WIPO Lex

Supreme Court en banc Decision 2015Hu1454 Decided June 21, 2018【Denial Adjudication (Trademark)】

【Main Issues and Holdings】

[1] Whether trademark registration is obtainable in cases where the combination of a conspicuous geographical name and the word “university” results in either the creation of a novel concept beyond the original conspicuous geographical name or the development of a new distinctive character (affirmative)

Whether such combination alone may be deemed as undoubtedly having created a novel concept or a new distinctive character (negative)

[2] Whether a lawsuit seeking the registration, nullification, revocation, etc. of a trademark falls under the jurisdiction .of a court in the country where the trademark has been registered or the country where its registration has been applied (affirmative), and the governing law relating thereto (held: the law of the country where the trademark has been registered or the country where its registration has been applied)

【Summary of Decision】

[1] [Majority Opinion] A trademark or a service mark (hereinafter simply referred to as “trademark”) consisting solely of a conspicuous geographical name, the abbreviation thereof, or a map may not be eligible for registration (see Article 6(1)4 of the former Trademark Act (wholly amended by Act No. 14033, Feb. 29, 2016; hereafter the same); Article 33(1)4 of the current Trademark Act stipulates to the same effect). Inasmuch as the distinctiveness of such trademark cannot be acknowledged due to its remarkability and well-knownness, the aforementioned Article purports to refrain from granting exclusive license to only a specific individual. In that context, this legal doctrine is likewise applicable to a trademark that combines a conspicuous geographical name, etc. and a mark with no distinctive character. However, trademark registration is obtainable where such combination results in either the creation of a novel concept beyond the original conspicuous geographical name or the development of a new distinctive character. Given that there is a wide range of instances where combining a conspicuous geographical name and a non-distinctive mark newly forms a concept or distinctiveness, whether such concept or distinctiveness is newly developed ought to be determined individually on a case-by-case basis.

This legal doctrine holds true for a trademark that combines a conspicuous geographical name and the word “university.” That said, trademark registration may be granted in the event that such combination results in the formation of a novel concept beyond the original conspicuous geographical name or a new distinctive character. In this case, the foregoing combination of a conspicuous geographical name and the word “university” alone cannot be deemed as having undoubtedly created a novel concept or developed a new distinctive character.

[Concurring Opinion by Justice Ko Young-han, Justice Kim Chang-suk, Justice Kim Shin, and Justice Cho Jae-youn] Unlike cases where trademark registration is exceptionally granted pursuant to Article 6(2) of the former Trademark Act, if a trademark that merely combines a conspicuous geographical name and the word “university” is deemed to possess an “inherent distinctiveness” beyond the original conspicuous geographical name, then there is no need to examine whether it constitutes “where such trademark is recognizable to general 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,” and trademark registration may be granted limited to the goods on which such trademark is used.

Notwithstanding that general consumers may not be able to infer that a combined trademark consisting of a geographical name and the word “university” refers to the name of a particular university, the composition of said trademark itself is sufficient for general consumers to regard it as representing a specific university, not a university located in a certain region.

Therefore, the composition of a trademark per se can be deemed as possessing an “inherent distinctiveness” resulting from the combination of a geographical name and the word “university.”

Moreover, in cases where a trademark represents the name of a particular university through combining a geographical name and the word “university,” those other than the person operating said university does not necessarily have to use the name. Nor are there extenuating circumstances to deem that granting such person exclusive right to use the name of the university might lead to unfair outcomes or negative impacts from a public interest perspective. Accordingly, granting registration of such trademark cannot be deemed as contradicting the legislative purport of Article 6(1)4 of the former Trademark Act but rather deemed as being in accord with the same.

Ultimately, in the event that a trademark combining a geographical name and the word “university” is used as the name of an actual university and the person operating said university applies for trademark registration of the same, a concept or a distinctive character can be deemed as having been newly developed as a result of the aforementioned combination, thereby not falling under Article 6(1)4 of the former Trademark Act.

[Concurring Opinion by Justice Jo Hee-de] If a trademark that combines a conspicuous geographical name and the word “university” has been applied for registration with college education, teaching, etc. as the designated services, such trademark is deemed to manifest an inherent distinctiveness sufficient for obtaining trademark registration. Thus, it is tenable to deem that said trademark does not fall under Article 6(1)4 of the former Trademark Act.

If the combined trademark, supra, has been applied for registration as a trademark in a field irrelevant to the university’s designated business, distinctiveness is difficult to acknowledge inasmuch as the trademark itself still encompasses the original geographical meaning; furthermore, trademark registration ought to be granted in exceptional cases where such trademark is recognizable to general consumers as a trademark indicating the source of goods of a specific person.

As can be seen, the requirements and basis for recognition of distinctiveness regarding the name of a university vary depending on the type of designated goods and scope of use. Therefore, without taking into consideration the type of designated goods and scope of use, deeming a trademark that combines a geographical name and the word “university” to possess an inherent distinctiveness based solely on its composition is difficult.

[2] A trademark right is acquired according to the law of the country where the trademark has been registered. As such, a lawsuit seeking the registration, nullification, revocation, etc. of a trademark generally falls under the jurisdiction of a court situated in the country where the trademark has been registered or the country where its registration has been applied. Moreover, the governing law relating thereto ought to be deemed as the law of the country where the trademark has been registered or the country where its registration has been applied.

