[1] Purport of the provision of Article 22 of the Commercial Act and whether a person who registered prior to registration may bring an action against the subsequent registrant for cancellation of registration of a trade name pursuant to the above provision (affirmative)

[2] The meaning of "illegal purpose" under Article 23 (1) of the Commercial Code

[3] The meaning of the legal principle of forfeiture or invalidation

[1] Article 22 of the Commercial Code provides that "the trade name that is registered by another person shall not be registered as the trade name of the same business in the same Special Metropolitan City, Metropolitan City, Si, Si, or Gun." The purport of the above provision is to prevent mistake or confusion among the general public with regard to the trade name first registered within a certain area, to protect trust in such trade name, and to protect the benefit that the first registrant of the trade name intends to distinguish the trade name from the trade name of another person. On the other hand, Article 164 of the Non-Contentious Case Litigation Procedure Act provides that " unless the registration of the trade name is clearly distinguishable from that of another person for the same business in the Special Metropolitan City, Metropolitan City, Si, Si, or Gun, the first registered trade name shall not be registered." Thus, Article 22 of the Commercial Code provides that the first registered trade name shall be effective in the procedure of trade name registration, and if the trade name is registered together with the effect of prohibiting any registration of the trade name that is registered by another person for the same business, it is reasonable to deem that the first registrant of the registration shall be cancelled.

[2] Article 23 (1) of the Commercial Act provides that "no person shall use any trade name that may mislead any person to believe for the business of another person for an improper purpose," and Article 23 (4) of the same Act provides that "a person who uses any trade name registered for the same business as another person in the same Special Metropolitan City, Metropolitan City, Si, Si, or Gun shall be presumed to have been used for an improper purpose." "unlawful purpose" refers to the intention of using any name in his trade name to mislead any general public as being indicated in his/her name for the business of another person.

[3] The legal principle of forfeiture or invalidation is a derivative principle based on the principle of trust and good faith, and it means that the exercise of the right is not permitted when it would result in a violation of the principle of trust and good faith, because the right holder had not exercised his/her right over a long-term period, even though there was an opportunity to exercise his/her right.

[1] Article 22 of the Commercial Act, Article 164 of the Non-Contentious Case Litigation Procedure Act / [2] Article 23 (1), (4) of the Commercial Act / [3] Article 2 of the Civil Act

[2] Supreme Court Decision 94Da31365, 31372 decided September 29, 1995 (Gong1995Ha, 3591), Supreme Court Decision 2003Da12601 decided September 26, 2003 / [3] Supreme Court Decision 93Da26212 decided June 28, 1994 (Gong1994Ha, 2081)

UNTT Co., Ltd. (Law Firm Boo, Attorney Kim Jae-gu, Counsel for the defendant-appellant)

[Judgment of the court below]

Seoul High Court Decision 2001Na15134 delivered on October 10, 2001

The appeal is dismissed. The costs of appeal are assessed against the defendant.

1. As to the grounds of appeal Nos. 1 and 2

Article 22 of the Commercial Act provides that "the trade name that is registered by another person shall not be registered as the trade name of the same business in the same Special Metropolitan City, Metropolitan City, Si, Si, or Gun." The purport of the above provision is to prevent mistake and confusion among the general public with regard to the trade name first registered within a certain area, to protect trust in this regard, and to protect the interests of the person who first registered the trade name in order to distinguish the trade name from that of another person. On the other hand, the registration under the trade name shall not be made unless it is clearly distinguishable from that of another person for the same business in the Special Metropolitan City, Metropolitan City, Si, Si, or Gun." Article 164 of the Non-Contentious Case Litigation Procedure Act provides that "the registration under the trade name shall not be made separately from that of another person for the same business." Thus, Article 22 of the Commercial Act provides that the first registered trade name in the Special Metropolitan City, Metropolitan City, Si, or Gun shall not be clearly distinguishable from that of another person for the same business.

