[1] Where only the plaintiff appealed against the judgment of the court of first instance that partly won the plaintiff, and the defendant did not file an appeal or incidental appeal, and the appellate court rendered a judgment that partly admitted the plaintiff's appeal, whether the defendant can file an appeal as to the part in favor of the plaintiff in the judgment of first instance (negative)

[2] Where a trademark right holder, etc. claims compensation for damages caused by infringement of trademark rights, etc., matters to be asserted and proved in order to be subject to Article 67(5) of the Trademark Act, and the degree of assertion and proof as to the occurrence of damages / Whether the trademark right holder actually assumes that he/she is liable to compensate for losses arising from infringement of trademark rights (affirmative in principle)

[1] Articles 415 and 422 of the Civil Procedure Act / [2] Article 67 (5) of the Trademark Act

[1] [2] Supreme Court Decision 2007Da22514, 22521 decided Oct. 29, 2009 (Gong2009Ha, 1968) / [2] Supreme Court Decision 96Da43119 decided Sept. 12, 1997 (Gong197Ha, 3083)

Shepherd Co., Ltd. (Attorney Ba-Ba, Counsel for the plaintiff-appellant)

Home wave Korea Co., Ltd.

Seoul High Court Decision 2012Na57066 decided May 9, 2013

The defendant's appeal against the part in favor of the plaintiff in the first instance judgment is dismissed. The plaintiff's appeal and the defendant's remaining appeal are dismissed. The costs of appeal are assessed against each party.

1. We examine ex officio the defendant's appeal as to the part of winning the plaintiff in the judgment of the first instance as to the legitimacy of the appeal.

According to the records, the plaintiff filed a lawsuit against the defendant seeking the amount of damages of 374,354,837 won and damages for delay on the ground of trademark infringement, etc., and the first instance court recognized the defendant's liability for damages and rendered a judgment ordering the defendant to pay the amount of damages of 21,290,322 won and damages for delay thereof, which are part of the claim amount. The plaintiff only appealed, and the court below accepted part of the plaintiff's appeal and ordered the defendant to pay the amount of damages of 28,709,678 won and damages for delay.

In a case where the plaintiff appealed against the judgment of the court of first instance, but the defendant did not appeal or incidental appeal, the part in favor of the plaintiff in the judgment of first instance was transferred to the appellate court due to the plaintiff's appeal, but was excluded from the scope of the judgment of appellate court. In such a case, if the appellate court partially accepted the plaintiff's appeal and partly revoked the part in favor of the plaintiff in the judgment of first instance and received the plaintiff's claim against that part, it is limited to the part in the judgment of first instance, and the part in favor of the plaintiff in the judgment of first instance is limited to the part in the judgment of first instance, and it cannot be the subject of the defendant's appeal since the appellate court rendered a judgment as to the part in favor of the plaintiff in the judgment of first instance. Therefore, the defendant who did not appeal against the judgment of first instance in favor of the plaintiff in part of the plaintiff, cannot file an appeal against the part in favor of the plaintiff in the judgment of first instance (see Supreme Court Decision 2007Da

Therefore, in this case, the appeal filed by the Defendant against the Plaintiff’s winning portion of the first instance judgment is unlawful as a final appeal against the portion that cannot be the subject of final appeal.

2. We examine the Defendant’s remaining grounds of appeal and the Plaintiff’s grounds of appeal (to the extent of supplement in case of supplemental appellate briefs not timely filed).