[3] In the case where Party A, who operates AMERICAN UNIVERSITY located in Washington D.C. (U.S.A.), applied for the registration of the pending service mark “ ” with “university education, teaching, etc.” as its designated services, but the Korean Intellectual Property Office (KIPO) rendered an adjudication denying registration on the ground that it falls under Article 6(1) Subparags. 4 and 7 of the former Trademark Act (wholly amended by Act No. 14033, Feb. 29, 2016; hereafter the same), the Court held that: (a) in light of the instant university’s history, its number of students and facilities, the reputation of the university domestically and internationally, the number of times “AMERICAN UNIVERSITY” has been searched on portal sites, etc.; (b) the pending service mark can be deemed to be widely known among general consumers, such as students preparing to study in the United States, as the name of Party A’s university relating to its designated services including university education; (c) accordingly, the combination of a conspicuous geographical name “AMERICAN” and a descriptive mark “UNIVERSITY” resulted in the creation of a novel concept and the development of a new distinctive character; and (d) thus, the pending service mark in its entirety does not fall under Article 6 Subparags. 4 and 7 of the former Trademark Act.

【Reference Provisions】[1] Articles 11(1), 15, and 23 of the Constitution of the Republic of Korea; Article 6(1)4 and (2) of the former Trademark Act (Wholly amended by Act No. 14033, Feb. 29, 2016; see current Article 33(1)4 and (2)); Article 33(1)4 of the Trademark act / [2] Article 2 of the Act on International Private Law / [3] Article 6(1)4 and 7 of the former Trademark Act (Wholly amended by Act No. 14033, Feb. 29, 2016; see current Article 33(1)4 and 7)

Article 11 of the Constitution of the Republic of Korea

(1) All citizens shall be equal before the law, and there shall be no discrimination in political, economic, social or cultural life on account of sex, religion or social status.

Article 15 of the Constitution of the Republic of Korea

All citizens shall enjoy freedom of occupation.

Article 23 of the Constitution of the Republic of Korea

(1) The right of property of all citizens shall be guaranteed. The contents and limitations thereof shall be determined by Act.

(2) The exercise of property rights shall conform to the public welfare.

(3) Expropriation, use or restriction of private property from public necessity and compensation therefor shall be governed by Act: Provided, That in such a case, just compensation shall be paid.

Article 6 of the former Trademark Act (Requirements for Trademark Registration)

(1) Trademark registration may be obtained, excluding the following trademarks:

4. A trademark consisting solely of a conspicuous geographical name, the abbreviation thereof, or a map;

7. In addition to trademarks under subparagraphs 1 through 6, a trademark which is unrecognizable for consumers to identify which goods related to whose business it indicates.

(2) Even if a trademark falls under any of paragraph (1)3 through 6, where 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, trademark registration may be granted limited to the goods on which such trademark is used.

Article 2 of the Act on International Private Law (International Jurisdiction)

(1) In case a party or a case in dispute is substantively related to the Republic of Korea, a court shall have the international jurisdiction. In this case, the court shall obey reasonable principles, compatible to the ideology of the allocation of international jurisdiction, in judging the existence of the substantive relations.

(2) A court shall judge whether or not it has the international jurisdiction in the light of jurisdictional provisions of domestic laws and shall take a full consideration of the unique nature of international jurisdiction in the light of the purport of the provision of paragraph (1).

【Reference Cases】[1] Supreme Court Decisions 2011Hu958 decided Dec. 13, 2012 (Gong2013
Sang, 193); 2017Hu1342 decided Feb. 13, 2018 (Gong2018Sang, 584) / [2] Supreme Court Decision 2009Da19093 decided Apr. 28, 2011 (Gong2011Sang, 1007)

【Plaintiff-Appellee】American University (Law Firm Haneol, Attorneys Baek Yoon-jae et al., Counsel for the plaintiff-appellee)

【Defendant-Appellant】Commissioner of the Korean Intellectual Property Office (KIPO)

【Judgment of the court below】Patent Court Decision 2015Heo642 decided July 24, 2015

【Disposition】The final appeal is dismissed. The cost of the final appeal is assessed against the Defendant.

【Reasoning】The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. A. A trademark or a service mark (hereinafter simply referred to as “trademark”) consisting solely of a conspicuous geographical name, the abbreviation thereof, or a map may not be eligible for registration (see Article 6(1)4 of the former Trademark Act (wholly amended by Act No. 14033, Feb. 29, 2016; hereafter the same); Article 33(1)4 of the current Trademark Act stipulates to the same effect). Inasmuch as the distinctiveness of such trademark cannot be acknowledged due to its remarkability and well-knownness, the aforementioned Article purports to refrain from granting exclusive license to only a specific individual. In that context, this legal doctrine is likewise applicable to a trademark that combines a conspicuous geographical name, etc. and a mark with no distinctive character. However, trademark registration is obtainable where such combination results in either the creation of a novel concept beyond the original conspicuous geographical name or the development of a new distinctive character (see, e.g., Supreme Court Decision 2011Hu958, Dec. 13, 2012). Given that there is a wide range of instances where combining a conspicuous geographical name and a non-distinctive mark newly forms a concept or distinctiveness, whether such concept or distinctiveness is newly developed ought to be determined individually on a case-by-case basis.

In Supreme Court Decision 2014Hu2283 Decided January 29, 2015, the Court, based on the foregoing legal doctrine, upheld the lower judgment determining that the trademark “ ” did not fall under Article 6(1)4 of the former Trademark Act on the ground that the pertinent trademark combining a conspicuous geographical name “Seoul” and the word “university” did not simply refer to a “university located in Seoul” but instead, created a novel concept meaning a “national university situated in Gwanak-gu, Seoul.” Citing such reasoning of the lower judgment, the Supreme Court held that there was no misapprehension of the legal principle regarding Article 6(1)4 of the former Trademark Act. In short, there is no reason to overrule the Decision supra.

