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Practice Notes Acquired Distinctiveness & Consumer Survey Guidelines in Korea

In April this year the Intellectual Property Trial & Appeal Board (IPTAB) released guidelines concerning the use of consumer surveys to show consumer awareness, and in May the KIPO-published Trademark Examination Report contained general guidelines regarding the criteria considered by examiners when determining whether distinctiveness has been acquired through use.

We will take a look at these guidelines in the light of a recent IPTAB decision on an appeal against a refusal decision where the mark was determined to have acquired distinctiveness.

Acquired Distinctiveness: Relevant Law & Guidelines

Law

Descriptive marks must acquire “secondary meaning” distinctiveness to be registerable as trademarks. If a mark is not inherently distinctive (e.g. the mark indicates the quality, effect, usage etc. of the goods/services, is a simple mark, etc.), Article 33(2) of the Korean Trademark Act provides that the mark may still be registrable when “such trademark is recognizable to consumers as a trademark indicating the source of goods of a specific person as a result of using the trademark before filing an application for trademark registration”. In such case, protection is granted only for the actual goods/services the mark has been used with.

The Trademark Act was amended in June 2014 to lower the bar of acquired distinctiveness; previously the relevant mark had to be “remarkably recognized among consumers” (emphasis added), while the current Act requires the mark to be simply “recognizable to consumers” as having a source-indicating function. Despite this amendment, however, the actual number of registrations granted following recognition of acquired distinctiveness remained low, with a total of 68 cases in the three-year period following the revision.

Guidelines

In an effort to combat this, following a December 2018 study commissioned and published by the Korean IP Office (KIPO) which analyzed around 400 court decisions and over 1,000 IPTAB decisions dealing with acquired distinctiveness from over a 30+ year period (“A Study on Establishing Standards for Recognition of Acquired Distinctiveness Through Using Marks in Major Products and Building Database for Cases of Judgement on Acquired Distinctiveness”), the following guidelines were made available earlier this year (note that all use/sales/advertising etc. data must be specific to Korea):

Period of Use
  • In principle, 5 years of genuine non-competitive continuous use required (market conditions considered).
  • Acquired distinctiveness obtained in a shorter period based on large-scale advertising and publicity may also be recognized.
Method/Frequency of Use Use of trademark on relevant products (direct use) and exposure in mass media, internet portals etc. (indirect use) both considered.
Sales
  • Turnover and number of sales considered with respect to the product price and size of the relevant market.
  • Market share data considered with respect to the number of competitors in the relevant field.
  • In situations where actual turnover is modest but an SME accounts for a large share of the market in a field with small market size, this fact will be considered.
Marketing/Publicity
  • All kinds of advertising including online promotion considered (not only TV and printed media).
  • In cases such as prescription medicine where advertising is not possible, this fact will be considered.
Consumer Surveys (Detailed separately below)
Product/Market Conditions Even in cases where the trademark is considered to indicate a specific source, if the mark should be available for individuals/competitors to use freely, acquisition of distinctiveness may not be admitted.
Related Legal Precedents
  • Related decision based on the Trademark Act stating that the mark is an indication of a specific source: acquired distinctiveness recognized.
  • Related decision based on the Unfair Competition Prevention and Trade Secret Protection Act stating that mark is widely known domestically or has a source-indicating function: taken into account when deciding whether distinctiveness has been acquired.
Identity of Marks Where the applied-for mark and the mark in actual use differ, the following conditions apply:
  • Difference in uppercase/lowercase or size only ➜ OK (e.g. “” vs “”)
  • Use of only one part of a mark consisting of same mark in Korean and other languages ➜ OK (e.g. “” vs “ ”)
  • Combined word/device mark used in different form ➜ Strength of combination and actual use considered:
    • Recognized: “” vs. “
    • Not recognized: “” (Korean transliteration of “The Foot shop”) vs. “
Identity of Goods/Services Should be practically identical, though need not be physically identical.

KIPO has also amended their internal procedures, with claims of acquired distinctiveness now evaluated by a three-examiner team rather than a single examiner. If this initial evaluation is positive, a special committee for judging acquired distinctiveness will make a final assessment before the decision is rendered.

