Three Things to Know about Protection of Business Trade Dress in Korea

Trade dress has been defined by Korean courts as the total image and appearance of a product, service or business in connection with commercial activities. For those who are interested in protection of the trade dress in an overall appearance of place of business or a method of product sales or service provision (“Business Trade Dress”) in Korea, this article will provide preliminary information on the protection of the Business Trade Dress and the liabilities for infringement thereof.

1. Basis for Protection of Business Trade Dress (Prior Court Cases)

Generally speaking, a trade dress cannot be registered in Korea under the statutory trademark law. However, the courts have allowed protection of trade dress under the Unfair Competition Prevention and Trade Secret Protection Act (“UCPA”). In the cases of the Business Trade Dress, in particular, a plaintiff would need to prove an infringement under the UCPA’s general category of unfair competition act by presenting that, inter alia, (i) the trade dress at issue was the outcome of the owner’s investment and efforts, and that (ii) it was used by the infringer without the owner’s permission in a manner contrary to fair commercial practices or competition order.

2. Increased Protection of Business Trade Dress under the UCPA

The UCPA has been recently amended, which took effect on July 18, 2018, to explicitly add the Business Trade Dress to the definition of “mark” identifying one’s business. Therefore, an owner of the Business Trade Dress can sue an infringer under the specific set of rules of the UCPA designed to protect business marks (including name, trade name, and trademark). That is, an infringement of the Business Trade Dress can be proved as unfair competition act by the following elements: (i) an infringer’s use of the same, or a similar, Business Trade Dress (which is widely recognized in Korea) of the owner, and (ii) thereby causing confusion as to the owner’s business or harming the distinctiveness of the Business Trade Dress or reputation of the owner. As such, the owners of the Business Trade Dress are now protected under the same rules that protect the legal holders of names, trade names, and trademarks.

3. Criminal Liability of Infringement of Business Trade Dress

As a result of the recent amendment to the UCPA as described above, an infringement of the Business Trade Dress now constitutes as unfair competition act subject to criminal liability under the UCPA. The sanction is rather severe in that the infringers would face either imprisonment of up to three years or criminal fine up to 30 million Korean won (approximately US$30,000.00), in addition to civil liabilities for damages and other remedial actions.

Due to the increased protection of the Business Trade Dress under the UCPA, foreign companies doing business in Korea should involve more investigation efforts to assess possible legal actions against infringing practices. At the same time, internal compliance activities would have to be in place to prevent any possible violation of the UCPA.