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Newsletter | February 2014, Issue 1
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INTELLECTUAL PROPERTY |
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Local Public Recognition of Trademark No Longer Required to Defeat Cybersquatters |
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After a lengthy dispute spanning over more than four years, Kim & Chang was successful in obtaining a Supreme Court ruling that foreign companies are not required to prove the local public recognition of their trademark within Korea to recover a domain name comprised of or including their trademark (Case No. 2011da57661, decided on September 12, 2013).
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Cybersquatters utilize the first mover’s advantage to register domain names in bad faith. As part of an effort to regulate cybersquatting in Korea, Article 12 of the Internet Address Resource Act (“IARA”) allows a legitimate right holder to file a petition to the court for the de-registration or transfer of a domain name that was registered and used in bad faith, such as for the purposes of impeding the legitimate right holder’s own domain name registration or to gain unjust profits. Until now, the Korean courts did not provide any clear guidance on whether foreign companies that own publicly recognizable trademarks in their home countries, but not in Korea, may avail themselves of this particular provision.
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This specific case involved the Varsity Spirit Corporation, the owner of the NCA mark in the U.S., which is also an abbreviation for the “National Cheerleaders Association.” The Varsity Spirit Corporation did not own any trademark registrations in Korea and the mark did not have any local recognition. An action was filed to recover the domain name from an individual that had registered the subject domain name after the mark NCA was registered in the U.S. The registrant was also operating a website under the domain name in bad faith, such as selling cheerleading related apparel and products, and providing links to competitors of Varsity Spirit Corporation.
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The registrant insisted that Varsity Spirit Corporation was not a “legitimate right holder” according to Article 12 of the IARA because the mark NCA did not have any public recognition in Korea. However, the courts rejected the registrant’s argument and reviewed the totality of the circumstances, such as the public recognition of the mark NCA in the U.S., especially in connection with cheerleading apparel.
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In the final appeal, the Supreme Court specifically stated that local public recognition of the subject mark was not required under Article 12 of the IARA, and thus issuing a noteworthy ruling that clarified the ambiguities of past decisions.
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