WIPO Lex

This is an informal case summary prepared for the purposes of facilitating exchange during the 2023 WIPO IP Judges Forum.

Session 8: Court Referred Mediation Mechanisms Available for Intellectual Property Disputes

Intellectual Property High Court of the Republic of Korea [2023]: Case No. 2022 Na 2367

Date of judgment: June 26, 2023
Issuing authority: Intellectual Property High Court of Korea, Twenty-Second Division
Level of the issuing authority: Appellate Instance
Type of procedure: Judicial (Civin( �br> Subject matter: Alternative Dispute Resolution (ADR); Trademarks; Enforcement of IP and Related Laws
Plaintiff: Park
Defendant: Kim
Keywords: Mediation, Conciliation, Decision in Lieu of Mediation, Trademark infringement

Basic facts: The dispute involved use of the below marks:

During their marriage, the plaintiff and defendant ran a retail shop for bags, wallets, shoes, female clothing, etc., using a trademark registered under the plaintiff’s name. The plaintiff initiated the trademark dispute upon the parties’ divorce.

The plaintiff, as the trademark holder, demanded that the defendant refrain from indicating, exhibiting, or publishing the registered trademark on any advertisements, internet websites, domain names, sign boards, or marks on services including internet shopping mall businesses, internet retail sales of bags and wallets, internet retail sales of female shoes, internet retail sales of female clothing, internet retail sales of female nail stickers, etc. He also claimed the equivalent of approximately 1 million US dollars in damages caused by the defendant’s use of the mark without his permission. The defendant argued that the trademark should belong to her, because she created and began using the mark. She contended that when the parties started the joint business, her then-husband, the plaintiff, registered the mark under his name without her consent. She continued to use the mark for her own business after the parties divorced.

The case was first heard by the Seoul Central District Court. The District Court found that the defendant had agreed to transfer her whole rights to the mark to the plaintiff (her then-husband) before registering the mark under his sole name. Therefore, the District Court ruled that the right to the trademark legally belongs to the plaintiff. The Court granted the plaintiff injunctive relief and damages of about 40,000 US dollars. On appeal to the Intellectual Property High Court, the plaintiff amended his claim, demanding that, in addition to not using the relevant marks for any of the designated services, the defendant pay the plaintiff approximately 300,000 US dollars per annum as damages until the termination of the contested acts.

The defendant appealed the District Court’s decision, demanding that the plaintiff’s claim should be dismissed in its entirety.

After having an oral argument at a hearing, each party agreed to proceed to the court-referred mediation process. The bench designated one judge of the panel as a mediator for the case. During the mediation, each party was able to understand each other’s position more clearly and sought diverse ways to settle, but the parties could not reach a final voluntary agreement. Thus, as a mediator, the judge issued a recommendation for each party through a Decision in Lieu of Mediation.

Decision: The defendant shall not use the marks for the prohibited services and shall pay the plaintiff a total of KRW 80 million (about 61,000 US dollars) in two installments. The defendant shall not use any of the plaintiff’s marks for any designated services. The plaintiff, upon receiving the above-mentioned money from the defendant, agreed to cancel the collateral of KRW 60 million (about 46,000 US dollars) deposited by the defendant with an officer of the Seoul Central District Court, as well as waive its right of appeal.

Neither party filed an appeal within two weeks of the date of service of the decision; thus, the decision has come to have the same effect as a settlement in a trial (i.e., the same effect as a final judgment).

Relevant holdings in relation to court referred mediation mechanisms available for intellectual property disputes: Under the terms of the above decision, the plaintiff shall no longer raise any further issues regarding the defendant’s use of the marks that occurred prior to the confirmation date of the decision, and the plaintiff shall waive the remaining claims in this case. Further, the plaintiff “does not wish to punish the defendant for the infringement of marks” in a case before the Seoul Central Prosecutor’s Office.

Relevant legislation:
Judicial Conciliation of Civil Disputes Act (Act No. 4202, 1990), available at
https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=52915&type=part&key=8

Practice Directions for Civil Appellate Trial in the Patent Court of Korea (2018), available at
https://patent.scourt.go.kr/dcboard/new/EngDcNewsViewAction.work?seqnum=13&gubun=547 &cbub_code=&scode_kname=%C6%AF%C7%E3%BF%B5%B9%AE- Announcements&searchWord=&pageIndex=1