Consumer Surveys: Guidelines

With the increasing use of consumer surveys in trademark matters, the IPTAB released the following guidelines concerning survey credibility in April this year:

Survey-Conducting Organization
  • Survey method must be verified and conducted by a reputable organization (judgement based on size of organization, no. of surveys conducted, number of full-time analysts on staff etc.)
  • Organizations already registered with the National Election Survey Deliberation Commission are deemed to be independent polling organizations (currently 80 members including Gallup Korea, etc. which are vetted for objectivity and reliability in carrying out election polls).
Sample Selection
  • The characteristics (location, sex, age etc.) of the consumers of the relevant trademark/product must be reflected in the survey.
  • As the relevant respondents may be different from product to product, where the product characteristics are important (e.g. female hygiene products, medicines used to treat specific diseases etc.), these characteristics must be reflected in the sample.
Survey Credibility
  • Response rate of below 30% will be deemed unreliable, and over 50% reliable. (30%-50% at examiner’s discretion.)
  • Sample size may vary depending on the type of product, but below 500 will generally be deemed unreliable, and over 1,000 reliable.
  • Question style must be precise and non-leading.
  • Questions must deal with only one topic, and be worded in straightforward, clear language.
  • Content must be understandable by all respondents in the same manner, with no unclear content left to assumption.
  • Questions must be relevant, and not outside the scope of ability/expertise of the respondents.
  • Surveys conducted by unverified organizations or using unverified methods will be deemed non-credible.
  • Credibility of the results will deteriorate if the survey is conducted too long after the relevant judgement reference time (depending on the situation this may be present day, or an application date etc. in the past).

IPTAB Appeal: Decision No. 2018Won2975

The case relates to a Korean-language trademark application for “최상위 수학” (“Top-level math” in English translation) covering the class 16 goods “mathematics study books or papers; mathematics teaching materials (except apparatus)”. The mark was filed in June 2017 and subsequently refused in October 2017 on absolute grounds for indicating the nature (quality, content) of the goods, with the examiner mentioning that the mark would be intuitively understood as meaning “math [problems] of the highest level”.

The applicant filed an argument containing (i) explanation that the mark could be understood in numerous ways; (ii) comparison with other similar precedents where distinctiveness was acknowledged; (iii) information showing use of the mark for 14 years with sales and advertising data; and (iv) results of a 500-respondent consumer survey. Based on this, the applicant argued that the mark had acquired distinctiveness through use. However, the applicant’s arguments were not accepted and in May 2018 a final refusal was issued by the KIPO examiner.

The decision was appealed to the IPTAB, where the two questions considered were (1) whether it was right to refuse the mark on absolute grounds, and (2) whether the mark had acquired distinctiveness through use. In their October 15, 2019 decision the tribunal confirmed that the examiner’s original decision to refuse the mark on absolute grounds was correct, but upon review of the submitted evidence (shown in the below) the applicant’s claim of acquired distinctiveness was approved.

The application was returned to KIPO for re-examination and published for the purposes of public opposition on November 12th.

Evidence Supporting Claim of Acquired Distinctiveness

The new guidelines do not specify any particular minimum sales/advertising etc. requirements, with claims being considered on a case-by-case basis in consideration of the size of the relevant market, consumers etc. However, looking at recent rulings where a claim of acquired distinctiveness has been approved may offer some further insight.

Below are the details of a handful of cases to which the relaxed requirements for acquired distinctiveness applied, with the details of the above-discussed 2018Won2975 IPTAB appeal provided first:

  • Trademark
  • Applicant
  • Class
  • App. Number (Date)
Supporting Evidence & Information (Korea-specific)
  • 최상위 수학 (“Top-level math”)
  • Didimdol Co.,ltd
  • Class 16
  • 40-2017-0080693 (2017-06-29)
[Use] 15+ years (study materials for elementary, middle and high school students)

[Sales] 2010-2017: Approx. 2.98 million books / Approx. $18.3 million USD

[Advertising] 2008-2017: Approx. $400,000 USD (TV, banners, lectures, TV program sponsorship etc.)

[Consumer Survey] Conducted by Korea Trademark & Design Association / 500 people (students/parents/teachers) / 77.2% TM recognition; 56.2% associate mark with applicant

  • PARFUMS CHRISTIAN DIOR
  • Class 03
  • IR 1221382 (2014-08-08)
[Use] From October 1999 (perfume bottles)

[Sales] 2010-2014: Approx. $14.3 million USD

[Advertising] 2010-2014: Approx. $1.9 million USD (magazines, TV, internet search)

[Consumer Survey] N/A

  • 아세아 (“ASIA” / “ASEA”)
  • ASIA TECHNOLOGY CO., LTD
  • Class 07
  • 40-2014-0085764 (2014-12-16)
[Use] From September 1945 (agricultural machinery)

[Sales] Jul 2012 – Jun 2013: 23,643 units / Approx. $46 million USD

[Advertising] 2013-2015: Approx. $110,000 USD (newspapers, magazines, exhibitions, shows)