A. As to the Defendant’s first ground of appeal

(1) Article 67(5) of the Trademark Act provides, “Where it is extremely difficult to prove facts necessary to prove the amount of damages in a lawsuit for infringement of trademark rights, the court may recognize a reasonable amount of damages based on the purport of the entire pleadings and the result of examination of evidence, even though the damage was incurred in a lawsuit for infringement of trademark rights

In cases where a trademark right holder, etc. claims compensation for damages caused by infringement of a trademark right, etc., the above provision is only a provision that reduces his/her responsibility to assert and prove the damages suffered by the trademark right holder, etc., taking into account that it is difficult to prove the amount of such damages, and cannot be viewed as the presumption of damages incurred by infringement of the trademark right. Therefore, in order for the trademark right holder to be subject to the above provision to use the registered trademark as a business and it is necessary to assert and prove that the trademark right holder actually suffered losses by infringement of the trademark right. However, in light of the purport of the above provision, it is sufficient to assert and prove the possibility of the damages or the existence of the probability in cases where the trademark right holder proves that he/she carries on the same kind of business as the infringer, barring any special circumstance (see Supreme Court Decisions 96Da4319, Sept. 12, 1997; 200Da2514, Oct. 29, 2009).

(2) The reasoning of the lower judgment and the record reveal the following: (a) the Plaintiff is a corporation that manufactures and sells household appliances, etc., such as lux products, which are identical business with the Defendant; (b) the Plaintiff established a non-exclusive license of the instant trademark as indicated in the lower judgment, and operated business, such as collecting user fees or counseling services, on products subject to the establishment of a non-exclusive license; and (c) the Defendant infringed the Plaintiff’s trademark right by selling or distributing imported goods and inventory products with the instant trademark without undergoing procedures, such as consultation on the use of the trademark, from February 1, 2010 to March 29, 2010, after the termination of the non-exclusive license agreement with the Plaintiff.

Examining the above facts in light of the legal principles as seen earlier, since it can be deemed that the Plaintiff suffered damages due to the Defendant’s infringement of trademark rights, the Defendant is liable to compensate the Plaintiff for damages arising from the infringement of trademark rights.

Although the reasoning of the lower judgment is somewhat inappropriate, the lower court’s conclusion that recognized the Defendant’s liability for damages is justifiable. In so doing, contrary to what is alleged in the Defendant’s ground of appeal, the lower court did not err by misapprehending the legal doctrine on the presumption of damages under Article 67(5)

B. As to the Defendant’s ground of appeal Nos. 2 and 2 and 3

According to the reasoning of the judgment below, the court below acknowledged the period for which the defendant infringed the plaintiff's trademark right from February 1, 2010 to March 29, 2010, and determined the amount of damages under Article 67 (5) of the Trademark Act by comprehensively taking account of the following circumstances: (a) the defendant's goods sold in violation of the plaintiff's trademark right during the above period are equivalent to 110,806,382 won at the market price; and (b) the defendant imported the main goods with the trademark of this case and sold them at the import price plus approximately about about 55-59% at the import price after the defendant imported them; (c) it is difficult to calculate profits that the defendant received from the act of infringement because it is difficult to prove sales expenses, etc.; (b) the difference between the quantity of inventory goods the defendant notified that he was held on the part of the plaintiff around the termination of the contract of this case and the quantity of inventory goods remaining after the investigation of the plaintiff's side; (d) the product details revealed that the defendant did not disclose basic data; and (e) the amount of damages suffered for 0000.

Examining the record, the aforementioned recognition and determination by the lower court is justifiable. Contrary to the allegations in the grounds of appeal by the Defendant and the Plaintiff, there were no errors by misapprehending the legal doctrine regarding the scope of damages under the Trademark Act, or by exceeding the bounds of the principle

C. The Plaintiff’s ground of appeal No. 1

The lower court determined that it is difficult to view that the Defendant’s act of indicating the Defendant’s trade name on the product packaging or advertisement, etc., while purchasing from a lawful trademark user the product on which the instant trademark was attached, and selling it again, constituted trademark infringement.

Examining the relevant legal principles and records, the above determination by the court below is justifiable. Contrary to the Plaintiff’s grounds of appeal, there were no errors by misapprehending the legal principles on the exhaustion of trademark rights and infringement of trademark

3. Therefore, the defendant's appeal against the part in favor of the plaintiff in the judgment of the first instance is dismissed. The plaintiff's appeal and the defendant's remaining appeal are dismissed. The costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Sang-hoon (Presiding Justice)