[1] Standard for determining whether a mark without distinctiveness has acquired distinctiveness by use, which is a requirement for obtaining trademark registration pursuant to Article 6(2) of the former Trademark Act, and whether such a legal doctrine likewise applies to a service mark (affirmative)

[2] In a case where Gap corporation filed an application for a patent service mark " " with credit business as designated service business, but the Korean Intellectual Property Office rejected the registration on the ground that it falls under Article 6 (1) 3 and 7 of the former Trademark Act, the case holding that the applied service mark acquired distinctiveness by use under Article 6 (2) of the former Trademark Act by taking into account all the circumstances, although the applied service mark is not indicated independently on the actual use mark, the applied service mark acquired distinctiveness by use

[1] Article 6(2) of the former Trademark Act (amended by Act No. 12751, Jun. 11, 2014; hereinafter “former Trademark Act”) provides that “A trademark may be registered, notwithstanding the provisions of Article 6(1)3 through 6, if a trademark is recognized remarkably among consumers as a trademark indicating his/her goods as a result of using the trademark prior to its application for trademark registration.” The above provision provides that a trademark has no distinctive character and thus it is inappropriate to allow a specific person to use the trademark independently. Therefore, the standard should be strictly interpreted and applied. However, the standard should be strictly interpreted and applied in light of the period of use, frequency and continuity of use, production and sale of the goods bearing the trademark, and market share, methods, frequency and amount of advertisement and publicity, quality of goods, quality of goods, reputation of the user, reputation of the trademark, degree of competition between the trademark users, and attitude of the use of the trademark, even if it indicates the goods of the particular person in question, it can be recognized that the trademark has reached the recognition of distinctiveness of the majority of the specific person.

[2] Where Company A applied for a service mark “” as a designated service business, but the Korean Intellectual Property Office rejected the registration of the applied service mark on the ground that the applied service mark constitutes “A” under Article 6(1)3 and 7 of the former Trademark Act (amended by Act No. 12751, Jun. 11, 2014), the case holding that Company A used the mark “short-term loan,” which is the same as the applied service mark in relation to the business of lending loans to customers who flown by its own marketing without going through an intermediary for about two years before applying for the applied service mark (hereinafter “direct lending method”), and Company A advertised the applied service mark as to the direct lending method using the applied service mark through broadcasting or newspapers, etc., which contains the applied service mark, but the applied service mark is not solely indicated in the applied service mark, but it is recognized that Company A is aware that the part used together with the applied service mark is identical with the applied service mark, or that the remainder of the applied service mark is recognized as identical with the applied service mark, and thus, it is commonly recognized as identical with the applied service mark or distinctive from the applied service mark.

[1] Articles 2(3) and 6(2) of the former Trademark Act (Amended by Act No. 12751, Jun. 11, 2014) / [2] Articles 2(3) and 6(2) of the former Trademark Act (Amended by Act No. 12751, Jun. 11, 2014)

[1] Supreme Court Decision 2006Hu2288 decided September 25, 2008 (Gong2008Ha, 1484)

Dalcom Loans Co., Ltd. (Law Firm Squa, Attorneys Oh Jin-jin et al., Counsel for the defendant-appellant)

The Commissioner of the Korean Intellectual Property Office

Patent Court Decision 2015Heo2914 Decided November 12, 2015

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

The grounds of appeal are examined.

1. Article 6(2) of the former Trademark Act (amended by Act No. 12751, Jun. 11, 2014; hereinafter “former Trademark Act”) provides that “A trademark may be registered, notwithstanding the provisions of Article 6(1)3 through 6, if a trademark is recognized remarkably among consumers as a trademark indicating the goods of a person as a result of using the trademark prior to its application for trademark registration.” This provision provides that trademark registration may be granted to a trademark which has no distinctive character and it is inappropriate to allow a specific person to use the trademark solely because it does not have a distinctive character. Therefore, the standard should be strictly interpreted and applied, but its standard should be strictly interpreted and applied, the period of use, frequency and continuity of use, the production and sale of the goods bearing the trademark, the market share, the method, frequency and amount of advertising and publicity, quality of the goods, quality of the trademark, reputation of the user, degree of concurrent use of the trademark, and the attitude of the use of the trademark, etc.

2. A. Review of the reasoning of the lower judgment and the record reveals the following.

(1) The Plaintiff was a company established for the purpose of “consumer financial business” around October 2002, and filed an application for the instant pending service mark “” (application number omitted) with the “credit business classified by category 36” as the designated service business on November 29, 2013. The Plaintiff was assessed as the third in the lending business in terms of the size of assets and loan balance for several years until March 31, 2015, which was the date of the instant decision.

(2) From around 2011, the Plaintiff applied for the instant pending service mark, in relation to the business of allowing customers to borrow loans through their own marketing without going through a brokerage company (hereinafter “direct lending method”), the Plaintiff used the same mark as the instant pending service mark in relation to the business (hereinafter “direct lending method”).

(3) In addition, from around 2011 to the date of the instant trial decision, the Plaintiff repeatedly advertised the direct loan method through broadcast or newspaper using marks 1 and 2 in actual use as indicated in the lower judgment, which included the instant pending service mark.

(A) The trademarks in actual use Nos. 1 and 2 are part of a series of marks used together with the instant pending service mark from advertisements made repeatedly, which are composed of a series of marks emphasizing them centering on the instant pending service mark.

(B) Although the marks in actual use Nos. 1 and 2 do not independently indicate the pending service mark, the text part used together with the part recognized as identical to the pending service mark is merely a mark commonly used in credit business with “10% only for women’s exclusive use,” which is recognized as indicating the Plaintiff as the operating entity, or the word part used together with the part recognized as identical to the pending service mark.

(C) Many of the marks in actual use Nos. 1 and 2 recognized as identical with the pending service mark are composed in such a way that the remaining parts and the size of letters or letters, color of letters, background color of letters, etc. may be separated and recognizable, while maintaining independence. The marks in actual use Nos. 1 and 2 are commonly repeated, thereby emphasizing consumers for recognition.

B. Examining these circumstances as indicated in the reasoning of the lower judgment in light of the legal doctrine as seen earlier, comprehensively taking account of the size of loans by means of direct loan, the frequency and duration of advertisements through newspapers and broadcasts, and the degree of knownness of the Plaintiff as the lending company, the pending service mark appears to have acquired distinctiveness through the use under Article 6(2) of the former Trademark Act.

C. Although it seems somewhat inappropriate for the lower court to have explained as if the mark in actual use 1 and 2 itself is recognized as identical to the pending service mark, it is difficult to view that the lower court erred by misapprehending the legal doctrine on Article 6(2) of the former Trademark Act, or by failing to exhaust all necessary deliberations, etc., contrary to what is alleged in the grounds of appeal.

3. 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 on the bench.

Justices Lee Ki-taik (Presiding Justice)