B. A trademark right is acquired according to the law of the country where the trademark has been registered. As such, a lawsuit seeking the registration, nullification, revocation, etc. of a trademark generally falls under the jurisdiction of a court situated in the country where the trademark has been registered or the country where its registration has been applied (see, e.g., Supreme Court Decision 2009Da19093, Apr. 28, 2011). Moreover, the governing law relating thereto ought to be deemed as the law of the country where the trademark has been registered or the country where its registration has been applied. Accordingly, notwithstanding that the Plaintiff is an American corporation, insofar as the Plaintiff applied for registration of the instant service mark in the Republic of Korea so as to use the same therein, the Trademark Act of Korea shall be the governing law relating to the legality of such application for registration.

2. A. We examine as below in light of the above legal principle and the record.

(1) The Plaintiff applied for the registration of the pending service mark (application number omitted) “ ” with “university education, teaching, etc.” as its designated services. Inasmuch as general consumers can easily draw the name America from “AMERICAN” in the service mark, it constitutes a conspicuous geographical name. “UNIVERSITY” in the service mark constitutes a descriptive mark in relation to the aforementioned designated services.

(2) The pending service mark is also the name of the university that the Plaintiff operates (hereinafter “University”). Located in Washington D.C. (U.S.A.), the University was established in 1893 and has since been using “AMERICAN UNIVERSITY” as the school name for more than 120 years.

(3) The University offers more than fifty (50) bachelor’s degree and master’s degree programs and more than ten (10) doctoral degree programs, and operates such auxiliary facilities as a library, museum, art museum, broadcasting station, Center for Asian Studies, and World Peace Center. There are roughly 10,000 students enrolled in the University and the number is steadily increasing each year (of note, 123 Korean students enrolled during the period from 2008 to 2009). The University also provides overseas study programs in partnership with Ewha Woman’s University, Sogang University, and Yonsei University, and offers a combined degree program in partnership with Sookmyung Women’s University and Korea University.

(4) From 2003 to 2012, the University spent over USD 18,150,000 each year on advertising costs, and the number of visitors to its website (www.american.edu) stood at roughly 8,500,000 visitors in 2012. In 2013, U.S News & World Report ranked it 77th on its list of best universities in the United States. In particular, the University has been viewed by several media outlets as one of the top universities thanks to its international affairs program.

(5) Typing “AMERICAN UNIVERSITY” on the portal site NAVER (www.naver.com) showed the following search results (as of June 17, 2013): 59,761 blog hits, 22,770 café hits, and 5,876 “Knowledge iN” hits. Online searches mostly related to the University, reflecting that many interested in studying abroad search “AMERICAN UNIVERSITY” online to gather relevant information.

(6) In light of the University’s history, its number of students and facilities, the reputation of the University domestically and internationally, the number of times “AMERICAN UNIVERSITY” is searched on portal sites, etc., the pending service mark can be deemed as recognizable among users, such as students preparing to study in the United States, as the name of the Plaintiff’s University in relation to the designated services, i.e., university education and teaching.

(7) Therefore, the pending service mark does not fall under the purview of Article 6(1) Subparags. 4 and 7 of the former Trademark Act, inasmuch as a novel concept and a new distinctive character regarding the designated services as seen above is manifest in the service mark in its entirety resulting from the combination of a conspicuous geographical name “AMERICAN” and a descriptive mark “UNIVERSITY.”

B. While there are inadequacies in the reasoning of the lower judgment, the lower court is justified in having found that the pending service mark may be granted registration as a trademark related to its designated services. In so determining, as otherwise alleged in the grounds of appeal, the lower court did not err and adversely affect the conclusion of the judgment by misapprehending the legal doctrine on Article 6(1) Subparags. 4 and 7 of the former Trademark Act.

3. Therefore, the final appeal is dismissed, and the cost of the final appeal is to be borne by the losing party. It is so decided as per Disposition by the assent of all participating Justices with a concurrence by Justice Ko Young-han, Justice Kim Chang-suk, Justice Kim Shin, and Justice Cho Jae-youn; a second concurrence by Justice Cho Jae-youn; an Opinion concurring with the Majority Opinion by Justice Kim So-young, Justice Park Sang-ok, Justice Kim Jae-hyung, and Justice Park Jung-hwa; and an Opinion by Justice Kim Chang-suk regarding the Concurring Opinion by Justice Ko Young-han, Justice Kim Chang-suk, Justice Kim Shin, and Justice Cho Jae-youn.

4. Concurring Opinion by Justice Ko Young-han, Justice Kim Chang-suk, Justice Kim Shin, and Justice Cho Jae-youn

A. (1) Article 6(1)4 of the former Trademark Act provides that registration shall not be granted to a trademark consisting solely of a conspicuous geographical name. That being said, the conclusion to the effect that registration of a trademark combining a conspicuous geographical name and a non-distinctive mark is not obtainable cannot be derived as a matter of course from the language of the aforementioned statutory provision.

According to the established precedent (Supreme Court Decision 2014Hu2283, supra), in cases where a trademark combines a conspicuous geographical name and a non-distinctive mark, such trademark cannot be granted registration as a matter principle barring exceptional circumstances, i.e., where such combination results in the formation of a novel concept beyond the original conspicuous geographical name or the development of a new distinctive character.

Therefore, whether a trademark that combines a conspicuous geographical name and the word “university” is eligible for trademark registration depends on whether the trademark manifests either a novel concept beyond the original conspicuous geographical name or a new distinctive character resulting from such combination.

(2) As seen earlier, the Majority Opinion is premised on such standard for determination; on the other hand, in determining whether registration may be granted to a trademark combining a conspicuous geographical name and the word “university,” the Majority appears to have not factored in whether a novel concept beyond the original conspicuous geographical name or a new distinctive character is manifest in such trademark resulting from the aforementioned combination. Rather, the Majority examined as to whether the pending service mark can be deemed as being widely known among general consumers as the name of the Plaintiff’s University regarding its designated services such as university education and, based thereof, concluded that Article 6(1)4 of the former Trademark Act was inapplicable.

