Defendant 1 and 6

Defendants

Kim Sung-mun

Law Firm Barun, Attorney Oi-type

Seoul Central District Court Decision 2006 High Court Decision 3292 Decided February 13, 2008

All the judgment below is reversed.

Defendants are not guilty.

The summary of the judgment of innocence against Defendant 3 shall be announced publicly.

1. Summary of grounds for appeal;

A. The summary of the facts charged in this case is as follows:

(1) 피고인 1은 피고인 2 주식회사의 대표이사로서, 2003. 6. 1.경부터 2003. 12. 31.경까지 충북 음성군 소재 피고인 2 주식회사 공장에서 기히 제조한 국내에 널리 인식된 상표로 공소외 1 주식회사에서 특허청에 2002. 6. 7. 등록한 “LYPRINOL”과 유사한 상표인 “Lypnol”과 위 공소외 1 주식회사 상품용기 등에 표시된 조개문양을 그대로 표시한 홍합추출물을 주원료로 하는 건강보조식품 “Lypnol”을 온라인 약품 판매체인인 공소외 3 주식회사 등에 1,418개를 공급하여 판매하면서 피고인 2 주식회사의 홈페이지에 사실은 공소외 1 주식회사의 특허공법에 의해 생산되는 홍합오일에 대한 피고인 2 주식회사의 원료 독점수입권은 2001년 3월경 이미 상실되었으며 완제품은 공소외 2 주식회사에서, 원료는 공소외 4 주식회사에서 독점수입하고 있었음에도 피고인 2 주식회사가 위 홍합오일에 대한 독점수입권이 있고 독점수입된 원료를 사용하는 등 회사의 건강보조식품인 “Lypnol”이 남다른 효능이 있다는 취지의 글을 수차 게재하여 위 “Lypnol”이라는 상품의 품질에 대한 오인을 일으키는 선전을 하고, 위 공소외 1 주식회사 제품인 “LYPRINOL”이라는 상품과 “Lypnol”에 대한 혼동 및 동 제품을 ♥♥내에서 독점판매하는 공소외 2 주식회사에서 위 “Lypnol”을 제조하여 판매하는 것처럼 혼동을 일으키게 하는 부정경쟁행위를 하고,

(2) Defendant 2 Co., Ltd. has committed the same act as that of Defendant 1 with respect to the Defendant’s business.

(3) From April 2004 to December 2005, Defendant 3 decided to manufacture and sell products similar to “LYPINL” in the Defendant’s office located in Gwangjin-gu Seoul Special Metropolitan City, Seoul Special Metropolitan City (number number, lake omitted). The trademark is “LPINL”, and the trademark is used as “LPINL” under the name of “LYPINL”. The above “Lpeel” is a product manufactured by the stabilization method, which is the patent method of the non-indicted 1 corporation, and on its packaging, it is published that the above “Lpeel” is a product manufactured by the stabilization method, which is the patent number, etc. of the non-indicted 1 corporation, and the product was imported and sold to Defendant 5, etc. of the non-indicted 4 and caused confusion between Defendant 4 and the above non-indicted 2 “LPINL” and the above non-indicted 1 corporation’s products to mislead the quality of “LPYL” and sold them.

(4) As the representative director of Defendant 5 Co., Ltd., Defendant 4, at the Defendant’s office located in Seocho-gu Seoul Metropolitan Government Seocho-gu (number 2, lake omitted), in selling “Lipfel” supplied by Defendant 3 as above, Defendant 5 Co., Ltd., “Defendant 5,” “PTP packing PTPP PP packing PP packing PP PP PP packing PP packing machine,” and “Lipfel” was manufactured in the same company as “LYPRINL”, and sold products by means of such means as advertising the quality of “Lipel” and causing confusion between “LLPRRR” and “business activities of Nonindicted Co., Ltd.,” and “business activities of Nonindicted Co., Ltd.,” on the Internet newspapers, etc.

(5) Defendant 5 Co., Ltd. has committed the same act as that of Defendant 4, a director, with respect to the Defendant’s business.

(6) From December 2003 to December 2005, Defendant 6 imported and supplied health auxiliary food produced by simply putting red joints into Nonindicted Co. 5’s products at the Defendant’s office located in the Gyeonggi-gu Suwon-dong (PYINL 3 omitted) from the Defendant’s office, and then imported and supplied red joints with Nonindicted Co. 5’s products, and made it on the so-called “LYINL” as one produced by the stabilization method, which is the patent construction method of the said Nonindicted Co. 1’s patent, and advertised at the ○○○○, an online pharmacy shopping mall, and △△△△△△△△’s site, and published “LYPINL” as “the foregoing media reports and research papers on the efficacy, etc. of “LYPINL”, and imported them on the Defendant’s website and sold them, thereby causing confusion and confusion with the quality of the PYM 30 YYL’s products by using them, and selling them as it is.

