[Patent Talk] Following the Trademark Act, the Unfair Competition Prevention Act Now Also Protects Prior Users of Marks

The amended Unfair Competition Prevention and Trade Secret Protection Act (the 'Unfair Competition Prevention Act'), which contains provisions protecting prior users of marks, was promulgated on March 28 and will take effect on September 29. KIPO has given the following example in connection with the amendment. Party A sold toys using Mark A without registering it with KIPO. Party B later sold toys using a mark similar to Mark A and, through TV advertising and social media promotion, became the top seller and well known. Party A then received a warning letter from Party B demanding that Party A stop using Mark A.

Because the previous Unfair Competition Prevention Act contained no provision protecting prior users, the courts did not recognize a prior-use right for Party A in cases like this. It was often pointed out that the law needed to be amended, as this was inconsistent with Article 99 of the Trademark Act, which recognizes and protects a prior-use right for prior users who have been using a mark in good faith. Under the amended Unfair Competition Prevention Act, therefore, a party who first used a mark in good faith will not be engaging in an act of unfair competition even if another party's later-used mark has become well known.

Accordingly, the issues concerning prior users of unregistered marks under the amended Unfair Competition Prevention Act can be summarized as follows. First, where the unregistered prior-used mark is not well known, a third party's application for a similar mark may be registered unless it was filed for an unfair purpose, but the prior user can be protected by the prior-use right under the Trademark Act. Even where the third party has not filed an application but its mark has become well known through use, the prior user can likewise be protected by the prior-use right under the Unfair Competition Prevention Act.

Next, where the unregistered prior-used mark is well known, a third party's application for a similar mark will be rejected because of the prior-used mark's reputation. On the contrary, the prior user can file and register its own mark, even belatedly. Meanwhile, where a third party uses a similar mark, the prior user...