Tae-Yeon Cho

You are celebrated as one of the most knowledgeable and experienced IP lawyers in Korea. What has been your most memorable case, and why?

In 2016, we represented Louis Vuitton in litigation against The Face Shop, a subsidiary of one of Korea’s largest cosmetic companies. The product at issue used a modified version of the LV monogram as a licence from the US canvas bag maker, MY OTHER BAG. We filed a lawsuit – based on traditional unfair competition, dilution and the catch-all provision under the Unfair Competition Prevention Act – for an injunction and damages. The Face Shop raised all possible defences, and the trials lasted around two years. The briefs that both sides’ counsels submitted were close to 600 pages with significant evidence, including survey results and expert opinions. Ultimately, the Seoul Central District Court rejected the unfair competition claim, ruling that there was no likelihood of confusion. However, it accepted the dilution claim and ordered an injunction and payment of damages. The Face Shop filed an appeal to the Seoul High Court, and we filed an incidental appeal, seeking an increase in damages. The court accepted our arguments and, unlike the district court, accepted our unfair competition claim. It maintained the injunction order and increased the damages award. The Face Shop did not appeal to the Supreme Court, and the High Court decision was confirmed.

With your wealth of experience, what are your top tips for keeping abreast of all the latest developments in the IP world in Korea and beyond?

I keep myself updated on the latest developments via international legal publications like WTR and local legal publications like the Law Times and Law & Technology.

What are the biggest challenges facing your clients right now, and what advice are you giving to them to help them overcome these?

Our clients are facing new forms of infringement, such as reforming or upcycling services for luxury brand products and the sale of the software key by itself used for software certification. There is no legal precedent for such activities, so not only is it difficult to anticipate the results, but they usually require long trials and considerable legal fees. Therefore, we recommend that clients resolve cases by negotiating with infringers whenever possible. However, some infringers refuse to negotiate, in which case taking legal action is inevitable.

Which recent decisions or legislative developments have had the biggest impact on IP strategy in Korea in the past few years?

The Korean Supreme Court issued a ground-breaking decision in 2021 that changed its stance on trademark infringement, which it had held for decades. According to the previously established precedent, the use of a trademark by the registrant of a junior mark did not constitute infringement. Therefore, the senior mark’s registrant had to first file an invalidation action against the junior mark in order to assert infringement, which involved a significant amount of time and cost. However, in a Supreme Court en banc decision (rendered 18 March 2021, 2018Da253444), the court ruled that the registrant of the senior mark could assert trademark infringement without first invalidating the junior mark. This overturned long-established precedents, and I expect this new decision will have a significant effect on legal practices.

What are some of the most common mistake foreign rights holders make when seeking to enforce their rights in Korea, and how can they avoid them?

The most common mistake is assuming that it is possible to obtain accurate information for calculating damages through discovery and other procedures. Under Korean civil procedures, the system of discovery is extremely inadequate, and it is difficult to obtain accurate information. For example, infringers commonly claim that they did not maintain a record of sales or submit falsified records in order to reduce damages. It is difficult to prove that such claims or records are false, and even if they are, there are no significant consequences. Damages due to IP infringement are generally calculated based on the rights holder’s lost profits, the infringer’s profits, reasonable royalty or discretion of the court. However, the first three methods require specific information (eg, sales amounts and quantities and profits), and due to the discovery system, generally, it is difficult to obtain it. So, the amount of damages is usually calculated according to the final method, and courts tend to be conservative when doing this.