(7) Defendant 7, at the same time and time as Nonindicted 6, the representative director of the corporation, posted a statement on the efficacy, etc. of “LYPINL” and various papers, etc. on the Defendant’s office located in Gangnam-gu, Seoul, Seoul, with the content of “LYPINL” and the content of “LPINL” on each website, and made it confused with “LYPINL” and “PINL” and “this confusion with Nonindicted 2” by advertising the quality of the above LYM and selling them by means of advertising misunderstanding the quality of the LYM and making them confused with the above products manufactured by the patent method.

Therefore, the court below found the Defendants guilty on the ground of the macro-written evidence.

B. Summary of grounds for appeal

(1) Defendants 1 and 2

Defendant 2 terminated the exclusive supply contract with Nonindicted Co. 1 on March 13, 2001. However, even after that termination, Defendant 2’s exclusive supply contract with Nonindicted Co. 1 was made by being supplied with the same ingredients as the previous in the non-exclusive state, and thus, it is no longer likely that this constitutes an unfair competition act. In light of the advertising content of Nonindicted Co. 2, it cannot be said that Defendant 2 had a well-known nature of “rithical play” around the time indicated in the instant facts charged.

(2) Defendant 3

“Lipfel” used by the Defendant is not likely to cause confusion because it is not identical to “LYPINL”, and it is more likely to cause confusion considering that it is the type of the bottled bottle, which is the form of LYPINL package, and Lipfel’s PTP package.

(3) Defendant 4 and 5 corporation

피고인은 2004년 3월 말부터 같은 해 4월 초까지 약 4~5일에 걸쳐 인터넷신문인 ■■■과 ○○○에 ‘리프리놀’을 원료명으로 착각하고 사용한 적이 있으나, ■■■의 담당기자로부터 리프리놀이 등록상표라는 연락을 받자마자 즉시 두 매체에서 이를 삭제하였고, 이후 리프리놀을 혼용하여 사용한 적이 없다.

(4) Defendant 6

The Defendant, following normal procedures, only supplied the Green Tracul, imported from Nonindicted Co. 5 to Defendant 7, and recognized the Green Bacul as a raw material name, not a product name, and did not seem to have been in place at the time indicated in the instant facts charged.

(5) Defendant 7 corporation

When the Defendant used the expression “Lyp” in the Internet shopping mall for about one week, but became aware of the fact that it was registered as a trademark, it was immediately deleted, and was aware of it as a raw material name rather than the name of the goods of the Lyp games, and it cannot be deemed that the Defendant had the knowledge of the Hyp on the date indicated in the facts charged.

2. Determination:

A. Article 2 subparagraph 1 (a) (only "a) of the former Unfair Competition Prevention and Trade Secret Protection Act (amended by Act No. 8767 of Dec. 21, 2007) provides that "the act of causing confusion with another person's business facilities or activities by using things identical or similar to another person's name, trade name, trademark, containers and packaging of goods widely known in the Republic of Korea, or any other mark indicating another person's goods, or by selling, distributing, importing, or exporting goods using such things," and subparagraph (b) (only "b) of the same Article provides that "the act of causing confusion with another person's business facilities or activities by using those identical or similar to the name, trade name, emblem, or other mark indicating another person's business, which is widely known in the Republic of Korea," and (f) (only "f) provides that "the act of causing confusion with another person's goods, or by advertising goods or advertising them with the quality, content, manufacturing method, use or quantity of goods, or by importing, distributing, or selling such goods."

B. In the instant case where the Defendants denied the instant facts charged from the investigative agency to the trial at the trial, Nonindicted 7 and Nonindicted 8’s respective statements and copies of other products photographs or contracts, newspapers, Internet homepage data, etc. as evidence that seem to correspond to the facts charged may be considered as evidence. However, each of the statements made by Nonindicted 7 and Nonindicted 8, which can be deemed as direct evidence, cannot be deemed as having probative value to the extent that there is no reasonable doubt in light of the following facts, to the extent that there is no doubt that the facts charged are true, and other related documents, etc. are difficult to be deemed as direct evidence proving the facts charged in the instant case.

C. The record reveals the following facts.

(1) Nonindicted Co. 1 is a company that manufactures and sells health functional foods (in the form of smoke caps, hereinafter “the instant product”) under the name of the product “Lypinol” (hereinafter “Lypinol”) after extracting air-resistant salt ingredients, etc. contained in Yu-Liped Muss (Green-Liped Muss, Perna Calulus). Nonindicted Co. 2 entered into an exclusive sales contract with Nonindicted Co. 1 on or around June 2001, and imported and sold the instant product from June 2001.