However, as the standard for determination that is not subject to Article 6(1)4, “distinctiveness” encompasses the meaning of whether the composition of a trademark itself possesses a new distinctive character as a result of combining a conspicuous geographical name and a non-distinctive mark, not whether such trademark is recognizable to general consumers as a trademark indicating the source of goods of a specific person as a result of using the trademark. In short, distinctiveness of a trademark’s composition, which serves as the criteria for determining whether such trademark constitutes Article 6(1)4 of the former Trademark Act, refers to an “inherent distinctiveness” of the trademark itself and is clearly distinguishable from “distinctiveness as a result of use” as prescribed by Paragraph (2) of the same Article. The Majority Opinion appears to be confusing the two concepts.

(3) Article 6(2) of the former Trademark Act grants trademark registration upon recognition of “distinctiveness as a result of use” by stipulating, “Even if a trademark falls under paragraph (1)4, where 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, trademark registration may be granted limited to the goods on which such trademark is used.” As stated in the Majority, if the pending service mark were to be deemed as possessing distinctiveness upon being widely known among general consumers as the name of the Plaintiff’s University in relation to its designated services, it would be construed as having “distinctiveness as a result of use” under Article 6(2) of the same Act. In that context, it would be natural to arrive at the conclusion that trademark registration may be granted “limited to the goods on which such trademark is used.”

As can be seen, the Majority Opinion acknowledges the legal effect of Article 6(2) of the former Trademark Act on the premise of meeting the requirements prescribed thereunder but, at the same time, asserts that Article 6(1) Subparag. 4 of the same Act is inapplicable on the same premise. This poses a paradox that remains inexplicable as long as Article 6(2) provides separate requirements for registration and not exclusionary requirements. By compounding the standard for determining “distinctiveness as a result of use” with the standard for determining “inherent distinctiveness on the composition of a trademark itself,” the Majority has blurred the boundary between the two statutory provisions that differ in terms of applicability and legal effect. Such construction leads to the conclusion that, in cases where “distinctiveness as a result of use” is recognized, trademark registration is obtainable according to both Paragraphs (1) and (2) under Article 6 of the former Trademark Act. This is not acceptable inasmuch as it obviously contravenes the language of Article 6(1) and (2). Moreover, insofar as “distinctiveness as a result of use” is applied as the standard for determination, the Majority’s standard for determination ― i.e., inherent distinctiveness as a result of combining a conspicuous geographical name and the word “university” ― would somehow become insignificant.

(4) Article 6(1)4 of the former Trademark Act pertains to “inherent distinctiveness,” and the existence or nonexistence of such distinctiveness ought to be objectively determined based on the composition of a trademark itself; meanwhile, matters regarding the status of a trademark’s use or the degree of recognition among general consumers as a result of such trademark use should factor in whether “distinctiveness as a result of use” exists as prescribed by Paragraph (2) of the same Article. So factoring would accord with the relevant statutory system. That is, Article 6 of the former Trademark Act should be construed as follows: (a) if a trademark is deemed to possess an “inherent distinctiveness” based on the trademark’s composition itself, Parag. (1)4 is inapplicable and trademark registration is thus granted, and (b) if a trademark falls under Parag. (1)4 on the ground of not having an “inherent distinctiveness” but, nonetheless, such trademark has become recognizable among general consumers as a trademark indicating the source of goods of a specific person as a result of using the trademark, then trademark registration is obtainable.

Therefore, unlike cases where trademark registration is exceptionally granted pursuant to Article 6(2) of the former Trademark Act, if a trademark that merely combines a conspicuous geographical name and the word “university” is deemed to possess an “inherent distinctiveness” beyond the original conspicuous geographical name, then there is no need to examine whether it constitutes “where such trademark is recognizable to general 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,” and trademark registration may be granted limited to the goods on which such trademark is used.

(5) We examine as to whether a trademark combining a conspicuous geographical name and a non-distinctive mark meaning “university” results in the formation of a novel concept beyond the original conspicuous geographical name or the development of a new distinctive character.

For example, so long as “Jeju University” actually exists, the relevant statute limits the use of the same name and the establishment of other universities using the same name. As can be seen, the combination of a conspicuous geographical name “Jeju” and the word “university” with no distinctive character results in the creation of a name that represents a specific university and general consumers as a matter of course regard the name to mean that specific university.

Also, cases where the name of a university combines a geographical name and the word “university” are commonly found at home and abroad. Thus, as to a trademark combining a geographical name and the word “university,” general consumers are far more likely to perceive such combined trademark that is inseparable in its entirety as representing the name of a specific university or indicating the source of goods of a specific person rather than manifesting a geographical name.

In short, notwithstanding that general consumers may not be able to infer that a combined trademark consisting of a geographical name and the word “university” refers to the name of a particular university, the composition of said trademark itself is sufficient for general consumers to regard it as representing a specific university, not a university located in a certain region.

Therefore, the composition of a trademark per se can be deemed as possessing an “inherent distinctiveness” resulting from the combination of a geographical name and the word “university.”

B. Article 6(1)4 of the former Trademark Act provides that “a trademark consisting solely of a conspicuous geographical name, the abbreviation thereof, or a map” may not be granted trademark registration. However, the statutory provision purports to refrain from granting exclusive license to only a specific individual inasmuch as the distinctiveness of such trademark cannot be acknowledged due to its remarkability and well-knownness.

Therefore, it is safe to say that trademarks consisting of a conspicuous geographical name are “sufficiently inherently adapted to distinguish” even when granting exclusive license to a specific person; moreover, where there is very little need to guarantee a competitor’s right to use without limit, construing that such trademarks do not fall under the purview of Article 6(1)4 of the former Trademark Act does not contravene the legislative purport of the same.

