Following news shared earlier in the year about the likely introduction of a letter of consent system in Korea, the relevant bill passed the National Assembly in early October and the revised Trademark Act has recently been promulgated, with an effective date of May 1, 2024. The Act also contains several other amendments of note. Please refer to the following: Letters of consent In response to a refusal based on citation of a senior mark, a letter of consent from the owner of the senior mark may be submitted to KIPO in order to overcome the refusal ground. Further, the supplementary provisions to the amended Act clarify that letters of consent will be accepted even for applications filed before the effective date of the amendment, with the new rules applying at the time a decision on trademark registration is made by the examiner. In other words, from May 1, 2024 onwards a letter of consent may be submitted to overcome a refusal ground regardless of the filing date of the application. However, an exception is that letters of consent will not be accepted when the two marks in question are identical and both marks cover identical goods/services. A new cancellation ground applying to trademarks registered based on a letter of consent will also be available, and may be utilized in situations where anti-competitive use of the mark causes consumer confusion or deception. Division of International Registrations It is fairly common practice for applicants whose trademark application has been partially refused to divide out the problematic goods/services in order to register the remaining goods/services first. While such an option has been available for national applications in Korea, it has not been possible to do so for International Registrations unless the divided goods were being partially assigned to another party. This limitation has now been removed in the amended Act, so owners of International Registrations designating South Korea will also be able to divide their applications. Other The amended Act will further allow for: Extinguishment of rights following death of TM Owner: Currently, if the heir of a deceased trademark owner does not record the transfer of rights within three years of the date of death, the trademark rights expire. The amended Act further prescribes that if there is no known heir at the time of death, the trademark rights expire immediately. Automatic recognition of priority claim for converted applications: Where an application is converted from one type to another (e.g. additional goods registration to standard application, standard application to collective mark etc.), where the original application had a valid priority claim, the same will be recognized for the converted application. (This removes the current need to make the same priority claim for the converted application.) Easier replacement of national registration with International Registration: In cases where the Korean designation of an International Registration (IR) is for a mark identical to a national registered mark, is owned by the same party as said national registered mark, and the Korean designation of the IR mark was made after the registration date of the national mark, the application date of the IR mark will be deemed to be the application date of the national registration, with respect to any goods/services that overlap with those of the national registered mark. (This removes the current need for all goods/services of the national registered mark to be included in the specification of the IR mark.)
On September 14, 2023, the Director of KIPO’s Intellectual Property Protection & International Cooperation Bureau announced that an SNS fashion influencer had been arrested in connection with the manufacture and sale of counterfeit luxury-brand items. The influencer, referred to as “Miss A”, was the CEO of a company which was established in 2021 and had six other employees involved in marketing, finance, order management, product packaging, shipping, and customer management. Miss A used her position as a prominent fashion influencer to promote products and sell to buyers via a secret membership system limited to customers with high purchasing power. In an attempt to avoid detection, the sales were invite-only and limited to a short time frame on weekends. Starting from November 2020, the enterprise achieved a total of 2.43 billion won (approx. $1.8 million USD) in criminal profits, with an equivalent genuine item price of around $25 million USD. All together 58 brands were counterfeited, including both Korean and foreign brands, with over 20,000 items of clothing, shoes and jewelry produced. It was revealed that Miss A already had previous convictions relating to the sale of counterfeit products, based on violations of trademark law. However, as these earlier offences only resulted in fines of between 2-4 million won (approx. $1,500-3,000 USD), far less than the profit illegally obtained, it is clear that they did not act as an effective deterrent. To avoid infringing trademark laws, Miss A re-created the designs of luxury goods but attached her own labels to the imitation products. The imitation products were often based on new designs which had