[2] Criteria for recognition of damage caused by reverse confusion in the use of a trade name

[2] In a case where the business size of a person who uses a trade name first and the same as the trade name of a person who uses it lasts is larger than that of a person who uses it later (the latter user) and its trade name is widely known, in a case where the latter user misleads consumers as if the source of the goods of the latter user is the latter user by taking advantage of the reputation or consumer credit of the latter user, etc. due to the latter user's use of the trade name, and the latter user's credit is damaged as if the latter user is the latter user, it shall be deemed as damage caused by reverse confusion, and there is no room to recognize the latter user's liability for damages. However, in light of the legislative purport of the Commercial Act and the Unfair Competition Prevention and Trade Secret Protection Act, which protects the trade name, in cases where the latter user's business is different from the latter user's business or it is not closely related to the nature, contents, business method, consumers' floor, etc., damage caused by reverse confusion cannot be recognized

1. As to the assertion on the mutual rights under the Commercial Act

Article 23(1) of the Commercial Act provides that no person shall use a trade name that may be mistaken for the business of another person for an unlawful purpose. The trade name that may be mistaken for the business of another person shall not be limited to the trade name used for the same business as that of the other person. However, in determining whether a trade name may mislead or confuse the general consumers as to the business entity, the trade name shall be compared and observing the two trade names in order to comprehensively consider whether the trade name is closely related to one another in terms of the nature, contents, business method, customer floor, etc. of each business, and ordinary consumers consider that both business entities are related to one another, or whether the trade name of another is widely known so that absolute trust from ordinary consumers is acquired due to the reputation of the company (see Supreme Court Decision 96Da24637, Oct. 15, 1996).

According to the reasoning of the judgment of the court below and the reasoning of the judgment of the court of first instance cited by the court below, the plaintiff company was incorporated on June 20, 1995 with the location of its main office of the Seoul Special Metropolitan City and its purpose of establishment by wholesale and retail business of electronic components, semiconductor parts, export and import business, etc., and it was changed the trade name on December 29, 1995 to "SPcom Co., Ltd.," and completed each change thereof on November 3, 1999. The non-party Korea Electric Power Co., Ltd. established the defendant company's 200 billion won by using its main office of the defendant company's 0 billion won as its main office of its 5 billion main office of the company's 20 billion main office, and the defendant company's 200 billion main office of the company's 200 billion main office of the defendant company's 200 billion main office of electronic telecommunications facilities and electronic equipment, and it is recognized that the defendant company's 20000 billion main office of the defendant company's main business.

In light of the above legal principles and records, the above fact-finding and judgment of the court below are justified, and there is no error in the misapprehension of legal principles as to the mutual right under the Commercial Act, or there is no error in the misapprehension of legal principles as to the facts against the rules of evidence, as otherwise alleged in the grounds of appeal.

In addition, as long as the above determination by the court below is just, the defendant company's assumption that it constitutes a person who uses a trade name that could be mistaken for the business of the plaintiff company, and the defendant company did not have any improper purpose to mislead the plaintiff company about its own business as the business of the plaintiff company in using its trade name shall not be a legitimate ground for appeal.

2. As to the assertion on the prohibition of unfair competition

According to the reasoning of the judgment of the court below and the reasoning of the judgment of the court of first instance cited by the court below, the court below rejected the plaintiff's assertion that the trade name of the plaintiff company constitutes an act of confusion of business entities under the Unfair Competition Prevention and Trade Secret Protection Act, since it is hard to believe that the evidence of the judgment of the court below, which seems that the trade name of the plaintiff company was widely known in the Republic of Korea as a business mark representing the plaintiff company's electronic equipment, electronic parts, wholesale and retail business of semiconductor parts, and export and import business, and there is no other evidence to acknowledge it. In light of the records, the court below's fact-finding and judgment are justified

3. As to the assertion on reverse confusion

In the event that the business size of a person who uses a trade name first (hereinafter referred to as "advance user") is larger than that of a person who uses the same or similar trade name later (hereinafter referred to as "advance user"), and the trade name has been widely known, in case where the pre-user under the mutual use of the latter user's reputation or consumer credit is affected by the misunderstanding that the pre-user deceives consumers as if the source of the goods of the pre-user is the latter user, etc., the pre-user's credit is damaged, etc., it shall be deemed as damage caused by the so-called reverse confusion, and there is no room to acknowledge liability for damages to the pre-user. However, in light of the legislative intent of the Commercial Act and the Unfair Competition Prevention and Trade Secret Protection Act, which protect the trade name, it shall not be recognized that the pre-user's business type is different from the latter user, or it is not closely related to the latter user's business nature, content, business method, customer floor, etc.

According to the records, although it can be known that the name of the defendant company was widely known in the Republic of Korea as a mark indicating its business, it cannot be found that the defendant company, which has larger business size than the plaintiff company, used the trade name identical to the name of the plaintiff company intentionally or by negligence as its trade name and caused general consumers to be mistaken for the defendant company's reputation, thereby impairing the credibility of the plaintiff company. Rather, the plaintiff company and the defendant company are different from each other's supplied goods and services, and there is a difference in business size and business method, and there is a difference in the consumer's level, and it is difficult for general consumers to think that the two are related to each other. Thus, it cannot be deemed that the use of the name of the defendant company, which is the latter employer, damaged the credit of the plaintiff company, which is the preferred user.

In the same purport, the court below is justified in rejecting the plaintiff company's assertion as to damage caused by reverse confusion, and there is no error in the misapprehension of legal principles as to misconception of facts against the rules of evidence or reverse confusion, as otherwise alleged in the ground of appeal.

In addition, the existence of a harmful act by intention or negligence and the burden of proof of damages caused by such act shall be deemed to be the claimant, and the decision of the court below is justified in imposing the burden of proof on the plaintiff company as to the claim for damages caused by reverse confusion of this case, and there is no error of law that has passed the burden of proof on the tort as alleged in the ground of appeal.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jin-hun (Presiding Justice)