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Newsletter | April 2015, Issue 1
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Intellectual Property
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Landmark decision puts the freeze on copying ice cream shop's trade dress
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In the first Korean court ruling of its kind, the Seoul Central District Court recognized that a shop's general appearance and decorative elements can be protectable trade dress under the Unfair Competition Prevention and Trade Secrets Act ("UCPA").
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In the case of NUPL Co., Ltd. ("Softree") vs. Mcostar Co., Ltd. ("Milkcow"), Kim & Chang successfully represented the operator of a dessert café chain in its lawsuit against the franchisor of a similar chain for unfair competition on the basis that the latter was copying its signature soft ice cream dessert and the unique appearance of its cafés.
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The plaintiff Softree, a high end dessert café franchise in Korea, offers a signature dessert consisting of soft vanilla ice cream topped with real pieces of honeycomb and honey. The defendant Milkcow operates cafés which mimic the plaintiff's café concept and sells the same dessert with a similar presentation. Softree sought an injunction against Milkcow on the grounds that: (i) the latter's manufacture and sale of its honeycomb ice cream dessert infringed Softree's rights under the ‘dead copy’ provision of the UCPA (Article 2(1)(ix)), and (ii) its adoption of Softree's interior and exterior design components infringed Softree's trade dress under the ‘catch-all’ provision of the same Act (Article 2(1)(x)).
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SOFTREE
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MILKCOW
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The Court found in favor of Softree as to its ‘dead copy’ claim, noting that the ice cream dessert of Milkcow imitates the appearance of Softree's product (i.e., the product's shape, pattern, color, gloss, or a combination of these attributes) and granted a permanent injunction against Milkcow's manufacture and sale of its honeycomb desserts.
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The Court further found that Milkcow was using exterior signage, menu boards, ice cream cone rings, and a milk cow logo that looked very similar to Softree's, as well as identical displays of ice cream cones, and honeycombs. The Court ruled that these six components (compared in the following table) amounted to Softree’s trade dress as they give Softree cafés their unique atmosphere. In particular, the Court held that it was unjust for Milkcow to adopt for its business all of the above Softree shop design elements, which were conceived of and developed by Softree through substantial effort and investment. The Court granted a permanent injunction against Milkcow's use of the six Softree shop design components in combination.
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The UCPA's ‘catch-all’ provision was only recently introduced on January 31, 2014, and states that a party may not interfere with another person's economic interest by appropriating, for one's own business use without authorization, anything which the other person produced through considerable effort and investment, in a manner that contravenes fair trade practice or competition order. This broad provision is the only provision in the UCPA which proscribes general acts of unfair competition, and until this case, had never been interpreted by any Korean court. This case is significant as the first court decision in Korea to interpret the ‘catch-all’ provision of the UCPA, and specifically to recognize that that provision protects a store's substantial effort and investment in designing its ‘look and feel.’
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