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Newsletter | November 2015, Issue 3
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Intellectual Property
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Second Landmark Decision on Trade Dress Protection for a Store's General Appearance and Design
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At the end of 2014, in the so called “Softree case,” and in the first ruling of its kind, the Seoul Central District Court recognized that a shop’s general appearance and decorative elements are protectable trade dress under the Unfair Competition Prevention and Trade Secrets Act (“UCPA”)1. Kim & Chang successfully represented Softree in the case.
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On July 10, 2015, the same court rendered another decision confirming that a bakery shop’s general appearance (including the logo, outdoor signage, indoor layout) and other decorative elements are protectable trade dress under the UCPA2.
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Facts
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This case was brought by “Seoul Lovers,” premium bakery shop serving freshly baked sweet red bean pastries, against two former employees who had left Seoul Lovers and opened bakery shops imitating Seoul Lovers’ shop appearance and design concept.
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Under the “catch-all” provision of the UCPA Article 2(1)(x), Seoul Lovers sought a permanent injunction and damages against the defendant bakery on the grounds that its adoption of Seoul Lovers' shop appearance and design concept infringed on its trade dress.
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Seoul Lovers
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Defendant bakery
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Logo
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Outdoor Signage
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Indoor Layout & Design
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Court’s Decision
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The court recognized that the claimed trade dress is a product that the plaintiff (Seoul Lovers) produced through considerable effort and investment to make the bakery shop distinguishable from other existing bakeries, and that the defendant bakery’s free ride on the plaintiff’s goodwill constitutes a deceptive or wrongful business practice.
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Despite the difficulties in calculating actual damages incurred from the illegal copying of the trade dress, this case is particularly noteworthy in that the court awarded a substantial amount of compensation to the plaintiff. In calculating the actual damages, the court used as a basis, the defendant bakery’s entire sales revenue for the infringement period, and applied Seoul Lovers’ profit rate (not the defendant’s profit rate).
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Kim & Chang represented Seoul Lovers in this case, and obtained a favorable decision.
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UCPA Article 2(1)(x): A party shall not interfere with another person’s right to profit 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 commercial trade practice or competition order.
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