Dalcom Loans Co., Ltd. (Law Firm Squa et al., Counsel for the plaintiff-appellant)

The Commissioner of the Korean Intellectual Property Office

October 22, 2015

1. The decision made by the Intellectual Property Tribunal on March 31, 2015 (No. 2014 won4842) is revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Basic facts

A. The pending service mark

(1) Date/application number of the application: November 29, 2013

2) Composition:

(c) Designated service business: Credit business classified by service business of Class 36.

4) Applicant: The plaintiff

B. Grounds for the trial decision

1) On July 3, 2014, the Korean Intellectual Property Office examiner rendered a decision to refuse the registration of the pending service mark on the ground that “The pending service mark is indicated in a common way the efficacy, use, etc. of the service business in relation to the designated service business, and it cannot be identified as a service mark indicating a service business related to a person’s business, and thus, it cannot be registered as it falls under Article 6(1)3 and 7 of the Trademark Act.”

2) The Plaintiff filed a petition with the Intellectual Property Tribunal for a trial seeking revocation of the foregoing decision of refusal. After the Intellectual Property Tribunal deliberated on the above case of adjudication with 2014 won4842, on March 31, 2015, the instant decision of refusal, which rejected the registration of the applied trademark, based on the following reasons, was deemed lawful and dismissed.

A) Whether the pending service mark falls under Article 6(1)3 and 7 of the Trademark Act

The pending service mark of this case is difficult to recognize the distinctiveness of the mark because it indicates the service business that promptly lends money when using the service business "credit business", which is a designated service business, with the sense of the right of the lending of money, and it is difficult to recognize the distinctiveness of the mark. In addition, the pending service mark of this case is not appropriate for the public interest in terms of the exclusive use of the service mark as a whole. Since it is difficult for consumers to recognize the special distinction as a whole, the pending service mark of this case falls under the provision of Article 6 (1) 7 of the Trademark Act. Thus, the pending service mark of this case falls under the provision of Article 6 (1) 7 of the Trademark Act.

B) Whether the pending service mark acquired distinctiveness by use

The submitted evidentiary materials alone are not sufficient to recognize that the pending service mark was remarkably perceived by domestic consumers as the service mark indicating the Plaintiff’s service business prior to the date of the trial decision. Thus, the pending service mark cannot be deemed to have acquired distinctiveness by the use under Article 6(2) of the Trademark Act.

[Ground of recognition] The fact that there has been no dispute, each entry and video of Gap's evidence Nos. 1 through 4, and the purport of whole pleading

2. The parties' assertion

A. Summary of the plaintiff's assertion

1) Article 6(1)3 and 7 of the former Trademark Act

The pending service mark of this case merely indicates or emphasizes the quality, etc. of the designated service business, but it is difficult to view that it should be reduced directly by indicating the common quality, etc. of the designated service business. In addition, it is difficult to deem the pending service mark inappropriate to allow specific persons to monopoly the designated service mark for public interest.

Therefore, the pending service mark does not fall under Article 6(1)3 and 7 of the former Trademark Act.

2) Article 6(2) of the former Trademark Act

Even if the pending service mark falls under Article 6 (1) 3 and 6 of the former Trademark Act, the pending service mark of this case is deemed to have been remarkably perceived by domestic consumers as a mark indicating the source of credit business, which is a designated service business.

3) Illegality of the trial decision

Therefore, with respect to the pending service mark which is the designated service business, the registration of this case should be allowed under Article 6(2) of the former Trademark Act, but the different conclusion is unlawful.

B. Summary of the defendant's assertion

1) Article 6(1)3 and 7 of the former Trademark Act

Since the pending service mark of this case is directly used for “credit business”, which is a designated service business, it means “ prompt lending of money or immediately lending of money, etc.,” it constitutes a technical mark consisting solely of a mark indicating the quality, efficacy, etc. of service business in a common way and constitutes Article 6(1)3 of the former Trademark Act.

In addition, it is difficult to find out who has no distinctiveness to indicate whose business the pending service mark pertains to the absence of distinctiveness, and it is inappropriate to grant a specific person exclusive right to the service mark for public interest. Thus, Article 6(1)7 of the former Trademark Act is applicable.

2) Article 6(2) of the former Trademark Act

The pending service mark did not reach the extent of being widely recognized as a mark indicating the source of credit business, which is a designated service business, to domestic consumers.

3) Lawful of the trial decision

Therefore, the instant pending service mark, the designated service business of which is the designated service business, is not allowed to be registered. Therefore, the instant trial decision that concluded the same is legitimate.