not yet been released in Korea, but which Miss A had early access to as a VIP luxury brand customer. Comparison of counterfeit (L) vs genuine (R) products, and display of confiscated items. (Source: Korean Intellectual Property Office) (For reference, designs are protectable for up to 20 years in Korea if formally applied for and registered at KIPO, while unregistered designs are afforded protection against “dead copy” knockoffs for a period of three years following their realization under unfair competition laws. Design applications for fashion items such as clothing and footwear are subject to “partial examination” in Korea, with registration usually granted in around two weeks. More information available here.) The enterprise did not produce the products themselves but utilized a network involving Korean clothing manufacturers, jewelry manufacturers and shoe manufacturers, as well as Korean clothing wholesalers based in Shenzen, China. These other entities — a total of 14 manufacturers — are also currently being investigated and indictment is expected soon. Following a complaint in December 2022, the Technology & Design division of the KIPO Special Judicial Police (SJP) began an investigation, revealing the systematic and large-scale nature of the operation. In addition to a search and seizure warrant executed on the residence and corporate office of Miss A, the court, in cooperation with the Daejeon District Prosecutors' Office Patent Crime Investigation Department and Crime Proceeds Recovery Team, collected and preserved assets including financial accounts, bonds and real estate property following an asset investigation. A preliminary arrest warrant was issued for Miss A during the investigation and a total of eight people, including the other six employees involved in the enterprise, have been referred to the Prosecution. From a legal perspective the result is significant in that it is the first case where criminal proceeds have been preserved based on a violation of design or unfair competition laws. It is also the largest amount which has been recovered in a single operation by the KIPO SJP since its creation. This was possible due to a January 2022 amendment of the Act On Regulation And Punishment Of Criminal Proceeds Concealment — a law which inter alia deals with the confiscation and collection of criminal proceeds, but which previously only applied to violations of a set of specific laws. While the Trademark Act was included in this earlier list, the law now more broadly covers crimes that carry a criminal penalty of three or more years’ imprisonment, thus extending to design and unfair competition laws which were previously not included. NOTES:  The term Special Judicial Police (SJP) refers to judicial police with investigative powers limited to a specific area requiring specialized knowledge. The KIPO Special Judicial Police, which has the authority to conduct criminal investigations and raids, is organized under KIPO’s Intellectual Property Protection & International Cooperation Bureau and is composed of officers with expert knowledge of IP laws, including PhD holders, patent attorneys, lawyers and forensic experts. When founded in 2010 the KIPO SJP’s jurisdiction was limited to the investigation of trademark infringements, but has since grown to encompass design, patent, and trade secret violations. The KIPO SJP are commonly referred to as the “Trademark Police” or “Technology Police”, depending on the relevant division.
The Korean IP Office (KIPO) recently introduced revisions to certain official fees, with effect as of August 1, 2023. A summary of the revisions is below. PATENTS/ Reduction of registration fees for patents: Registration fees for patents have been reduced (by 10% on average). This includes both annual basic fees and annual additional fees for each claim. PATENTS/ Increase in examination fees for patents: The fees for requests for examination for patents have been increased (by 16 percent on average; basic fee and additional fee per claim). PATENTS/ Increase in divisional application fees (introduction of progressive fee system): A progressive fee system has been introduced for divisional applications, in which the official fee progressively increases with the number of divisional applications. Previously, the fee remained constant regardless of the number of divisional applications made. TRADEMARKS/ Reduction in threshold number of designated goods subject to additional charge (20 items → 10 items): Previously, if the number of goods in any class was in excess of 20 items, an additional fee of KRW2,000 was charged per excess item. The revision reduces this threshold number of goods: an additional charge is now applied per item in excess of 10 items in any class. TRADEMARKS/ Reduction of application, registration, renewal fees: Trademark application, registration and renewal fees have been uniformly reduced by KRW 10,000. OTHER REVISIONS/ Revision to fees for recordation of transfer of rights: uniform for each type of right: Previously, fees for recordation of transfer were different for patents, utility models designs, and trademarks. The revision introduces a uniform rate of KRW 40,000 for each type of right.