(2) On November 5, 1999, Defendant 2 concluded a domestic monopoly supply contract with Nonindicted Co. 1 on the finished product of “rithmn” and the raw material of “rithmn,” but failed to fulfill the contractual obligation to purchase the minimum quantity agreed upon by the sales of the above product. On March 13, 2001, upon cancelling the monopoly supply contract with Nonindicted Co. 1, 2001, Defendant 2 sent to Nonindicted Co. 1 a written confirmation to the effect that “Non-Indicted. 1 did not raise any objection to selling the product domestically, Non-Indicted. 1 is free to choose a domestic seller, and Defendant 2 is exempt from the minimum quantity purchase obligation.”

(3) 공소외 1 주식회사는 2001년 6월경 공소외 2 주식회사와 사이에 이 사건 제품에 대하여 새로운 국내 독점판매계약을 체결하였으며, ★★일보 2001. 7. 30.자에 공소외 2 주식회사가 공소외 1 주식회사와 ‘리프리놀’ 제품 국내 독점공급판매계약을 맺고 제품 시판에 들어갔다는 취지의 기사가 게재되었다.

(4) 이 사건 제품에 관하여 ① 2001. 6. 23.자 ☆☆일보에 “류머티즘성 관절염 예방·치료 건강보조식품 ‘리프리놀’ 시판”이라는 기사가 게재된 것을 비롯하여 2004. 7. 6.에 이르기까지 81건의 관련 기사가 ⊙⊙신문( ☆☆일보, ★★일보, ◎◎신문 등), 스포츠신문( ⊙⊙스포츠, 스포츠▷▷ 등), 업계신문( ▶▶신문, ◁◁◁◁, ■■■ 등)에 실렸고, ② 2001년 9월호 ‘ ◀◀◀’에 ‘리프리놀’ 제품 관련 기사가 게재된 것을 비롯하여 ◇◇◇, ◆◆◆ 등 잡지에 12여 회 관련 기사가 실렸으며, ③ ♡♡♡ 2002년 5월호(제45권 제5호)에 “슬관절 및 고관절의 퇴행성 관절염 환자에서 뉴질랜드산 초록입홍합 추출물(LYPRINOL®)의 유효성 및 안정성에 대한 고찰”이라는 논문이 발표되는 등 해외논문저널에 10여회, 국내학술지에 4회 정도 관련 연구가 게재되었다.

(5) From November 2003 to July 2004, Nonindicted Co. 2 paid a total of KRW 286,372,900 to the Korea Broadcasting Advertising Corporation as advertising expenses, and paid a large amount of advertising expenses under the pretext of SBS Drama production, cable TV advertising, website production, and the sponsoring expenses for various events since the latter part of 2003.

(6) 이 사건 제품은 ‘2002년 하반기 히트상품’(2002. 12. 13.자 ♥♥일보), ‘2003년 상반기 히트상품’(2003. 6. 30.자 ♥♥일보)에 각 선정되었고, 전국적으로 1,060개의 약국을 거래처로 하고 있으며, 그 외 ●●●, △△△, ○○○ 등 온라인 쇼핑몰, ◐◐백화점 등 주요 백화점, ◑◑홈쇼핑 등 TV 홈쇼핑을 통해 판매되고 있다. 이 사건 제품의 매출현황은 2001년 15,359통(단가 65,000원) 998,335,000원, 2002년 77,715통 5,051,475,000원, 2003년 146,390통 9,515,350,000원에 이른다.

(7) On the other hand, Defendant 2 Co., Ltd. manufactures by Nonindicted Co. 1 Co., Ltd., and supplies them to Nonindicted Co. 9 and Defendant 2 Co., Ltd. in Korea. In other words, Nonindicted Co. 9 has exclusive rights to complete import, and Defendant 2 Co., Ltd. has exclusive rights to raw materials imported. At present, Defendant 2 Co., Ltd. manufactures raw materials imported and manufactures them, and is contained in Chohyp. Product. Of its head office products, “Sypyp extractions (Liyp) have strong chyp action and are supplied to Defendant 2 Co., Ltd..., Ltd., which are distributed in the city.”

D. As to the grounds of appeal by Defendant 1 and 2 corporation

(1) Whether items (a) and (b) are violated

(A) First, according to the facts acknowledged as seen earlier, it is difficult to conclude that the product of this case constitutes a product or business mark widely known to the Republic of Korea around the date and time indicated in the facts charged, and that the product of this case was mainly advertised through various newspapers, magazines, thesiss, etc. and public waves and cable broadcasts, etc., and thus, it can be deemed that the “offside games” was known to the general public at the end of 2003. However, the following circumstances are as follows: (i) Defendant 2 had already imported and sold the “offside games” product from 199 to the Republic of Korea, but it was difficult to readily conclude that the Defendants had sold the product from 2001 to 2000 to 300 to 201 to 201 to 30 to 200 to 30 to 20 to 20 to 20 to 20 to 30 to 20 to 20 to 20 to 30 to 20 to 201 to .

