Hui Ba Hui (Law Firm Hau, Attorneys O Chang-ho et al., Counsel for the plaintiff-appellant-appellant)

Defendant 2 and 1

Defendant 1 Co., Ltd. (Law Firm Barun, Attorneys Choi Young-ro et al., Counsel for the defendant-appellant)

December 7, 2005

Seoul District Court Decision 99Gahap5861 delivered on September 22, 2000

1. Of the judgment of the court of first instance, the part against Defendant 2 and Defendant 3 Co., Ltd. corresponding to the amount ordered to be paid below shall be revoked.

The plaintiff shall pay 40 million won to the defendant 2 corporation, 50 million won to the defendant 3 corporation, and 50 million won to the above amount, 5% per annum from March 18, 2000 to December 29, 2005, and 20% per annum from the next day to the full payment date.

2. The judgment of the first instance court ordering Defendant 1 to pay 40 million won and 5% per annum from March 21, 2000 to December 29, 2005, and 20% per annum from the next day to the date of full payment from March 21, 2000 to the date of full payment, and the part against the above defendant ordering payment exceeding the amount equivalent to 20% per annum, shall be revoked, and the plaintiff's claim against the above revoked portion shall be dismissed.

3. The appeal by Defendant 2, Defendant 3 and the remaining appeal by the Plaintiff and Defendant 1 are dismissed, respectively.

4. Of the total litigation costs, the portion arising between the Plaintiff, Defendant 2, and Defendant 1, five minutes each, which occurred between the Plaintiff and Defendant 4, the remainder shall be the Plaintiff, the said Defendants, and the part arising between the Plaintiff and Defendant 3 shall be five minutes, and the remainder shall be borne by the Plaintiff and the same Defendant, respectively.

5. The portion of money paid to Defendant 2 Co., Ltd. and Defendant 3 Co., Ltd. among paragraph 1 can be provisionally executed.

1. Purport of claim

The Defendants shall not use by advertisement, publicity, or any other means a trademark containing a trademark using the same letters as indicated in the separate sheet No. 1 or a trademark containing such letters, or manufacture, sell, transfer, deliver, or exhibit for such purpose any goods as indicated in the separate sheet No. 2 with which the trademark is attached. As to the Plaintiff, Defendant 2 Co., Ltd., Defendant 1 Co., Ltd., Defendant 3 Co., Ltd., Defendant 3 Co., Ltd., and Defendant 3 Co., Ltd, 353,396,528 won, and each of the above money, the amount calculated by 25% per annum from the day following the service of the application for change of the purport of the instant claim and the cause

2. Purport of appeal

A. The plaintiff

In the judgment of the first instance court, the part against the plaintiff against the defendant 2 corporation and the defendant 3 corporation shall be revoked. The defendant 2 corporation shall pay to the plaintiff 150 million won, the defendant 353,396,528 won, and each of the above amounts to the defendant 3 corporation shall be paid 25% amount per annum from the day following the service of the application for modification of the purport of the claim of this case and the cause of the claim to the day of full payment.

B. The Defendants

In the judgment of the court of first instance, the part against the defendant 1 corporation, the part against the defendant 2 corporation, and the part against the defendant 3 corporation shall be revoked, and the plaintiff's claim corresponding to the above revocation part shall

1. Basic facts

A. Status of the plaintiff and the use status of the plaintiff's trademark

(1) On July 25, 1979, the Plaintiff, a corporation of the Republic of Italian Republic, which is engaged in the manufacture and sale of clothing established around July 25, 1979, registered the Plaintiff’s trademark indicated in the attached Table 3 with the Korean Intellectual Property Office (hereinafter collectively referred to as “Plaintiff’s trademark”) with the Korean Intellectual Property Office from July 1982 to 195.