Rigid statutory laws are applied in relation to the establishment and operation of universities, namely, meeting particular requirements for facilities and equipment, etc. and obtaining a license from the Ministry of Education, thereby proscribing de facto the existence or establishment of universities using identical names.

C. (1) The Majority Opinion determined as to whether a trademark combining a geographical name and the word “university” may be granted trademark registration on the basis of the extent to which the specific university using said trademark as its school name are known to general consumers.

However, the above determination standard may lead to inappropriate outcomes given that eligibility for trademark registration varies depending on the degree of recognition. Also, notwithstanding that the University is well known abroad, denial of trademark registration on the ground that the same is not known among general consumers in Korea may bring forth issues relating to equity among domestic and foreign universities.

Furthermore, noticeable discrimination related to trademark registration may arise between domestic universities, i.e., a university using a name that includes a geographical name and a university using a name that does not. In other words, names of universities that do not consist of a geographical name are immediately granted trademark registration unless there exist other grounds for denial while registration is not granted for names of universities that include a geographical name until said name is widely known among general consumers as a result of its use on designated goods. In addition, regarding the scope of goods to which trademark registration is granted, registration is relatively easy to obtain without restriction for universities using a name that does not include a geographical name while universities using a name consisting of a geographical name are granted trademark registration only with respect to goods that have acquired recognition as a result of using said name.

Transcending mere unfair treatment, such discrimination is susceptible to contravening the principle of equality. Article 11(1) of the Constitution prohibits arbitrary discrimination against matters that are inherently the same in nature, that is, it proscribes discrimination without any reasonable basis when applying laws (see, e.g., Supreme Court en banc Decision 2005Du14417, Oct. 29, 2007; Supreme Court Decision 2013Du14863, May 24, 2016).

In view of the essential trademark function, i.e., indication or identification of the source of goods, deeming the existence of an inherent difference between the names of universities that include or do not include a geographical name is difficult. Yet, following the above Majority’s logic gives rise to an apparent discrimination between universities in terms of granting trademark registration and setting the boundary of goods on which trademarks are registrable. Such construction transgresses the principle of equality inasmuch as neither reasonable basis nor ground exists to justify such discriminatory treatment.

(2) Moreover, citing Article 6(1)4 of the former Trademark Act as the ground for denying registration of a trademark that combines a geographical name and the word “university” is susceptible to contradicting Article 15 (freedom of occupation) and Article 23 (right of property) of the Constitution.

One of the ways that product makers run their business is selling goods with a trademark of choice for which registration was granted. An exclusive trademark license constitutes a property right guaranteed under the Constitution.

The legislative purpose of Article 6(1)4 of the former Trademark Act is to refrain from granting exclusive license of a trademark to only a specific individual inasmuch as the distinctiveness of such trademark cannot be acknowledged due to remarkability and well-knownness. Yet as seen earlier, in cases where a trademark represents the name of a particular university through combining a geographical name and the word “university,” those other than the person operating said university do not necessarily have to use the name. Nor are there extenuating circumstances to deem that granting such person exclusive right to use the name of the university might lead to unfair outcomes or negative impacts from a public interest perspective. Accordingly, granting registration of such trademark cannot be deemed as contradicting the legislative purport of Article 6(1)4 of the former Trademark Act.

Therefore, denying registration of such combined trademark on the ground that it does not fall under Article 6(1)4 of the same Act is deemed to be an infringement of the applicant’s freedom of occupation and the right of property without any reasonable cause rather than conforming to the legislative intent of the aforementioned statutory provision.

(3) If the multifaceted nature of a statutory provision opens the door for diversity as to its interpretation, a statutory construction compatible with the Constitution ought to be considered for the purpose of establishing a uniform legal order in which the Constitution serves as the supreme law, not to mention avoiding unconstitutional consequences (see, e.g., Supreme Court Decisions 2004Do7488, Jan. 27, 2005; 2008Do6693, Apr. 14, 2011).

As the Majority holds, if a trademark combining a geographical name and the word “university” is deemed to fall under in principle Article 6(1)4 of the former Trademark Act but, on the other hand, construed as not falling under the same Article under exigent circumstances, i.e., where a specific university using such trademark as its name is widely known among general consumers, such interpretation might be susceptible to contravening the principle of equality or infringing the freedom of occupation and the right of property, all of which are safeguarded under the Constitution.

Conversely, if such combined trademark is construed as not falling under the purview of Article 6(1)4 by deeming a novel concept or a new distinctive character to have been created solely based on the composition of the trademark itself, unconstitutional consequences arising from the Majority’s logic is avoidable and thus accords with the doctrine of constitutional interpretation of law. The purpose of statutory construction is to realize legislative intent within the bounds of constitutional interpretation but the Majority Opinion appears to have overlooked this point.

(4) Nowadays, universities are pursuing a wide array of lucrative projects through expanding industry-university collaboration rather than simply performing the traditional role as the sanctuary of learning. For those operating universities, there is greater need to obtain trademark registration relevant to fields other than its designated business scope. Against such background, the number of university names being applied for registration as a trademark is increasing.

Nevertheless, a perfunctory and mechanical interpretation of Article 6(1)4 of the former Trademark Actdenies, without any reasonable basis, equal legal protection between those universities using a geographical name and those that do not. Moreover, if infringement of a trademark applicant’s freedom of occupation and the right of property is left unattended, not only would this deviate from the current state of demand but also constitute incongruous statutory interpretation.

D. (1) With the exception of Korea and China, most countries allow the registration of geographical names as a trademark. That being the case, Article 6(1)4 of the former Trademark Act is an extraordinary statutory provision from the standpoint of comparative law.