(B) In addition, according to the facts acknowledged earlier, the instant “offline play” is merely a product’s mark, and it is difficult to view it as a “mark indicating that the Defendants’ act constitutes an unfair competition act under item (b). Moreover, there is no evidence that the Defendants’ act constitutes an unfair competition act under item (b).

(2) Whether item (f) is violated

According to the facts acknowledged earlier, Defendant 2 corporation indicated itself as if it were an importer of raw materials on its website and posted an explanation to the effect that it contains “franz” products. Defendant 2 corporation is recognized as having normally imported raw materials from Nonindicted Co. 1 after the termination of the exclusive sales contract on or around June 2001; ② Defendant 2 corporation’s customer answers to “I are supplied with low-end raw materials, but currently are supplied with direct import products as finished products,” and it is difficult for Defendant 2 corporation to clarify that it is an exclusive importer of the product’s “franz” product, and Defendant 2’s act of using “franz” as a red product, not a red product, and Defendant 2’s “franz” in this paper appears to have been aware of the characteristics of “franz” products as “Franz” under the “Franz” product’s trademark name and thus, Defendant 2 did not appear to have been aware of the nature of “franz” products as “Franz” under the 20-G mor.

In addition, Defendant 2, even if the exclusive sales contract between Defendant 2 and Nonindicted Co. 1 was terminated in Korea, had already been manufactured and sold functional health foods using the name of “offline play”, and Nonindicted Co. 1 was well aware of this. ② Even after the termination of the exclusive sales contract between Defendant 2 and Nonindicted Co. 1, Defendant 2, around August 7, 2001; and October 7, 2002; and August 22, 2003, Defendant 2 had imported “offline play” raw materials from Nonindicted Co. 1; ③ Notwithstanding the cancellation of the exclusive sales contract between Defendant 2 and Nonindicted Co. 2, the exclusive sales contract between Defendant 1 and Nonindicted Co. 2, the exclusive sales contract of this case could not be concluded to have continuously supplied the instant products to Defendant 2, as seen earlier, even if the exclusive sales contract was terminated, it could not be seen that Defendant 2 and the exclusive sales contract of this case had been terminated in advance.

E. As to the grounds of appeal by Defendant 3, 4, 5, 6, 7

(1) Whether items (a) and (b) are violated

(A) In order to constitute an unfair competition act as stipulated in item (a), the same and similar nature should be recognized between the signs widely recognized domestically and the subject signs. However, Defendant 3, 4, and 5’s “Lipfel” used by Defendant 6, and Defendant 7’s “Lipped Mus self” used by Defendant 6, and “Lipped Mus self” are different from the cover of the instant product, so it is difficult to view that each of the signs “prop” and “propus” are identical or similar to the mark of the instant product, and there is no other evidence to acknowledge this differently.

(B) In addition, as seen earlier, the term “franchising” is merely a mark of the instant product, and it is difficult to regard it as a “mark indicating the business status of Nonindicted Company 2.”

(2) Whether item (f) is violated

As seen earlier, ① press articles dealing with the “frithal play” and most of the papers use the word “frithal play” as referring not to the product itself but to red joint extraction ingredients. A considerable number of domestic consumers appear to have been aware of “frithal play” in the name of red joint extraction ingredients rather than the product name. The Defendants’ inclusion of “frithal play” appears to have had the intention to indicate the ingredients of the product as the extracted red products. ② Furthermore, Defendants 4, 5, 6, and 7 did not contain “frithal play” and “frithal machine” itself, but rather, it is difficult to view that the Defendants’ act of importing goods from online shopping mall together with the product name “frithalz” as the product name “frithalz” and “frithal food products” as the product name “frithal food products” and the product name “frithal food products” as the product name “frithal food products” in this case’s product name.

F. Sub-committee

Therefore, except the evidence rejected earlier, there is no evidence to acknowledge otherwise, and the facts charged in this case constitute a case where there is no evidence of crime, and all of the defendants should be acquitted under the latter part of Article 325 of the Criminal Procedure Act, but the court below erred by misapprehending the facts and thereby affecting the conclusion of the judgment. Thus, the defendants' assertion pointing this out has merit.

3. Conclusion

Therefore, since the defendants' appeal is well-grounded, the judgment of the court below shall be reversed in accordance with Article 364(6) of the Criminal Procedure Act, and the following judgment shall be rendered again after pleading.

The summary of the facts charged of this case is the same as that of paragraph (1) of Article 1, and as seen in subparagraph (d) and paragraph (e) of Article 2, the facts charged of this case constitutes a case where there is no proof of a crime, and thus, all defendants are acquitted under the latter part of Article

It is so decided as per Disposition for the above reasons.

Judges Noh Sung (Presiding Judge)