(2) All of the Plaintiff’s trademarks 1 through 5 have obtained global reputation in the 1970s, and have been designed based on the name of Vietnamian Republic that died in 197, not the fashion designer, and was created in 1,988,235 in 1981, USD 2,374,581 in 1982, USD 3,027,561 in 193, and the name of Vietnamian was 3,027,561 in 197, while raising and maintaining the personal guidance of each country including the United States.

(3) Around January 1994, the Plaintiff granted the Plaintiff’s exclusive right to import and sell clothing and clothing from among the Plaintiff’s products, which had the Plaintiff’s trademark, via 190, 197, 190, 197, 131,782,415, 259, 638, 198, 197, 90, 196, 97, 97, 196, 196, 196, 90, 97, 196, 197, 196, 90, 197, 196, 196, 90, 197, 196, 90, 196, 196, 90, 196, 196, 196, 97, 196, 97, 196, 196, 196, 97, 96, 96, 16, 96, etc.

B. Status of the Defendants and the use of trademarks

(1) The ALFREDO VERE is a designer of the United States, and between 1998 and 1999, the Republic of Korea filed an application for registration of the trademarks listed in the attached Table 4 (hereinafter “Defendant trademarks”) with the Korean Intellectual Property Office (hereinafter “Defendant trademarks”).

(2) Around August 21, 1996, Nonparty 1 entered into a contract with ALFRED VISACE or V-GLDD DES DozD DozD DozDD DozD DozD DozD DozD DozD DozD DozD DozD DozD DozD DozD DozD DozD DozD DozD Dozss VDE with the Republic of Korea's exclusive license.

(3) On May 10, 197, Defendant U.S., using the English trade name (English trade name omitted) called “Defendant U.S.”), entered into a license agreement between Nonparty 1 and the above Defendant to use the Defendant’s trademark in the form as shown in the separate sheet No. 5 by the end of December 2000 (the above Defendant asserted that the above Defendant is not the above Defendant, but the non-party 2 or the non-party 3, who is the business entity separate from the above Defendant. However, examining the above license agreement (Evidence No. 48-6), it can be seen that the seal affixed thereto is the Defendant’s corporate seal. In light of this, it is difficult to accept the above recognition by only the descriptions and images of evidence No. 83-1 or 4, which are described in the above document No. 83, and the above Defendant’s assertion was attached to the Defendant’s trademark that was produced by the above Defendant from that time to April 27, 200).

(4) On September 11, 1997, Defendant Shyn C entered into a license agreement with Nonparty 1 on December 31, 200 to use the Defendant’s trademark in the same form as the Defendant’s trademark in the attached list No. 5, and around that time, from around March 18, 1999 to around March 18, 199, Defendant C&C attached the Defendant’s trademark on the long-term equipment, such as the visibility and earb produced by the Defendant.

(5) Meanwhile, around July 1998, the Defendant’s child industry was authorized by Nonparty 1 to use the Defendant’s trademark in the same form as the Defendant’s visual product in the attached list No. 5 and sold the Defendant’s visual product produced by the said Defendant from around that time to July 2000.

[Ground of Recognition] Facts without dispute, Gap evidence 1-1 through 10, Gap evidence 2-1, 2-3-1, 3-1, 48-6, 14, 50, 55, Gap evidence 11-1 through 4, Gap evidence 23, Gap evidence 38-2, 39-2, 7, Gap evidence 40-3, Gap evidence 41, Gap evidence 42-1, 42-1, 3, 42-4, 4-8, Gap evidence 4-4, Gap evidence 43-6, 11, Gap evidence 48-14, Gap evidence 50, Gap evidence 59-11, 61, 67, Gap evidence 17, 78-1, Gap evidence 57, Gap evidence 59-1, 67, Gap evidence 57, Gap evidence 7, Gap evidence 57-1, 7, Gap evidence 57-1, 78-1, evidence 7

2. The parties' assertion

A. The plaintiff's assertion

(1) The Plaintiff is a trademark holder with respect to the Plaintiff’s trademark.