In most countries around the world, trademark registration is not denied solely on the ground that the pertinent trademark consists of a geographical name. In fact, the pending service mark of the instant case was granted registration as either a trademark or a service mark in several countries, such as Kuwait, Vietnam, Japan, Brazil, Uruguay, U.K. and other European nations. Furthermore, the pending service mark obtained registration even in China where registration is impermissible if a trademark includes a geographical name as is the same in Korea.

Determination of whether a trademark or a service mark is eligible for registration can vary depending on the legal system, etc. of each country; on the other hand, relevant statutes need to be construed to the extent that they are compatible with the laws of other countries. In short, Korea being the only country to not allow registration via a perfunctory and mechanical construction of relevant statutory provisions (such as Article 6(1)4 of the former Trademark Act) is undesirable as it further separates Korea from the international norm or otherwise causes it to fall behind the global trend of harmonization and unification of trademark laws.

(2) As to Article 6(1)4 of the former Trademark Act that prescribes a trademark solely comprised of a conspicuous geographical name as a single trademark with no distinctive character, the need to delete said provision has been potently raised from a legislative viewpoint.

However, it is undeniable that in Korea, trademarks consisting of geographical names are substantial in number and there remain many fields where conspicuous geographical names are usable without restriction.

In view of these circumstances, rather than repealing Article 6(1)4, an alternative may be the application and construance of said provision in accordance with the legislative purpose, that is, excluding trademarks that are sufficiently inherently adapted to distinguish (such as university names) from trademarks prescribed under Article 6(1)4, supra.

(3) The above doctrine may bring forth the likelihood of infinitely expanding the applicable scope to encompass names representing newspaper and broadcasting companies, banks, etc.

However, whether a trademark consisting of a conspicuous geographical name is deemed as not falling under Article 6(1)4 of the former Trademark Act ought to be individually examined on a case-by-case basis by comprehensively factoring in the following: whether it is permissible to grant exclusive license to a specific person given that the granting of licenses is limited by law and whether general consumers are likely to perceive a trademark comprised of elements that are inseparable as indicating the source of goods of a specific person.

This approach consequentially increases the number of instances where such trademarks do not fall under the purview of Article 6(1)4 of the former Trademark Act, thereby curbing concerns of causing confusion in practice.

E. Meanwhile, in view of the aforementioned statutory provision, exclusive license to use such combined trademark as the name of a university may be granted only to the person operating the university. That said, it is tenable to construe that a trademark combining a geographical name and the word “university” should represent an actually existing university, and that trademark registration is granted only in cases where application has been filed by the person operating the pertinent university.

F. We examine as below in light of the above legal principle and the record.

The pending service mark “AMERICAN UNIVERSITY” is also the name of the Plaintiff’s University located in Washington D.C. and has been used as the school name for over 120 years since its establishment in 1893.

Accordingly, inasmuch as the pending service mark that the Plaintiff applied for registration manifests a novel concept or a new distinctive character resulting from combining the conspicuous geographical name “AMERICAN” and the word “UNIVERSITY,” it does not constitute trademarks prescribed under Article 6(1) Subparags. 4 and 7 of the former Trademark Act.

While there are inadequacies in the reasoning of the lower judgment, the lower court is justified in having found that the pending service mark may be granted registration. In so determining, the lower court, contrary to what is alleged in the grounds of appeal, did not err and adversely affect the conclusion of the judgment by misapprehending the legal doctrine on Article 6(1) Subparags. 4 and 7 of the former Trademark Act.

G. As above, we agree with the Majority’s conclusion that the final appeal should be dismissed, but express our concurrence as we differ on the grounds for dismissal.

5. Concurring Opinion by Justice Jo Hee-de

A. In cases where the name of a university is used as a trademark in relation to the university’s designated services (namely, university education and teaching), general consumers tend to recognize the name as representing a specific university. Therefore, neither unfair outcomes nor negative impacts can be deemed to arise upon granting registration of such university name as a trademark. There is no reason to deem otherwise where a geographical name is included in the name of a university. Accordingly, if a trademark that combines a conspicuous geographical name and the word “university” has been applied for registration with college education, teaching, etc. as the designated services, such trademark is deemed to manifest an inherent distinctiveness sufficient for obtaining trademark registration. Thus, it is tenable to deem that said trademark does not fall under Article 6(1)4 of the former Trademark Act.

In today’s day and age, universities engage in diverse lucrative projects rather than merely performing the traditional role as the sanctuary of education. As such, the need may arise for those operating a university to obtain trademark registration relevant to fields other than its designated business areas. There is no basis that the name of a university itself is recognized among general consumers in connection to such fields as indicating the source of goods of a specific person. Given that universities are on equal footing with other ordinary trademark applicants in relation to such fields, they do not have the upper advantage in obtaining registration. Therefore, if the combined trademark, supra, has been applied for registration as a trademark in a field irrelevant to the university’s designated business, distinctiveness is difficult to acknowledge inasmuch as the trademark itself still encompasses the original geographical meaning; furthermore, trademark registration ought to be granted in exceptional cases where such trademark is recognizable to general consumers as a trademark indicating the source of goods of a specific person.

B. Article 7(1)3 of the former Trademark Act (Article 34(1)3 of the current Trademark Act stipulates to the same effect) provides that a third party may not obtain registration for “any trademark identical or similar to a famous mark, which is a mark indicating non-profit business or public service of a state, public organization, or any of its agencies and a non-profit corporation” and stipulates in a proviso clause under the same Paragraph that trademark registration may be obtained “where such state, etc. has applied for trademark registration of its mark.” That is, the granting of trademark registration varies depending on who the applicant is. The same is likewise stipulated in Paragraph (1)3 through 5 of the aforementioned Article.

