Fishcake Restaurant case provides guidance on misleading marks in South Korea

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The South Korean patent court recently ruled that the Fishcake Restaurant trademark for a sausage stew delivery service should be invalidated, on the grounds that the trademark could mislead consumers into believing that the service delivered dishes containing fish cakes, which was not the case (patent court decision 2021Heo4003, November 4, 2021).

Since the Fishcake Restaurant is a famous trade name as the original South Korean style sausage stew restaurant called Budae Jjigaethis decision could have a significant impact in South Korea.

If The Cheesecake Factory, a famous restaurant chain based in the United States, sells products other than cheesecakes, could this trademark also be invalidated for the same reason in South Korea? Or what about Taco Bell selling food other than tacos, or Burger King selling more than burgers?

South Korea’s Supreme Court has previously ruled that Wendy’s Hamburger registered for ice cream, popcorn, pastries and hamburger buns is not a misleading trademark, as consumers would not confuse products designated as burgers upon seeing this mark (Supreme Court Decision 95Hu187, July 28, 1995).

However, according to the recent patent court ruling, The Cheesecake Factory selling dishes other than cheesecake can be considered misleading if consumers misunderstand the nature or quality of the products. It would therefore be interesting to examine this case in more detail.

context

Fishcake Restaurant (Odeng Sikdang in South Korean) is the name of a restaurant opened in the early 1960s by Grandma Gisuk Huh, who sold fishcake (odeng in South Korean), at a food stall in Uijeongbu, located north of Seoul, south Korea.

Grandma Gisuk Huh has been selling sausage and ham stews (Budae Jjigae) since she started her business, and this dish has become a staple on her menu. In his recipes, the sausage stew does not contain fishcake, but fishcake is served as a side dish.

Fishcake Restaurant has been in business for three generations and has been featured as the origin of South Korean-style sausage stew, Budae Jjigae, in cookbooks and various media such as KBS, SBS, MBC and major news publications. in South Korea.

As Fishcake Restaurant became famous for its sausage stew, several other sausage stew restaurants opened in the alley where Fishcake Restaurant is located, and this area was called Uijeongbu Budae Jjigae Alley.

Nullity action against Fishcake Restaurant

Grandmother Gisuk Huh registered her business name in 1968 and operated as a private company without registering her trademark with the South Korean Intellectual Property Office (KIPO) for many years.

Fishcake Restaurant Co Ltd was incorporated as a legal entity in 2009. Fishcake Restaurant and Grandma Gisuk Huh subsequently applied for and registered four trademarks Fishcake Restaurant in connection with restaurants and related goods and services in classes 29, 35, 39 and 43.

The brand specimen is shown, and is combined with the text Fishcake Restaurant, Grandma Gisuk Huh, Original, the first sausage stew in South Korea, since 1960, etc.

A competitor, Ms. Jeong, has operated a sausage stew restaurant near Fishcake Restaurant since around 2000. She changed her business name to Original Fishcake Restaurant in 2012.

Before changing its trade name, in 2008, it filed a trademark for Jeong Original Fishcake Uijeongbu Budae Jjigae Fish cake restaurant. She then brought actions for nullity against the four trademark registrations of Fishcake Restaurant.

KIPO’s Intellectual Property Trial and Appeal Board (IPTAB) denied the competitor’s claims because i) the mark is inherently distinctive as it is associated with unique things, such as Grandma Gisuk Huh, in addition to the Fishcake restaurant; (ii) the mark has acquired a secondary meaning through its long-term use; and iii) there is no risk of misunderstanding as to the nature of the products, since it is already widely known to consumers.

The competitor filed a reversal of the first instance decision with the Patent Court only for Class 39 sausage stew delivery services. The other first instance decisions were finalized without appeal.

Decision of the Patent Court

The Patent Court overturned the IPTAB decision and found that the Fishcake Restaurant brand was likely to cause confusion about the nature of the products, despite its notoriety.

The patent court held that since the fishcake is used as a food ingredient, the fishcake could be considered a term related to “food delivery services, including sausage stew dishes”. The court stated that the mark in question directly involved the delivery of a sausage stew with fishcake because of the “fishcake” and “sausage stew” parts of the mark.

The court pointed to evidence showing that consumers mistakenly believed that the sausage stew sold at this restaurant contained fishcakes. The court also recognized Fishcake Restaurant’s well-known status for consumers of sausage stew; however, this fact does not guarantee that there is no risk that consumers will see the mark in question being misled into believing that it delivers a sausage stew with fish cake.

Accordingly, the Patent Court decided that the trademark in question should be invalidated under South Korean trademark law and that the decision of the IPTAB was reversed. The licensee, Fishcake Restaurant and Grandma Huh, did not appeal the patent court’s decision. Thus, the case was returned to the IPTAB to revoke the original decision.

Implications of the Patent Court Decision

The judgment of the Patent Court clarified once again that deception is a ground for the non-registration of a mark even if (i) the mark is recognized as distinctive taking into account all of its elements; and (ii) the mark contains a famous trade name which has acquired distinctiveness through extensive use.

Furthermore, it shows that trademarks registered in violation of the misleading trademark provision can be invalidated at any time without applying the statutory five-year limitation period, this rule being an absolute ground for rejection.

The reasoning of this decision suggests that it is essential to select and use a mark which is not liable to create misunderstandings as to the nature or quality of the goods, since one of the main objectives of the law on trademarks is to “protect consumers”.

Recently, it has become popular in South Korea to use famous brands for products in fields other than that in which the brand is known as a marketing method to arouse consumer interest. Examples of this so-called funsumer marketing include Seoul Milk shower gel, a fizzy drink with famous Monami Magic marker brand, and chocolate in a shoe polish case with famous Horse shoe polish brand. These are sold in collaboration with the owners of these famous brands.

However, this decision of the Patent Court indicates that a trademark can be rejected or invalidated if it can cause misunderstanding with regard to the products it covers.

Min Son, PhD

Managing Partner, Hanol IP & Law

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