(2) The Defendants are manufacturing and selling the Plaintiff’s trademark widely known in Korea and goods using each trademark listed in the separate sheet Nos. 4 and 5, which are identical or similar to the designated goods.

(3) The aforementioned Defendants’ act constitutes an act of infringement of the Plaintiff’s trademark right and also constitutes an unfair competition act under the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Competition Prevention Act”). The registration of the Defendant trademark is not intended to distinguish one’s goods from another’s goods, but intended to gain profits by using a trademark identical or similar to the Plaintiff’s trademark widely recognized in Korea, thereby causing confusion with the Plaintiff’s goods. Thus, the aforementioned Defendants’ act constitutes an unfair competition act regardless of trademark registration.

(4) Accordingly, the Plaintiff’s claim for prohibition of trademark infringement under the Trademark Act and the claim for prohibition of an unfair competition under the Unfair Competition Prevention Act and the claim for damages under the Unfair Competition Prevention Act are selective claims. The Plaintiff sought against the Defendants the prohibition of use of trademarks containing the same letters as shown in the separate sheet No. 1 and the prohibition of manufacture, sale, etc. of goods listed in the separate sheet No. 2 with the trademark, and also sought payment of damages for infringement of the Defendants’ trademark rights and unfair competition as part of the profits gained from each infringement as a compensation for damages for infringement of their trademark rights, and for Defendant 1 Co., Ltd. (hereinafter “Defendant 1”), KRW 150 million, and for Defendant 3 Co., Ltd. (hereinafter “Defendant 3”), KRW 353,396,528 (including KRW 100 million) and damages for delay.

B. The defendants' assertion

(1) Defendant 2 and 1 did not use the Defendant trademark, and Defendant 3 used the Defendant trademark, but suspended the use of the Defendant trademark at the stage of manufacturing prototypes. Moreover, the Plaintiff and the Defendant trademark cannot be deemed as identical or similar trademarks. Accordingly, the use of the Defendant trademark cannot be deemed as an infringement of the Plaintiff’s trademark right or unfair competition against the Plaintiff.

(2) Even if the Defendants used the Defendant’s trademark, the Defendants merely used the Defendants’ trademarks lawfully registered under the trademark use contract, and thus, did not constitute trademark infringement or unfair competition act, and there is justifiable reason to believe the validity of trademark rights against the Defendant’s trademarks, and thus, the Defendants’ intentional act or negligence cannot be acknowledged. Furthermore, even if the Defendants’ act constitutes trademark infringement or unfair competition act, there is no benefit gained by the Defendants.

3. Determination as to the defendants' unfair competitive act

I first examine the validity of the claim of this case based on the Unfair Competition Prevention Act among the selective causes of the plaintiff's selective claims.

A. Determination as to the well-knownness of the Plaintiff trademark and similarity with the Defendant trademark

(1) In light of the registration status of the Plaintiff’s trademark at home and abroad, the period of use of the Plaintiff’s trademark, the well-knownness of the Vietnamer, and the size of advertisement in the Plaintiff and the Plaintiff’s present trade, etc., which were revealed in the above facts of recognition, it is reasonable to deem that the Plaintiff’s trademark, at least 1 to 5, using the name of the Vietnamer as it is, was widely known in the Republic of Korea since June 1996, prior to the registration of the trademark right for the Defendant’s trademark.

(2) Furthermore, Plaintiff 1 or 5’s trademark is composed of letters “VSAE” or “GVSAE,” and is designed based on the name of Benzers, regardless of Italian fashion, and Defendant 5’s trademark is placed in the center part of black rectangular figure “V” at its upper part, and is placed in the bottom of the trademark “DESIGNDBE” or “ALAE” on the left-hand side, and is thus, in accordance with the name of the Plaintiff 5’s trademark “VE” or “VE” or “VE” or “VAE” written on the front side of the trademark and written on the front side of the trademark “VEE” or written on the copy of the trademark “IFREE” or written on the front side of the trademark so that each part of the Plaintiff 5’s trademark is written on the lower part of the attached list and written on the front side of the trademark “VEAE” or written on the front side of the trademark “VEEE” or written on the front body.