Examination of the foregoing statutory provisions reveals that the Trademark Act only grants trademark registration to a limited scope of applicants from a public interest perspective. Hence, proscribing a third party from obtaining registration regarding university name without any legal basis but allowing the person operating a university to register the name as a trademark irrespective of the type of designated goods, etc. discords with the overall structure of the Trademark Act and thus is unacceptable.

C. The pending service mark that combines a conspicuous geographical name and the word “university” was applied for registration with university education, teaching, etc. as the designated services. Thus, the lower judgment holding that the pending service mark is eligible for registration as a trademark related to its designated services is sustainable.

6. Concurrence with the Majority Opinion by Justice Kim So-young, Justice Park Sang-ok, Justice Kim Jae-hyung, and Justice Park Jung-hwa

A. In the Concurring Opinion by Justice Ko Young-han, Justice Kim Chang-suk, Justice Kim Shin, and Justice Cho Jae-youn (hereinafter “First Concurrence”), citing the need to acknowledge inherent adaptation of university names when considering the legislative purport of Article 6(1)4 of the former Trademark Act, the Justices opine that, in extenuating cases where a trademark combining a geographical name and the word “university” is actually used as the name of a specific university and the person operating it applies for trademark registration of the name, such trademark is eligible for registration as it does not fall under the purview of Article 6(1)4 of the former Trademark Act.

However, we do not agree with the Majority’s interpretation inasmuch as inordinate emphasis is placed on the legislative purpose of Article 6(1)4 of the former Trademark Act to the point of exceeding the ordinary language of the overall statute and thus uniformly concluding that university names combining a conspicuous geographical name do not constitute trademarks prescribed thereunder, an argument that excessively narrows the applicable scope of the relevant statutory provision and causes disharmony with the entirety of the Trademark Act. Our reasoning is explicated infra.

(1) Article 6(1)4 of the former Trademark Act explicitly provides that trademark registration is not obtainable for a trademark solely consisting of a conspicuous geographical name. Also, the Supreme Court’s established position has been that the aforementioned statutory provision is not only applicable to trademarks solely consisting of a conspicuous geographical name but also to trademarks combining a conspicuous geographical name and a descriptive mark with no distinctive character so long as a novel concept beyond the original geographical name, indicated source, descriptive meaning, etc. or a new distinctive character is not manifest in the relevant trademark resulting from such combination. In short, whether a trademark combining a conspicuous geographical name and a non-descriptive mark falls under Article 6(1)4 of the former Trademark Act ought to be determined depending on whether a novel concept or a new distinctive character is developed as a result of such combination; moreover, the formation of such novel concept or distinctiveness is closely related to the level of recognition of a trademark among individual consumers. Therefore, it is tenable to regard a trademark combining a geographical name and the word “university” as a trademark indicating a new source depending on how well the trademark is known to general consumers even though inherent distinctiveness cannot be acknowledged based on the trademark’s composition itself, rather than as a trademark indicating the source of specific person.

Using the phrase “inherent distinctiveness,” the First Concurrence opines that, in cases where a trademark combines a conspicuous geographical name and the word “university,” a novel concept or a new distinctive character beyond the recognition of general consumers may be deemed as having been developed based on the composition of a trademark itself. However, the view presented is somewhat confusing since it may be understood as the trademark itself manifesting a novel concept or a new distinctive character without considering the recognition of general consumers.

If the First Concurrence were to have used the phrase “inherent distinctiveness” to refer to trademarks in which its meaning can be intuitively perceived, then any trademark (including university name) combining a conspicuous geographical name and a common descriptive word ought to be regarded as having acquired inherent distinctiveness. For example, “Danyang Private Institute” or “Youngweol Museum” can be deemed as having developed a new distinctive character resulting from the combination of a geographical name and a non-distinctive descriptive word beyond the original geographical name or the indication of a particular industry; thus, trademark registration should be obtainable based on the trademark itself regardless of the degree of recognition among general consumers. Yet, there is room to question whether such conclusion accords with the legislative purport of Article 6(1)4 of the former Trademark Act that proscribes registration of a conspicuous geographical name as a trademark.

(2) In view of the legislative purpose of Article 6(1)4 of the same Act (i.e., refrain from granting only a specific person exclusive license to use a conspicuous geographical name), the First Concurrence’s interpretation ― that is, granting trademark registration and exclusive right to use the name of a university with “sufficient inherent adaptation to distinguish” does not lead to negative outcomes ― does not contradict the aforementioned legislative purpose but rather accords thereto.

However, in construing Article 6(1)4 of the former Trademark Act, “inherent adaptation to distinguish” may be considered as an element but cannot be the solitary criterion. If determination is based solely on the same, it may bring about confusion in practice due to the applicable scope infinitely expanding to include names that consist of a conspicuous geographical name indicating a particular business with limited inherent adaptation to distinguish, such as newspaper and broadcasting companies, non-profit organizations, etc.

Furthermore, the name of a university is set and the person operates said university using that name according to the relevant statute prescribing the requirements for university establishment and operation. As such, it is impractical for universities to exist or to be established using an identical name. However, given that this is regulated under the aforementioned statute, it should not be considered in sync with granting trademark registration pursuant to the Trademark Act. A person operating a university neither has to apply for trademark registration related to its designated business scope nor face setbacks in operating it due to not having applied for trademark registration.

Therefore, in the event that a person operating a university seeks to apply for trademark registration if need arises, that person and general applicants ought to be equally treated. If a trademark combining a conspicuous geographical name and a non-distinctive mark were to be granted trademark registration on the sole basis that it is the name of a university, this would equate to discriminatory treatment against general applicants.

