the products."