3. Whether the pending service mark falls under Article 6(1)3 and 7 of the former Trademark Act

A. Legal principles necessary for judgment

1) Article 6(1)3 of the former Trademark Act

Article 6(1)3 of the former Trademark Act prohibits a trademark from being registered “a trademark consisting solely of a mark indicating the quality, efficacy, use, etc. of goods in a common way” means a request from the public interest that any person needs to use the trademark as it is necessary for the distribution process of goods and that if such trademark is permitted to use it exclusively, it is difficult to distinguish it from others’ goods of the same kind. Therefore, whether a trademark falls under this provision shall be determined objectively by taking into account the concept of the trademark, the relationship with the designated goods, and the circumstances of the transaction society (see, e.g., Supreme Court Decisions 2002Hu140, Aug. 16, 2004; 201Hu33, Apr. 28, 2011). Such a legal principle applies likewise to service marks under Article 2(3) of the former Trademark Act.

2) Article 6(1)7 of the former Trademark Act

Article 6(1) of the former Trademark Act provides, “A trademark, other than those referred to in subparagraphs 1 through 6, which does not enable consumers to recognize whose goods it indicates in connection with a person’s business.” This means that even if a trademark does not fall under any of subparagraphs 1 through 6 of the same Article, the source between the goods and the goods of another person cannot be registered. Whether a trademark without distinctiveness is a trademark shall be determined objectively by taking into account the concept bearing the trademark, relationship with the designated service business, the circumstances of the transaction society, etc. However, if it is difficult to recognize distinctiveness of the goods of another person under the social norms or it is deemed inappropriate for public interest to monopoly the trademark (see, e.g., Supreme Court Decisions 2010Hu3226, Mar. 10, 2011; 201Hu2951, Dec. 27, 2012).

B. Specific determination

The phrase “shortbling” is written in advance with the meaning of “from the place to the place immediately” (Evidence 5). Therefore, if the pending service mark is used for the credit business that is a designated service business, it appears that the meaning of “loan immediately made in the place” and “loan promptly made in the place.”

On the other hand, considering that credit business which is the designated service business of the pending service mark of this case requires considerable time for the investigation and evaluation of credit conditions, security, etc. for the purpose of loans, the swiftness of the service for prompt loans has a very important meaning in the quality of the service.

Therefore, if the pending service mark is used for credit business, which is a designated service business, it constitutes a mark directly indicating the excellence of the quality or efficacy of the designated service business. Thus, it constitutes Article 6 (1) 3 of the former Trademark Act. In addition, as long as the pending service mark constitutes a mark directly indicating the quality or efficacy of the designated service business, it is difficult to recognize the distinctiveness of other goods by social norms as long as it constitutes a mark indicating the excellence of the quality or efficacy of the designated service business. Thus, it constitutes Article 6 (1) 7 of the former Trademark Act

4. Whether the pending service mark constitutes Article 6(2) of the former Trademark Act

A. Legal principles necessary for judgment

Article 6(2) of the former Trademark Act provides that trademark registration may be granted, notwithstanding the provisions of Article 6(1)3 through 6, where consumers are recognized as a trademark indicating whose goods the trademark has been used before an application for trademark registration is filed, since the trademark has no distinctive character and thus it is inappropriate to allow a specific person to use it independently, its standard should be strictly interpreted and applied (see Supreme Court en banc Decision 92Hu2274 delivered on May 24, 1994). However, considering the use period, frequency and continuity of use of the trademark, the production, sale and market share of the goods bearing the trademark, methods, frequency and amount of advertisement and publicity, quality of goods, reputation of the trademark user, reputation and credit of the trademark user, degree and attitude of concurrent use of the trademark, etc., if the trademark becomes recognizable to the majority of consumers as indicating goods using the trademark for a long period of time, the distinctiveness of the trademark can not be recognized as being acquired through the use of the trademark itself unless it is recognized as 208 after its use.

On the other hand, the base point of time for determining whether a trademark or service mark applied for satisfies the requirements for distinctiveness under each subparagraph of Article 6(1) of the former Trademark Act is, in principle, the time of registration decision or decision of refusal, and where the registration is determined by a trial of dissatisfaction against the decision of refusal, the time of such decision (see Supreme Court Decision 2011Hu142, Apr. 13, 201, etc.).

B. Specific determination

1) Facts of recognition

The following facts are not disputed between the parties, or may be acknowledged by adding up the whole purport of pleadings to the statements and videos set forth in Gap evidence Nos. 10, 12 through 18, 20, 22 through 26, 36 through 41, 49, 53 and 55, and Eul evidence No. 5 (including each number):

A) Status of the Plaintiff

(1) The Plaintiff was established on October 2002 with the purpose of the articles of incorporation for the purpose of “consumer financial business” and engaged in credit business.

(2) The Plaintiff was assessed as the third company in terms of the size of assets and loan balance, etc. for several years around the time of the instant trial decision.

