[edit] Supreme Court Decision 98Do2250 delivered on April 10, 2001 [Violation of the Trademark Act (Changed to: Violation of the Unfair Competition Prevention Act)]
【Main Issues】
[1] Criteria for product's packaging and container to be included in the "label stating that the product is another's property" as regulated in Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act
[2] The method of describing whether or not the product labels have similarities in situations under Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act where the product label includes the combination of letters, shapes, symbols, and colors.
[3] The standard in determining whether or not the product label causes confusion with other products under Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act
[4] The case which holds that the product label which causes confusion between "Green Wrap" and "Clean Wrap" is in violation of the former Unfair Competition Prevention Act
【Summary of Decision】
[1] Normally, the product's package and the container label design's colors or structures are used to enhance the special characteristics of the product rather than to mark its source. If such use of a design label proceeds continuously and exclusively or such practice results in continued advertisement of distinguished shape or color to provide that specific image to the people who demand the product, then this situation falls under "another person's product label" as provided in Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998).
[2] The standard in deciding whether or not the product labels have similarities in situations where the product label includes the combination of letters, shapes, symbols, and colors under Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) is decided by considering and comparing all of the elements of the design in the viewpoint of the ordinary person who transacts or demands the products.
[3] The standard in determining whether or not the product label causes confusion with other products under Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) is determined by taking into consideration the label's general meaning, degree of the ability to distinguish, degree of similarity, the shape of use, the competition among businesses that arise from such similarity, the existence of competition, and the imitator's intent of use.
[4] The case holds that the product label which causes confusion between "Green Wrap" and "Clean Wrap" is in violation of the former Unfair Competition Prevention Act.
【Reference Provisions】 [1] Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) / [2] Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) / [3] Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) / [4] Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998)
Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) (definitions) For the purpose of this Act, the definitions of terms shall be as follows:
1. The term "act of unfair competition" means any of the following acts, regardless of the purpose thereof:
(Ga) Act causing confusion with the goods of another person by using such thing that is identical with or similar to a name, trade name, trademark, container or package of goods of another person or other mark identifying the goods of another person which is widely recognized in Korea, or by selling, distributing, importing or exporting goods incorporating such thing
(Na)~(Ma) omitted
2.~3. <omitted>
【Reference Cases】 [1][2] Supreme Court Decision 98Da63674 delivered on February 23, 2001 (Gong 2001Sang, 723) / [1] Supreme Court Decision 94Do1947 delivered on December 2, 1994 (Gong1995Sang, 526), Supreme Court Decision 96Do2295 delivered on November 26, 1996 (Gong1997Sang, 147), Supreme Court Decision Ja96Ma365 delivered on November 27, 1996 (Gong1997Sang, 72), Supreme Court Decision Ja 96Ma675 delivered on April 24, 1997 (Gong1997Sang, 1551) / [2] Supreme Court Decision 76Da847 delivered on July 25, 1978 (Gong1978, 11000)
【Defendant】 Defendant
【Appellant】 Prosecutor
【Court of First Instance】 Eastern Branch of Seoul District Court judgment 95Godan1875 delivered on October 7, 1997
【Court of Second Instance】 Seoul District Court judgment 97No8683 delivered on June 30, 1998
【Disposition】 The court below's judgment shall be reversed and the case shall be remanded to the Appellate Division of Seoul District Court.
【Reasoning】 The grounds for appeal by the prosecutor are examined as follows.
1. According to the judgment of the court below, the court acknowledged that label such as "Clean Wrap," produced and sold by the injured party Clean Wrap Corp., is a well recognized label within the country. However, since the word "wrap" is universally used for plastic wrapping paper, it is difficult to find that the injured party's product name "Clean" for "Clean Wrap" and the defendant's name "Seron Green" for "Green Wrap" share similarities in their external name and notion and the products package color and design itself do not cause confusion. Therefore, the court adjudicated that the defendant is found innocent because this case's accusation that the defendant's product "Green Wrap" causes confusion with the product "Clean Wrap" falls within a category where the facts are not sufficient to constitute a crime.