(3) As indicated in the First Concurrence, regarding a trademark that combines a geographical name, if eligibility of trademark registration is determined based on the level of recognition among consumers as to the specific university using said trademark as its school name, this can blur the boundary with Article 6(2) of the former Trademark Act and may, in some cases, lead to unreasonable outcomes. Even so, this all originates from Article 6(1)4 of the same Act that does not in principle grant trademark registration for a conspicuous geographical name. Thus, insofar as the problem is unsolvable through legislative action, such undesirable outcome may have to be tolerated to some extent from an analytical perspective. Rather than taking a different interpretative approach on a case-by-case basis, as the Majority Opinion holds, determining the level of recognition among general consumers (a requirement for the creation of a novel concept or a new distinctive character) based on a more flexible approach while maintaining the same standard for determination is more in tune with the legislative purport of the foregoing statutory provision.

(4) The First Concurrence opines that, with respect to a trademark combining a geographical name and the word “university,” such trademark ought to be granted registration only if the pertinent university actually exists and the application has been filed by the person operating it on the ground that the trademark does not fall under the purview of Article 6(1)4 of the former Trademark Act.

Generally, however, the “distinctiveness” of a trademark as prescribed under each subparagraph of Article 6(1) of the former Trademark Act is objectively determined by considering the concept manifest in the trademark or its relationship with designated goods, and whether a novel concept or a new distinctive character is manifest in the trademark does not vary depending on who the applicant is. The First Concurrence presented “Chuncheon University” as an example but showed ambiguity in its explication. That is, it is unclear where the First Concurrence stands between the two positions: (i) a novel concept or a new distinctive character may be deemed as having been developed based solely on the composition of “Chuncheon University” itself, but trademark registration is not obtainable on the grounds that said university does not actually exist and that the applicant is not the person operating the same; or (ii) a novel concept or a new descriptive character may not be deemed as having been created on the same grounds. If falling under (i), it evidently contravenes Article 6(1)4 of the former Trademark Act that does not limit the scope of applicants (the Trademark Act has a separate provision limiting the scope of applicants, such as Article 7(1)3); however, if falling under (ii), it means that the distinctiveness of a trademark differs depending on the applicant. As such, the First Concurrence’s logic is devoid of consistency.

B. Inasmuch as the pending service mark “ ” is comprised solely of English words, the composition itself can be generally recognized as the combination of a geographical name and a descriptive work to mean either a “university in America” or a “university located in America.” If the pertinent university were not widely known among general consumers in Korea, there would be no basis to readily conclude that the pending service mark may be perceived among the same as either representing the name of a specific university or indicating the source of a specific person. In particular, the pending service mark uses the name of a country, not the name of a particular state or city, thereby broadening the geographical scope. Accordingly, general consumers are highly likely to recognize the pending service mark to represent a geographical meaning, such as a “university in America.” That being the case, in terms of inherent adaptation, there is greater need to guarantee a third party’s use of the same without limit.

For the pending service mark to be recognized as meaning the Plaintiff’s University, not the original geographical name, a more reasonable approach would be to follow the Majority Opinion’s interpretation according to which the pending service mark is deemed to manifest a novel concept or a new distinctive character based on the recognition among general consumers in Korea.

As above, we concur with the Majority Opinion.

7. Second Concurrence by Justice Kim Chang-suk as to the Concurring Opinion by Justice Ko Young-han, Justice Kim Chang-suk, Justice Kim Shin, and Justice Cho Jae-youn

Two aspects that were not mentioned in the First Concurrence are examined below.

A. Article 7(1)3 of the former Trademark Act provides that a third party may not obtain registration for “any trademark identical or similar to a famous mark, which is a mark indicating a non-profit business or public service of a state, public organization, or any of its agencies and a non-profit corporation” and stipulates in a proviso clause under the same Paragraph that trademark registration may be obtained “where such state, etc. has applied for trademark registration of its mark.” That is, the granting of trademark registration varies depending on who the applicant is, and the same is likewise stipulated in Subparags. 3, 4 and 5 of the aforementioned Paragraph (1).

According to the above provisions including Article 7(1)3, where a trademark itself represents a specific organization, etc. and thus possesses an “inherent distinctiveness,” a third party cannot obtain trademark registration of the same while registration is granted if an application is filed by the specific organization, etc. Ultimately, in cases where a trademark combining a conspicuous geographical name and the word “university” represents a specific university, “inherent distinctiveness” of the trademark itself is acknowledged and only the person operating the university can be granted trademark registration. This can serve as a valid legal basis to support the First Concurrence, given that Articles 6(1) and 7(1) both share the same legislative intent.

B. Whether “AMERICAN UNIVERSITY” was used as a trademark representing a specific university or meaning a “university in America,” or was used for purposes other than as a trademark can be relatively easily determined in light of the details surrounding the trademark’s use, etc.

If “AMERICAN UNIVERSITY” was used to represent a specific university, the pending service mark possesses “inherent distinctiveness” as mentioned above. In this case, a third party, other than the Plaintiff, cannot be deemed as being allowed unlimited use of the pending service mark. Moreover, the granting of permission to a third party to use the trademark may cause confusion among general consumers as to the source of goods using the same.

Contrary to the above, if a third party were to use the pending service mark to mean a “university in America” or for purposes other than as a trademark, it is evident that “AMERICAN UNIVERSITY” was not used as a trademark and thus does not fall within the scope of rights of the pending service mark. Therefore, there is no reason to deem that any issue may arise from such use.

As above, I express my concurrence to highlight the unreasonableness of the view presented by the Justices Concurring with the Majority Opinion.

Chief Justice Kim Myeongsu (Presiding Justice)

Justices Ko Young-han

Kim Chang-suk (Justice in charge)

Kim Shin

Kim So-young

Jo Hee-de

Kwon Soon-il

Park Sang-ok

Lee Ki-taik

Kim Jae-hyung

Cho Jae-youn

Park Jung-hwa

Min You-sook

Республика Корея

KR025-j

Supreme Court Decision, 2015Hu1454, dated June 21, 2018