Seoul High Court Decision 201Na14487 decided May 1, 201

U.S.P. Co., Ltd. (Law Firm Jungwon, Attorney Gangnam-gu, Counsel for the plaintiff-appellant)

January 11, 2013

Busan District Court Decision 2008Gahap1164 Decided September 15, 201

1. The plaintiff's appeal and the defendant's appeal are all dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

With respect to the Plaintiff KRW 4,275,189,240 and KRW 5,00,000 out of the above money, the Defendant shall pay to the Plaintiff the amount calculated by 20% per annum from the day following the delivery date of a duplicate of the complaint of this case, to KRW 500,000,000, and to KRW 3,275,189,240 from the day following the delivery date of a duplicate of the claim of this case and the application for modification of the cause of the claim of this case as of November 24, 2008, and to KRW 3,275,189,240 per annum from the day of delivery of a duplicate of the claim of this case as of January 20,

2. Purport of appeal

A. The plaintiff

The part against the plaintiff in the judgment of the court of first instance shall be revoked. The defendant shall pay to the plaintiff KRW 3,853,801,372 of the above money and KRW 421,387,868 annually from May 17, 2008 to September 15, 201, KRW 15%, 78,612,132 of the above money, to the plaintiff; for KRW 500,000,00, the delivery date of the copy of the complaint of this case; for KRW 3,275,189,240 of the above money, the payment shall be made at each rate of 20% per annum from the following day of delivery of the copy of the claim of this case as of November 24, 2008; for KRW 3,275,189,240 of the above money; and for KRW 3,275,189,240 of the above money, each of the two copies shall be paid.

B. Defendant

The part against the defendant in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed.

1. Basic facts

The reasoning of the court's reasoning concerning this case is as follows: (a) the first to the second to the second to the second to the first to the judgment of the court of first instance; (b) except that the defendant has manufactured and sold a product related to metal windows, such as Aluminium, at Changwon-si, which is a product related to the metal windows, such as Aluminium, and has been manufactured by marking " male aluminium of the stock company," the trade name of the company prior to the change since before the change in 1998, as "(main)" in the corresponding part of the reasoning of the judgment of the court of first to the effect that it is identical to that of the corresponding part of the judgment

2. Judgment on the plaintiff's claim

A. The plaintiff's assertion

1) The Plaintiff did not use a trademark identical or similar to another person’s registered trademark on goods identical or similar to the designated goods. However, the Plaintiff manufactured and sold goods bearing the Defendant’s trademark similar to the registered Plaintiff’s trademark or the Defendant’s trade name, thereby infringing the Plaintiff’s trademark right.

2) Therefore, the Defendant is liable to pay the following money to the Plaintiff for damages caused by tort or unjust enrichment.

A) First, pursuant to Article 67(1) of the Trademark Act, the Defendant is liable to pay the amount calculated by deducting the amount calculated by the market share from the amount calculated by multiplying the transfer quantity of the goods that the Plaintiff could have produced by the profit of the Plaintiff’s product by the profit of the Plaintiff’s product and the ordinary user fee corresponding to the deduction rate within the scope of the amount calculated by multiplying the transfer quantity of the goods that the Defendant infringed the Plaintiff’s trademark by the profit of the Plaintiff’s product. Accordingly, the Plaintiff’s loss calculated accordingly falls under KRW 11,920,584,037, even if the Defendant’s infringement period is deemed from 2003 to 2007, the Defendant’s infringement period is deemed to fall under KRW 11,920,584,037. Even if Article 67(1) of the Trademark Act is not applicable in relation to the calculation of damages, the Defendant is liable to compensate the Plaintiff for the profit gained by the Defendant’s infringement period from 1998 to 2007.

B) Even if Article 67(1) and (2) of the Trademark Act cannot be applied to the damages suffered by the Plaintiff, the Defendant is liable to pay the Plaintiff KRW 1,973,00,000, which is equivalent to the ordinary usage fee of the Plaintiff’s trademark, from 1998 to 2007, pursuant to Article 67(3) of the Trademark Act.

