[1] The meaning of "inviting confusion with other person's business facilities or activities" under Article 2 subparagraph 1 (b) of the Unfair Competition Prevention and Trade Secret Protection Act and the criteria for its determination

[2] The case holding that it is difficult to view that the local government's performance and display of cultural arts works using the business mark containing the phrase "" is likely to cause confusion with the business facilities and activities of the Seoul Arts Center, a public corporation

[1] Article 2 subparagraph 1 (b) of the Unfair Competition Prevention and Trade Secret Protection Act provides that “The confusion with other person’s business facilities or activities shall be caused” includes not only cases where the business mark itself is misleading to be identical, but also cases where ordinary consumers or traders believe that the use of a mark identical or similar to the other person’s business mark widely known in the Republic of Korea is closely related to capital, organization, etc. between the subject of the pertinent business mark and users of a mark. Whether the act of causing confusion with the other person’s business mark constitutes an act of causing confusion with the other person’s business mark should be determined by comprehensively taking into account the existence of a competitive and competitive relationship due to the recognition of the business mark, degree of distinctive character, degree of similarity of marks, business circumstances, duplication of customer story, etc.

[2] Where a local government performed an act of public performance, display, etc. of cultural arts works using a business mark containing the phrase "", the case holding that it is difficult to deem that such business mark may cause confusion with the business facilities and activities of the Seoul Arts Center, a public corporation, in light of the circumstances that the business mark is ordinarily understood as the center of cultural arts used by residents in the local government

[1] Article 2 subparagraph 1 (b) of the Unfair Competition Prevention and Trade Secret Protection Act / [2] Article 2 subparagraph 1 (b) of the Unfair Competition Prevention and Trade Secret Protection Act

[1] Supreme Court Decision 2006Do8459 decided Apr. 27, 2007 (Gong2007Sang, 831)

The Arts Complex (Attorney Go Chang-deok, Counsel for the defendant-appellant)

Cheongju-si and two others (Law Firm Central LLC et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2005Na35938 delivered on December 12, 2006

The judgment below is reversed and the case is remanded to Seoul High Court.

The defendants' grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed by Defendant Cheongju-si and Defendant Daejeon-si).

Article 2 subparag. 1 (b) of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Competition Prevention and Trade Secret Protection Act”) includes not only cases where a business mark itself misleads a person as identical with another person’s business mark, but also cases where a general consumer or a trader misleads a person to believe that there is a close relationship with the subject of the pertinent business mark by using a mark identical or similar to another person’s business mark widely known in the Republic of Korea. Whether an act causes confusion with another person’s business mark constitutes an act of causing confusion with another person’s business mark shall be determined by comprehensively taking into account the existence of a competitive and competitive relationship due to well-knownness of business mark, degree of distinctiveness, degree of similarity of marks, status of business, duplication of customer stories, etc. (see Supreme Court Decision 2006Do8459, Apr. 27, 2007).

According to the records, the defendants used a business mark containing the same phrase as the mark "" used by the plaintiff (hereinafter "the mark of this case") for public interest and non-profit purposes through the public performance, exhibition, etc. of cultural and art works. The plaintiff and the defendants were actively recommended by the relevant local residents in the process of selecting such business marks. "Seoul Arts Center" itself constitutes a technical mark that indicates the nature, purpose, etc. of cultural and art works. The defendants' names are added to the business marks, and the business marks are located in different facilities where the plaintiff and the defendants are engaged in their business activities, and it is difficult to see that the plaintiff and the defendants used the facilities, and it is hard to see that the main purpose of this case is to make it possible for the plaintiff to actively participate in cultural and art activities as well as to have a position to encourage, protect and promote cultural and art activities of the public as a public corporation and local government (the plaintiff also puts a regional name on the English sign). It is also difficult for the plaintiff to actively participate in cultural and art activities of Seoul to the purport of this case.

Examining these circumstances in light of the legal principles as seen earlier, the business mark used by the Defendants is ordinarily understood as the center of culture and arts used by the residents in each local government. Even if the Defendants used the business mark containing the phrase “Seoul Arts Center,” it is difficult to see that general consumers or traders are the same as the Plaintiff’s business located in Seoul, or that there is a business, organization, finance, or contractual relationship between the business facilities or activities.

Nevertheless, the court below determined that the Defendants’ act of performing and exhibiting cultural arts works using a business mark containing the phrase “Seoul Arts Center” constitutes an unfair competition act under Article 2 subparag. 1 (b) of the Unfair Competition Prevention Act on the premise that such act may cause confusion with the Plaintiff’s business facilities and activities. The court below erred by misapprehending the legal principles on the prohibition of infringement against the business mark used by the Defendants, the claim for prevention, and the claim for damages arising therefrom, which affected the conclusion of the judgment. The Defendants’ ground of appeal pointing this out is with merit.

Therefore, without examining the remaining grounds of appeal by the Defendants, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)