B) Plaintiff’s business method and use of the pending service mark

(1) The Plaintiff was engaged in the business of lending loans to customers from one’s own marketing (hereinafter “direct lending method”) and the business of lending loans to customers via a brokerage company. However, since 2011, the Plaintiff used the mark “short-term lending” in relation to the business of lending loans.

(2) A consumer who wants to borrow a loan according to a direct loan method may file an application for a loan by putting a telephone on “(tel number omitted)”, or by putting a part on the Plaintiff’s website by accessing the Plaintiff’s website.

C)TV advertising;

(1) From 2011, the Plaintiff aired a broadcast advertisement on the direct loan method through cable TV, DMB, etc. The part of the broadcast advertisement containing the instant pending service mark in the broadcast advertisement screen is as follows (hereinafter “actual use mark 1”).

Do Governor’s “,” “,” “,” “,” and “,”

Do Governor’s “,” “,” “,” and “,”

“.” and “...”

Do Governor’s “,” “,” “,”

Do Governor “”

(2) From 2011 to 2014, the Plaintiff’s advertising frequency and advertising costs as indicated in the foregoing (1) are as listed below (Article A36, 37 No. 37 “Non Korea”).

6,000,00 69,027,525,00 61,9,000 61,9,000 61,9,00 625,00 625,00 625,00 63,00 201, 2014 total 108,577,462 118,183,19,275 429,497 advertising expenses 48,286,70,70,000 234,527,666,00

(d) newspaper advertisements and keyboard advertisements;

(1) From 2011 to 2014, the Plaintiff advertised the method of direct loan via newspapers and magazines over about 20 times. The part of the advertising paper containing the instant pending service mark is either identical with or below the mark in actual use 1 (hereinafter referred to as “the mark in actual use 2”).

Do Governor’s “,” “,”

(2) From 2011, the Plaintiff advertised brand search advertisements through portal site servers, and following:

E) Loans related to the pending service mark

From 2011 to 2014, the amount of loans extended by the Plaintiff according to the direct loan method in the name of "short-term loan" is as follows:

The number of loans extended in 2014,454,454 34,437,44146,4146,521 152,853 loans extended in 2012,853 71,703,500,500,997,800,000 83,149,100,100 162,940,800,8000,387,791,200,000

F) Relevant newspaper articles

The articles introducing the Plaintiff’s “short-gambling business” were published on August 15, 2013 in the Korean Financial Newspapers on August 20, 2012, and the article introducing “tele-gambling loan” was published respectively in the sports tendency on August 15, 2013.

G) User investigations

(1) On December 2013, the Plaintiff: (a) requested a specialized company to conduct a survey on brand inspection to expand new Biz; (b) conducted a survey on brand inspection; (c) 70.4% of the response parties with experience in using both credit business and savings bank; (d) 13.8% of the response parties with experience in using only the credit business; and (e) 53.3% of the response parties with experience in using only savings bank; and (e) 240 response parties with experience in using savings bank, 53.3% of the response parties with experience in using only the savings bank, respectively.

(2) In addition, around June 2015, the Plaintiff requested a specialized company to conduct an investigation period as “from May 1, 2015 to May 18, 2015” and conducted a survey for establishing a well-dying Communications Strategy,” and 71% of the consumer financial users was investigated as being aware of the instant pending service mark.

2) Whether distinguishability has been acquired

In light of the above facts, the service period of the pending service mark of this case, the size of loans by direct lending, the frequency and period of advertisement through newspapers and broadcasting (commercial broadcast is about four years averages. 290 times a day) related to the pending service mark, and the Plaintiff appears to have been used exclusively by the Plaintiff for several years from the transactional world related to the credit business until the time of the decision of this case (the Defendant asserted that companies other than the Plaintiff used the “short-term loan” (such as evidence No. 4-3, etc.), but the company using the “short-term loan” seems to have started to use the pending service mark after the Plaintiff used the pending service mark of this case for three to four years (see evidence No. 56-1, No. 57-1, No. 57-2). From 2011 to the time of the decision of this case, the Plaintiff used the service mark of this case as the designated service mark of this case to consumers in view of the mark of this case and its social norms.

C. Sub-committee

Therefore, the pending service mark falls under Article 6 (2) of the former Trademark Act and its registration should not be refused.

4. Conclusion

If so, the trial decision of this case different conclusion is unlawful, so the plaintiff's claim of this case seeking its revocation is justified and it is so decided as per Disposition.

Judges Han-tae (Presiding Judge)

1) As to the instant application, the Act prior to the amendment by Act No. 12751, Jun. 11, 2014; thus, the said Act applies to the instant application. As such, the said Act applies under the former Trademark Act.