B. Determination

1) Whether the defendant's liability arises

A) Whether the Defendant violated the Plaintiff’s trademark

(1) Determination as to the part on which the defendant's trade name is indicated in the product (transfer of the defendant's trademark registration)

(A) Whether there was Defendant’s use of the trademark that infringed the Plaintiff’s trademark

In order to recognize infringement of trademark rights under Article 66(1)1 of the Trademark Act, trademark rights infringement should be premised on the use of trademark rights. However, pursuant to the main sentence of Article 51(1)1 of the Trademark Act, a trademark indicating one’s trade name in a common way shall not have the effect of trademark rights unless it is used for the purpose of unfair competition after it is registered for the establishment of trademark rights. Here, “the indication of trade name in a common way” means not only the display of trade name without having a special distinctive character by displaying in a special form, such as a unique letter, color, or painting, or an instrumentative letter, but also on the premise that ordinary consumers report the trademark name and indicate that it is a trade name. Therefore, in addition to whether the mark itself indicates that it has a special distinctive character, the determination of whether it constitutes a case of expressing one’s trade name in a common way in terms of trade norms should be made by comprehensively considering the actual quantity of the mark used, such as its location, arrangement, size, connection with other phrases, and shapes used (see, e.g., Supreme Court Decision 20075Da575.

In light of the above facts, the defendant's trade name was indicated in metal products such as aluminium since before 1998, as the name of the defendant was similar to that of the plaintiff's trademark and the defendant's trade name, and the products produced and sold by the plaintiff and the defendant were identical or similar. However, according to the video of evidence No. 25, the defendant's trade name is recognized to be indicated in the name of the defendant's trade name as "(main) male aluminium" under the part produced by the defendant's production under the above facts. The above mark is simply composed of Korean only, and it is hard to view that the defendant displayed the company's trade name as a special pattern because it is not enough for the defendant to attract general attention," and it is hard to view that the defendant's trade name is not widely known to the defendant's trade name as the defendant's trade name "(i.e., the well-known trademark of the defendant's trade name is not widely known to the plaintiff's general consumers, but its abbreviation is not widely known to the defendant's use of the defendant's trademark's trade name.

이에 대하여 원고는, 피고는 (주)남성알미늄을 녹색으로 표기하였을 뿐만 아니라 피고상표의 등록 이전부터 상호 앞에 “NAC"라는 영문약자를 표기하고 그 중간에 가로로 ”―◆“표시를 삽입하여 도안화된 문자를 표시하여 특별한 식별력을 갖도록 였다는 취지로 주장하나, 피고의 상호를 위와 같이 녹색으로 표기하였다는 사정만으로는 그 표기가 특별한 식별력을 갖추었다고 보기 어렵고, 갑 제44, 45증의 각 1, 2, 제51, 53, 55호증의 각 기재만으로는 피고가 피고상표의 등록 이전부터 피고가 생산하는 제품에 위와 같이 도안화된 문자를 표시하여 사용함으로써 원고상표를 침해하는 상표를 사용하였다는 사실을 인정하기에 부족하며, 달리 이를 인정할 증거가 없다.

(B) Whether the defendant's trade name was used for the purpose of unfair competition

The plaintiff alleged to the effect that the use of the trade name as above constitutes an unfair competition since it is intended to cause confusion with the plaintiff's goods by using the same as the plaintiff's trademark widely known domestically. However, according to the evidence Nos. 1, 2, 7, and 8, in the case of the defendant, the defendant was established on July 20, 197 by a male aluminium industry, and converted the defendant into a corporation with male aluminium on December 17, 1985. In the case of the plaintiff, the plaintiff was established on July 20, 1947 by a male ray Industry Co., Ltd., Ltd., which is the telegraph of the plaintiff on January 4, 197, and changed the trade name into a corporation with the intention of causing confusion with the plaintiff's goods. However, according to the evidence of the plaintiff's establishment and change of the company's trade name as of February 28, 199, it is not sufficient to recognize that the defendant's use of the trademark's products constitutes an unfair competition No. 297 through evidence No. 2.

(C) Therefore, since the Defendant’s production of the product by indicating the Defendant’s trade name before the registration of the Defendant’s trademark does not constitute an act infringing the Plaintiff’s trademark, which is the registered trademark, the Plaintiff’s claim for this part on the premise that the Defendant’s infringement on the Plaintiff’

(2) Determination as to the part indicated in Defendant’s trademark products (after Defendant’s trademark registration)

As seen earlier, the name of the Plaintiff’s trademark and its designated goods are similar to those of the Defendant’s trademark. Thus, the Defendant’s act of manufacturing and selling goods with the Defendant’s trademark similar to the Plaintiff’s trademark, a well-known trademark, constitutes an act of infringing the Plaintiff’s trademark, which is the registered trademark.