According to the reasoning of the judgment below, the court below determined to the effect that the Plaintiff’s business and the Defendant’s business constituted the same type of business as the Plaintiff’s business in terms of social norms, and thus, the Plaintiff’s business and the Defendant’s business constitute the same type of business as the Defendant’s business, and the Defendant’s business are the Seoul Special Metropolitan City, and the major parts of the business are identical to that of the Seoul Special Metropolitan City, to the extent that the general public can not be easily distinguished. The Plaintiff and the Defendant’s corporate registry include manufacturing and selling of computer peripherals devices or electronic parts and computer parts manufacturing and selling business, and 30% of the Plaintiff’s total sales are generated from the assembly and sales business of computer hardware, such as the Defendant.

In light of the records and the above legal principles, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to Article 22 of the Commercial Act as otherwise alleged in the ground of appeal

2. As to grounds of appeal Nos. 3 and 4

Article 23 (1) of the Commercial Act provides that "no person shall use any trade name that may be mistaken for another person's business for an improper purpose," and Article 23 (4) of the same Act provides that "any person who uses any trade name registered for the same business as another person in the same Special Metropolitan City, Metropolitan City, Si, or Gun shall be presumed to have been used for an unlawful purpose." "illegal purpose" refers to the intention of using any name in his/her trade name to mislead general public to believe that another person's business is indicated in his/her name (see Supreme Court Decisions 94Da31365, 31372, Sept. 29, 195; 2003Da12601, Sept. 26, 2003).

According to the reasoning of the judgment below, the court below held that the defendant's use of the above trade name does not affect the plaintiff's business because it uses "Nxtetetetetetetetetetetetetetetetetetetetetetetetetetetetetetete" which is a trade name first registered as the same business in Seoul Special Metropolitan City, and thus it is presumed that the above trade name is used for an unlawful purpose. The defendant's assertion that there is no unlawful purpose in using the above trade name is not unfair. Since the plaintiff's development and sale of software and the defendant puts emphasis on the manufacturing and sale of computer hardware, the specific contents of the business actually operated by the plaintiff and the defendant are different, but it cannot be concluded that the plaintiff's main customer floor is clearly differentiated due to the occurrence of 30% of the total sales in the assembly and sale of computer hardware such as the defendant's business, and it cannot be viewed that the use of the above trade name does not affect the plaintiff's business, and on the other hand, the defendant's claim against the defendant's use of Qtetetetetetetetetetetetetetetetetete.

In light of the records and the legal principles as seen earlier, the above judgment of the court below is just, and there is no error in the misapprehension of facts or misapprehension of the relevant legal principles due to a violation of the rules of evidence or incomplete hearing.

3. As to the fifth ground for appeal

The legal principle of forfeiture or invalidation is a derivative principle based on the principle of trust and good faith, and it means that the exercise of rights is not permitted when the other party, who is the obligor, has already been in violation of the principle of trust and good faith, because the right holder did not exercise his rights over a long period, notwithstanding the existence of an opportunity to exercise his rights (see Supreme Court Decision 93Da26212, Jun. 28, 1994, etc.).

According to the reasoning of the judgment below, the court below held that the claim of this case constitutes an abuse of right or the plaintiff's mutual right cannot be deemed extinguished in accordance with the principle of invalidation solely on the ground that the plaintiff sought the cancellation of the trade name registration of this case and the prohibition of mutual use of the trade name after eight years have passed since the establishment registration of the defendant was completed. According to the records, the plaintiff requested the suspension of use of trade name, etc. on and around the 1999 when seven years have passed since April 23, 1992 after the establishment registration was completed, and filed the lawsuit of this case on April 14, 200. According to the above circumstances and the above legal principles, it is difficult to view that the above period as the defendant was a sufficient period to believe that the plaintiff did not exercise his right as the defendant, and it cannot be deemed that the claim of this case was in violation of the principle of good faith or forfeited under the principle of good faith merely on the ground that the plaintiff did not take any more prompt legal measures against the defendant.

4. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Hyun-chul (Presiding Justice)