On February 3, 2022, the National Assembly promulgated amendments to the Trademark Act that include expanding the definition of “use of a trademark” to cover the act of distributing digital goods bearing trademarks online (the “Amendment”).  The Amendment will go into effect on August 4, 2022.

The definition of “use” of a trademark is significant under the Trademark Act, since the Act grants a trademark owner the exclusive right to “use” a registered trademark, and at the same time, imposes liability, including compensation for damages on persons who “use” a trademark without permission from the trademark owner, as infringers of the trademark.  In addition, if the trademark owner fails to “use” a registered trademark for three years, he/she may be subject to having the registration of the trademark cancelled.

Prior to the Amendment, the Trademark Act specifically listed types of “use” of trademarks, including the transfer and delivery of goods bearing a trademark.  However, the statute described such transfer and delivery from the perspective of traditional distribution of goods, as follows: “An act of transferring or delivering goods or packages of goods bearing a trademark, or exhibiting, exporting or importing such goods for the purpose of transfer or delivery.”  As a result, it has been debated in legal circles whether the online distribution of digital goods (game programs, applications, e-books, etc.) constitutes a “use” of trademarks under the Trademark Act.

The Amendment revises the provision on types of trademark uses relating to the distribution of goods bearing trademarks as follows: “An act of transferring or delivering a product or a package of a product bearing a trademark, providing such product via a telecommunications network, or exhibiting, exporting or importing such product for such purpose.”  The revised statute clarifies that online distribution of digital products bearing a trademark constitutes “use” of a trademark, just as with offline distribution of products.

The Amendment removes any ambiguity regarding whether the use of a trademark online is within the exclusive scope of the trademark owner's rights.  Therefore, trademark owners are well-advised to closely monitor whether their trademarks are being infringed online in Korea, and sellers of digital products online should confirm whether their products may be using trademarks of other parties.