On the other hand, the defendant argues that the possibility of confusion in a claim for prohibition due to trademark right infringement is evaluated as conceptual and abstractly, while the possibility of confusion in the claim for compensation for damages due to trademark right infringement is assessed in a concrete and realistic manner, so it is difficult to recognize the defendant's liability for damages in this case where the general consumers' goods different from the market share and the regional main market are unlikely to confuse with the goods of the plaintiff and the defendant. However, the issue whether specific and realistic confusion was made to the general consumers is only about the scope of damages, but it does not change the criteria for determining the possibility of mistake and confusion in the claim for prohibition due to trademark right infringement and the claim for damages. Thus, the defendant'

B) The defendant's intention or negligence

In order to claim damages (or return of unjust enrichment premised on a tort) based on a tort caused by infringement of trademark rights, the infringer must have intention or negligence (the elements for establishing a tort do not need to distinguish between intention and negligence, and there is only difference between intention and gross negligence, and the amount of damages can be reduced unless there is intention or gross negligence.

In light of the fact that the existence of a trademark right is published in the Trademark Gazette or the original register, etc. and that any person investigates the existence and content of the trademark right in common with due care, and that the infringement of the trademark right constitutes only an act done as a business, the defendant could have sufficiently known the details of the trademark right through the Trademark Gazette, etc., and at least, the defendant seems to have been negligent in the infringement of the trademark right (Article 68 of the Trademark Act applies only to the case where the trademark is used with the indication that it is a registered trademark, and in this case, there is no evidence to prove that the plaintiff used the trademark by marking that it is a registered trademark in the trademark itself in order to indicate that the trademark has been registered).

The defendant asserts to the effect that the defendant had no intention or negligence on the infringement of the plaintiff's trademark during the period from October 23, 2004 where the defendant registered the defendant's trademark to August 23, 2007, during the period from October 23, 2004, until August 23, 2007, that the trademark registration is legitimate through the examination of the Korean Intellectual Property Office, which is a reliable state agency.

However, in order for a person who infringed another person's trademark to be not negligent, there are circumstances that justify the fact that he/she was unaware of the existence of another person's trademark right, or that his/her technology does not have the effect of another person's trademark right. The fact that the plaintiff filed a registration invalidation trial on the defendant's trademark and issued a trial decision that invalidated the registration of the above trademark is the same as mentioned above. Accordingly, even if the defendant's trademark was registered, the trademark right is deemed not to have existed from the beginning. Thus, even if the defendant believed that he/she used the trademark as the above registered right, such fact alone does not constitute a circumstance that justify the fact that he/she believed that the effect of the plaintiff's trademark does not reach the defendant's trademark (see Supreme Court Decision 2007Da65245, Jan. 30, 2009). Therefore, the defendant's above argument is not reasonable (see Supreme Court Decision 2007Da652

C) Therefore, the Defendant is obligated to compensate the Plaintiff for the damages incurred by the Plaintiff due to the Plaintiff’s infringement of the Plaintiff’s trademark from October 23, 2004 to December 31, 2007, the registration date of the Defendant’s trademark.

2) Scope of damages

A) Whether Article 67(1) of the Trademark Act is applied

Where a trademark right holder claims compensation from a person who has intentionally or negligently infringed a trademark right for damages caused by the infringer's transfer of infringing goods, the amount of damages may be calculated by multiplying the quantity of the goods transferred by the trademark right holder multiplied by the profit per unit of the goods that the trademark right holder could have sold in the absence of the said infringement. In such cases, the amount of damages shall not exceed an amount calculated by multiplying the quantity of goods that the trademark right holder could have produced minus the number of goods actually sold by the number of goods that the trademark right holder could have produced by the profit per unit: Provided, That where the trademark right holder was unable to sell his/her goods for reasons other than infringement, a sum calculated according to the number of goods which he/she could not sell

The purport of the provision on the presumption of damages is to relieve the owner of a trademark right's liability to assert and prove the amount of damages in principle, taking into account the fact that it is not easy to prove the actual amount of damages, even in cases where the owner of a trademark right obtains the credit by investing capital and effort, and the infringer obtains unjust profits by free taking advantage of the credit of the owner of the trademark right, the infringer shall prove the quantity of his/her liability by asserting and raising the amount of profit per unit of the goods he/she could have sold in the absence of the infringement.