(3) Therefore, where each trademark listed in the separate sheet Nos. 4 and 5 is referred and conceptualally construed only as "beer", the trademark itself is also the same as the first or fifth Plaintiff trademark named as "beer", and each trademark listed in the separate sheet Nos. 4 and 5 is likely to cause misconceptions or confusions to ordinary consumers or traders by observing objectively, comprehensively, and systematically, each trademark listed in the separate sheet Nos. 4 and 5 is similar to the first or fifth Plaintiff trademark.

(4) However, Articles 6 through 9 of the Plaintiff’s trademark is an English trademark with only the combination trademark of letters and diagrams placed at the bottom or the English body’s English character “VERSACEE” located in the English body of the ancient body in the reverse-type model, and each above, the English trademark with the bottom “GINNNI VVVSCE” and the English body’s English body’s English name “GINNIVVSCE” located at the bottom. However, it is difficult for the English body of the above trademark to accurately recognize the iron, because the English body of the “GNNNIVVERE” is a small pen that is difficult to be identified in the Chinese body, while it is difficult to view that the trademark of each of the above trademarks is identical to the Plaintiff’s trademark “VVSUSS,” or the entire body of the Plaintiff at the same time, and thus, it is difficult to see that the trademark of each of the above trademarks is identical to the Plaintiff’s body of the Plaintiff or the entire body of the Plaintiff 6.

C. Determination as to the establishment of an unfair competitive act

(1) According to the above, the use of the defendant trademark, unless there are special circumstances, constitutes an unfair competition act under Article 2 subparagraph 1(a) of the Unfair Competition Prevention Act, which causes confusion with the plaintiff's goods by using the same or similar articles as or similar to the 1 or 5 plaintiff trademark widely known domestically.

(2) As to this, the Defendants asserted to the effect that the Defendants’ intent or negligence cannot be acknowledged on the grounds that the trademark infringement or unfair competition act did not constitute trademark infringement or unfair competition act, and there is justifiable reason to believe the validity of trademark rights against the Defendant’s trademark, and thus, it is difficult to see that the Defendants’ intent or negligence cannot be acknowledged.

Article 15 of the Unfair Competition Prevention Act provides that the provisions of other Acts shall not apply to cases where there are provisions different from the Unfair Competition Prevention Act, such as the Trademark Act, and the provisions of other Acts shall apply without the purpose of distinguishing one's own goods from another's goods. However, if a trademark is acquired in the form of a trademark for the purpose of making profits by using a trademark identical or similar to another's trademark widely recognized in Korea, which does not aim at distinguishing one's goods from another's goods, the purpose of the application for trademark registration itself is unfair competition. Thus, even if the trademark is recognized as an external form of exercise of a domestic right, it is the abuse or abuse of the trademark, and it cannot be recognized as a legitimate exercise of a right under the Trademark Act. Thus, the application of Article 15 of the Unfair Competition Prevention Act is excluded (see Supreme Court Decision 2002Da18152, Nov. 11, 2004). Considering the above first or fifth plaintiff's trademark registration's acquisition of well-knownness and process, and the time of the defendant's trademark registration application, it cannot be seen that the defendants's trademark's trademark's use or use without consideration.