2. Normally, the product's package and the container label design's colors or structures are used to enhance the special characteristics of the product rather than to mark its source. If such use of a design label proceeds continuously and exclusively or such practice results in continued advertisement distinguished shape or color to provide that specific image to the people who demand the product, then this situation falls under "another person's product label" as provided in Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998). (See Supreme Court Decision 94Do1947 delivered on December 2, 1994, Supreme Court Decision 96Do2295 delivered on November 26, 1996, Supreme Court Decision Ja96Ma365 delivered on November 27, 1996, Supreme Court Decision Ja 96Ma675 delivered on April 24, 1997, etc.)
Additionally, the standard in deciding whether or not the product labels have similarities in situations where the product label includes the combination of letters, shapes, symbols, and colors under Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act is decided by considering and comparing all of the elements of the design as a whole in the viewpoint of the ordinary person who transacts or demands the products. (See Supreme Court Decision 76Da847 delivered on July 25, 1978.)
Furthermore the standard in determining whether or not the product label causes confusion with other products under Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act (which was amended by the Unfair Competition Prevention and Trade Secret Protection Act, Law No. 5621 of December 31, 1998) is determined by taking into consideration the label's general meaning, degree of the ability to distinguish, degree of similarity, the shape of use, the competition among businesses that arise from such similarity, the existence of competition, and the imitator's motive (intended use).
3. According to the records, the injured party, Clean Wrap Corp. (hereinafter referred to as the "injured party"), argued that, since they have been using a long rectangular box shaped package to put in the food-packaging wrap continuously and exclusively for a long period and the continued advertisement on the package label "Clean Wrap's" lettering, shape, and color had provided a specific individualized characteristic of the product as to bring the image of the Clean Wrap to the users by the time the defendants had used that label to manufacture and sell their own products (January of 1994). Therefore, the injured party argues that the defendants' product label's letter, shape, and other elements falls under the category of "another person's product label" as provided in Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act.
Next, in comparing the product label of the injured party and the defendant, the actual market practice among regular users (housewives and females) when buying the product in question is that they look at the top or the front of the package where the product source is marked rather than the bottom of the package where the manufacturer is marked. When looking at the injured party's package, it has big Korean lettering, "Clean Wrap" on the center of the front and the same lettering in English on the back. The background of the lettering is made of yellow on the left side, light green on the middle, and green on the right side. In addition, the left part of the lettering has drawings of fruits and the right part has the F.D.A mark. In comparison, when looking at the defendant's product, they also use the same rectangular box shaped package used by the injured party. The brand label contains the lettering "Green Wrap" (both in Korean and English) which is similar to the injured party's product label (Clean Wrap) in font, size, position, color, and name. Also, the defendant's background label contains a light green color, drawings of fruits, and the location of the F.D.A mark which gives an overall similar feeling with the injured party's label. Since the regular buyers who purchase this product in question at the stores do not pay close attention to the package label because it is an inexpensive product, and even though the defendant's label contains the company name "Seron" on the label (Since the letter "Seron" is comparatively smaller than other fonts and it is written next to the description of the product, it is not conspicuous), the two products have a high probability of causing confusion among buyers and are, therefore, similar to each other.
Furthermore, taking into consideration that the injured party's product is well and widely known, the similarity in the brand label, the overlapping customer base, the competition among the two parties, and the defendant's intended use, it seems the defendant's act of manufacturing and selling their product in a similar package falls under the behavior that causes confusion among the buyers about the identity of the two products.
Therefore, the defendant's use of the product label should be seen as a violation of the Unfair Competition Prevention Act.
The original ruling that the defendant is innocent because the defendant and the injured party's product is not similar and does not cause confusion is a reversible error in matters of law as to the violation of the Subparagraph (Ga) of Item 1 of Article 2 of the former Unfair Competition Prevention Act regarding product label similarity and confusion among products. The ground for appeal to point this out is justified.
4. Therefore, the judgment of the court below shall be reversed, and this case shall be remanded to the court below. This decision is delivered with the assent of all Justices who reviewed the appeal as per Disposition.
Justices Suh Sung (Presiding Justice)
Yoo Ji-dam
Bae Ki-won (Justice in charge)
Park Jae-yoon
- This is a legal document in the public domain according to Korean Copyright Law.