However, considering the following circumstances: (a) Nos. 1, 2, 7, 8, and 20 through 22, each of the Plaintiff’s products is deemed to have been recorded in aluminium-related products; (b) as a result of appraisal and supplementation of Nonparty 1’s appraiser; (c) the Defendant’s establishment of male aluminium industry on July 20, 1978; and (d) conversion of the Defendant’s products into a corporation with male aluminium-related products into the manufacturing process, which would have been difficult for consumers to use by way of the Defendant’s aluminium-related products to directly sell aluminium-related products; and (c) the Defendant’s final use of the products, which would have been entirely different from that of the Defendant’s representative director’s aluminium-related products; and (d) the Plaintiff’s new use of the products, which would have been widely known to the Plaintiff’s final use of aluminium-related products, such as the Plaintiff’s new use of aluminium-related products, is deemed to have been incorporated on July 20, 197, 197.

In such a case, the calculation of the amount of damages by applying the presumption provision of Article 67(1) of the Trademark Act formally is contrary to the principle of substantial fairness, on the grounds that the defendant failed to specify the amount according to the quantity that the defendant could not sell for reasons other than the pertinent infringement. Therefore, in this case, the calculation of the amount of damages by applying the presumption provision of Article 67(1) of

B) Whether Article 67(2) of the Trademark Act is applied

Where a trademark right holder claims compensation from a person who has infringed his/her trademark right for damages caused by the infringement, the profits gained by the infringer shall be presumed to be the amount of damages suffered by the infringer (Article 67(2) of the Trademark Act). In addition, Article 67(2) of the Trademark Act provides that the amount of damages suffered by the infringer by the infringement shall be presumed to be the amount of damages suffered by the infringer. In special circumstances exist where there is a benefit regardless of the use of the trademark infringed by the infringer's goods, service quality, technology, credit other than the design, sales policy, publicity, etc. (see Supreme Court Decision 2005Da7502, Mar. 27, 2008, etc.). In full view of the purport of each argument stated in Articles 6 and 14 above, the presumption of damages under Article 67(2) of the Trademark Act may not be applied to the defendant's net profit, since there is a special reason to recognize that the defendant's profits obtained regardless of the plaintiff's trademark infringement due to the quality, technology, sales policy, sales, etc.

C) Calculation of damages pursuant to Article 67(3) of the Trademark Act

Generally, it is common to calculate the fee by the method of multiplying the reasonable rate of fee calculated in consideration of the individual circumstances of transaction by the ordinary user fee in the industry, etc. in the absence of a contract for use of the trademark right, and by the selling price of the infringing product.

According to the result of the request for the supplementation and supplementation to Nonparty 1 of the first instance trial, the ordinary user fee of the Plaintiff’s trademark that the Plaintiff could have received from the Defendant from 2004 to 2007 is as follows (The result of the appraisal by Nonparty 2 of the first instance trial is calculated on the premise that the Defendant’s profit amount and the ordinary user fee are identical in accordance with the Profit Access Act, and it is not believed.)

Of 207 sales (a) 23,613,00,000 won in 2006, 24,36,000,000 won in 20,248,248,000,000 won in 25,179,000,000 won in the table contained in the main sentence (b)(b)(1) of 0.50.50 0.50 0.50.50 121,680,00 won in ordinary usage fees (a xb) 118,050,000 won in 206.151,240,000 won in 125,890,000 won in the table(b)

Note 1) Ordinary royalty rate (b)

3) Sub-decisions

As seen earlier, the Defendant is obligated to compensate the Plaintiff for damages arising from trademark infringement from October 23, 2004. Thus, barring any special circumstance, KRW 22,57,868, which is calculated for the Plaintiff to work on ordinary use fees in 2004 (i.e., KRW 118,050,000 x 70/366 days x less than KRW 421,387,868 in total from 205 to 2007 (= KRW 22,57,868 + KRW 121,680,00 + KRW 151,240,000 + KRW 125,890,000 per annum from the day following the delivery of a copy of the complaint of this case) and the Defendant’s obligation to pay damages for delay to the Plaintiff during the period from May 17, 2008 to 205.

3. Judgment on the defendant's defense

The reasoning for this Court’s explanation is that “3. Defendant’s defense” in the reasoning of the judgment of the court of first instance is identical to that of “the judgment of the court of first instance,” and this part is cited by Article 420 of the Civil

4. Conclusion

Therefore, the plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. The judgment of the court of first instance is just in this conclusion, and the plaintiff's appeal and the defendant's appeal are dismissed as they are without merit. It is so decided as per Disposition.

Judges Choi Jong-sik (Presiding Judge)

Note 1) Ordinary royalty rate = Corporate value 】 trademark contribution/ gross sales