Furthermore, each trademark listed in the separate sheet Nos. 4 and 5 is designed based on the name of beer, the DNA of the United States of America where existence exists, and in the case of fashionner, using or registering his name. It is general trend that the Defendants have created or filed each trademark listed in the separate sheet Nos. 4 and 5, and the facts that the Defendants used each trademark listed in the separate sheet No. 5 through a trademark use agreement with Nonparty 1, who is granted a right to use a domestic trademark from beer, can be acknowledged based on the same facts or the overall purport of pleadings as seen earlier. However, it is difficult to view that only these facts alone do not constitute an unfair competitive act against the Plaintiff in the separate sheet Nos. 4 and 5 when the Defendants used each trademark listed in the separate sheet Nos. 4 and 5, and there is no other evidence to acknowledge it. Rather, the Defendants’ intent or negligence can be sufficiently acknowledged in light of the aforementioned process of acquiring the knowledge of the Plaintiff’s trademarks in the Republic of Korea and the process of acquiring it.

D. Sub-committee

Therefore, the defendants' act of manufacturing and selling goods, such as clothes, cosmetics, decorations, and visibility, using the trademarks listed in the separate sheet Nos. 4 and 5, constitutes an unfair competition act. Thus, the defendants' act of manufacturing and selling all of them constitutes an unfair competition act. Thus, the plaintiff's claim of this case seeking compensation for damages arising from the defendants' unfair competition act is justified, since the defendants' act of using letters (the core part of each trademark listed in the separate sheet No. 4 and 5, which are similar to or similar to the plaintiff No. 1 through 5, as the key part of each trademark listed in the separate sheet No. 1 through No. 5) or a trademark including such letters, is used by advertisement, publicity, or any other method, or by advertising,

4. Determination on the scope of liability for damages

(a) Facts of recognition;

(1) From May 10, 197 to April 27, 2000, Defendant 2 manufactured and sold goods bearing trademarks, such as the Defendant’s trademark and AROW, ELEGEE, UCHO, GALO, VALE MININO RUDY, TINO, TIN COSMA, MICHHHHOO PENNNNNN. From May 10, 1997 to April 27, 1998, Defendant 2 recorded sales sales amounting to KRW 3,82,676,642, operating income, 81,236,397, sales amounting to KRW 4,063,85,650, operating income amounting to KRW 94,50,50,243, sales amount in 199, KRW 7,392,12,16,128,812,89,298.

(2) From September 11, 1997 to March 18, 1999, Defendant 1 manufactured and sold goods bearing the trademark, such as the Defendant’s trademark and CENE, BOSINI, FALCON, LAOSE, KOTRP, DOLOP, FILA, GAO ACRI, EMMIOTRI, EMPORI, INTRCREW, etc. The Defendant’s representative director submitted a document stating that annual sales amount of KRW 200 million was increased by the Defendant’s handling of the Defendant’s trademark, and that if the above application for provisional disposition was accepted, business losses are expected to be KRW 14,627,00,00 per annum, 175,5240,00 per annum.

(3) From July 1998 to July 2000, Defendant 3 manufactured and sold goods bearing trademarks, such as the Defendant’s trademark and ENICR, WESAR, KSBE, OMA, CNDINO, VALE and TUDY, FOCE, MAEE, MACRBSN, JACOBSN, and ELE. In 1998, Defendant 3 recorded sales revenue of KRW 19,313,81,81,120, operating net profit of KRW 928,79,00, KRW 13,989,49, KRW 355, KRW 593,100,00 in sales revenue of year 199.

[Ground of recognition] Evidence No. 42-4, 4-8, Evidence No. 50, 55, Evidence No. 97-1, 2, 3, Evidence No. 99-1, Evidence No. 11, Evidence No. 13-1, 2, and Evidence No. 14-1 through 7, and the purport of the whole pleadings.