[Consumer Survey] N/A

  • Brand New Music Co., Ltd.
  • Class 09
  • 40-2015-0032784 (2015-05-04)
[Use] From 2011 (downloadable music files, albums, CDs)

[Sales] 2015: 50+ albums / Approx. $1.7 million USD

[Exposure] Numerous industry awards (hip-hop, KPOP) / SNS exposure: 66,000 Facebook followers; 24,000 Twitter followers; 83,000 YouTube subscribers

[Consumer Survey] N/A

  • SONY CORPORATION
  • Class 09
  • 40-2014-0059037 (2014-09-03)
[Use] From 2006 (cameras, lenses)

[Sales] Cameras: 2012-2014 Approx. $271 million USD / Lenses: 2013-2015 Approx. $32 million USD

[Advertising] 2013-2014 Approx. $16.8 million USD for the “α” (alpha) series camera (TV, magazines)

[Exposure] Promoted to consumers via camera classes, advertising via SNS channels

[Consumer Survey] Conducted by Gallup Korea / 100 people (age 20-49 male+female) / 75% knew TM related to cameras or lenses; 54.7% associate mark with applicant

  •    (“The Healthier”)
  • CJ CheilJedang Corporation
  • Class 29
  • 40-2016-0042617 (2016-06-08)
[Use] From May 2010 (processed meat: ham, sausage etc.)

[Sales] Approx. $290 million USD (total from time of product launch)

[Advertising] Approx. $10.6 million USD (total from time of product launch) (TV, newspapers, magazines, promotional items, home shopping etc.)

[Exposure] Naver Blog (~340,000 results), Daum blog (~130,000 results), News (~32,000 results), YouTube (~4,000 results; 290,000+ views of videos with actress JUN Ji-Hyun)

[Market Share] 2015: 8.2% for processed meat (#1 among 1,000+ processed meat brands)

[Consumer Survey] N/A

  • 싸이버거 (“Thigh Burger”)
  • Haimarrow Food Service Co., Ltd.
  • Class 30
  • 40-2015-0016852 (2015-03-06)
[Use] From Jan 2005 (hamburgers)

[Sales] Approx. $93 million USD (total from time of product launch)

[Advertising] Approx. $4.4 million USD (Jan 2013 – Sep 2015) (TV, baseball stadium)

[Exposure] 961 stores nationwide (as of Sep 2016), blogs, Facebook etc.

[Consumer Survey] N/A

  • APP STORE
  • Apple Inc.
  • Class 35
  • IR 1276162 (2015-10-09)
[Use] From Jul 2008 (computer software sales via the internet)

[Sales] Korea: 2015 Approx. $2.3 billion USD, 2016 Approx. $1.7 billion USD

[Advertising] Korea: 2008-2015 Approx. $76 million USD

[Exposure] Korea: Approx. 2.5 billion downloads total (via Apple iPhone, iPad, iPod)

[Consumer Survey] Conducted by Gallup Korea (2017)  / 91.6% had heard of “APP STORE” (63.3% in 2013); 50.7% associate mark with applicant; 9.6% consider mark to not have source-indicating function

  • 국민관광상품권  (“National Tourism Gift Card”)
  • KOREATRAVELS CO., LTD
  • Class 36
  • 41-2015-0038118 (2015-08-11)
[Use] From 2001 (issuance of gift cards)

[Sales] Approx. $850 million USD (total from time of product launch)

[Exposure] 2015: Approx. 15,000 gift cards issued; Approx. 20 million total from time of product launch; Redeemable in stores nationwide

[Consumer Survey] N/A

  • 여행박사 (“Dr. Tour” / “Dr. Travel”)
  • NHN Doctortour Corporation
  • Class 39
  • 41-2015-0021932 (2015-05-11)
[Use] 2010-2015 (tour booking/agency services)

[Sales] Approx. $86 million USD (total from time of launch)

[Advertising] Approx. $11.5 million USD (newspapers)

[Exposure] Various industry awards

[Market Share] 2015 summer season: 3rd largest share of online market

[Consumer Survey] N/A

  • 천리포수목원 (“Chollipo Arboretum”)
  • Chollipo Arboretum
  • Class 41
  • 41-2015-0052464 (2015-11-03)
[Use] From 1979 (operation of arboretum/botanical garden)

[Advertising] Newspapers, magazines, online broadcasts etc.

[Exposure] Approx. 1.6 million visitors in past 9 years; included in list of “100 domestic destinations all Koreans should visit”

[Consumer Survey] N/A

 

 

Written by Ben YUU, Jonathan MASTERS

2019-12-03 10:25:00

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