B. Judgment on the Plaintiff’s primary assertion

In calculating the amount of damages of the Defendants, the Plaintiff asserts that all of the following operating income accrued by the Defendants during the period of the Defendants’ unfair competition act under Article 14-2(2) of the Unfair Competition Prevention Act is presumed to be damages suffered by the Plaintiff under the above provision of the above Act. Since the scope of presumption under the above provision does not exceed the Plaintiff’s claim amount, the Plaintiff must prove the “amount of damages” and the “amount of damages.” Thus, for calculating the amount of damages under the above provision of the above Act, the Plaintiff must prove the “interest received” in the unfair competition. As seen in the above facts, even though the Defendants handled multiple other trademarks than the Defendant’s trademark, there is no evidence to acknowledge the degree of the percentage of goods bearing the Defendant’s trademark among the goods bearing the Defendant’s trademark among the goods handling the Defendant’s trademark or the goods handling the Defendant’s trademark, it is difficult to recognize the illegality of the Defendant’s use of the Defendant’s trademark in the related provisional disposition as being unilaterally based on the evidence presented by the Plaintiff, as well as the above evidence.

C. Judgment on the plaintiff's conjunctive assertion

Furthermore, the plaintiff sought a reasonable amount of damages pursuant to Article 14-2 (5) of the Unfair Competition Prevention Act as preliminary damages. Thus, according to the above, the plaintiff as the plaintiff due to the defendants' above unfair competition act can be sufficiently inferred that the plaintiff suffered damages equivalent to the quantity and value of the goods that could have been sold in the absence of the defendants' unfair competition act. However, since there is no accounting book showing operating profits for each item even though the defendants handled various trademarks attached, it is extremely difficult for the plaintiff to prove the amount of damages, the plaintiff's damages can be recognized pursuant to the above provision of the law. In light of the above basic facts and facts, it is reasonable to determine the plaintiff's damages in accordance with the above provision, and considering all other circumstances shown in the argument of this case, it is reasonable to determine the defendant 2 and 1 as the defendants, and as the defendant 3 as the amount of damages.

D. Determination as to the claim of consolation money against Defendant 3

Meanwhile, the plaintiff asserts that the defendant 3 suffered mental loss, such as serious degradation of the plaintiff's credit due to the unfair competitive act, and that the above defendant shall be paid consolation money of KRW 100 million. Thus, in case where the property right is infringed due to other person's illegal act, mental suffering is also recovered from the compensation for property damage. Thus, if there was any irrecoverable mental loss due to the compensation for property damage, it can be claimed consolation money for the damage only if the perpetrator knew or could have known such circumstance (see Supreme Court Decision 2001Da82507, Mar. 18, 2004, etc.). Thus, the plaintiff's claim for this part is without merit.

E. Sub-committee

Therefore, as seen earlier, as to the performance of the obligation to compensate for damages caused by the unfair competitive act, the Plaintiff: ① Defendant 2 shall be 40,000,000 won; ② Defendant 3 shall be 50,000,000 won, and each of the above amounts shall be 50,000 won from March 18, 200 following the day when the application for change of the purport of the claim and the cause of the claim was served on the above Defendants, to which it is deemed reasonable to dispute about the existence and scope of the obligation to compensate for the above Defendants from March 18, 200 to December 29, 2005; and ② from the following day to the full payment date, 20% of the annual amount from the day after the date when the application for change of the purpose of the claim and the cause of the claim was served on the Defendant; and ② Defendant 1 shall be 20,000,0000 annual amount from the day after the date when the above judgment was issued until March 21, 20005, respectively.

5. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition, and the remaining claims are dismissed for lack of merit. Among the judgment of the court of first instance, the part against the plaintiff 2 and 3 corresponding to the above quoted amount and the part against the defendant 1 ordering payment in excess of the above quoted amount among the part ordering payment in the part ordering payment in monetary amount against the defendant 1 is unfair, so the plaintiff and the defendant 1's appeal are partially accepted and they are revoked, and the above quoted amount shall be ordered to be paid to the defendant 2 and 3, and the plaintiff's claim against the defendant 1 against the plaintiff 2 and 3 shall be dismissed, and the appeal against the plaintiff 2 and 3 and the remaining appeal against the plaintiff 1 shall be dismissed for lack of merit. It is so decided as per Disposition.

[Attachment]

Judges Kim Young-tae (Presiding Judge) Kim Jong-ho