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| IP Newsletter | Fall/Winter 2015 | |
Daiso Asung Co., Ltd. ("Daiso") is the Korean franchisor of the DAISO store chain, whose business model is to offer a large and constantly changing selection of household items at very low prices. In 2013, after the defendant started using the name DASASO for its chain of similar competing stores, Daiso brought a civil action against them seeking an injunction and damages based on claims for unfair competition and infringement of its Korean trademark registrations in connection with the
(reg. No. 41-84516) and 
(reg. No. 45-7124) marks, both of which are registered for "stationery sales agency, kitchen utensils sales agency" and other similar categories.
Daiso produced evidence that it had been using the DAISO mark in Korea since 2001, and that by 2013, there were 900 franchised DAISO stores across the country with annual sales of more than KRW 800 billion (approximately USD 708 million). Daiso also showed that it had been recognized numerous times over the years with awards, had heavily advertised in Korea, and had been the subject of many articles in the mass media. Nevertheless, the district court rejected Daiso's claims and found that the DASASO and DAISO marks were not confusingly similar, based on a relatively narrow review of whether the words "DASASO" and "DAISO" themselves could be easily distinguished.
On appeal, the high court reversed the district court decision with respect to the trademark infringement claim, holding that consumers seeing the DASASO name clearly would be reminded of the DAISO mark, and that consumer confusion was therefore likely to result. In reaching its decision, the high court noted the following:
- - The first and last syllables of DAISO and DASASO are the same;
- - The services offered by the defendant are similar to the designated services for Daiso's registrations;
- - The DAISO mark is well-known in Korea;
- - The defendant had adopted a business concept similar to Daiso's, selling the same goods and targeting the same consumers; and
- - The defendant's stores displayed their goods in a manner very similar to Daiso.
While Korean courts generally do take into account the bad faith intent of the defendant, the fame of the plaintiff's mark, and other circumstances in deciding whether marks are confusingly similar, it is also not uncommon for marks consisting of short single words to be evaluated rather narrowly for similarity as the district court did in this case. However, the fact that the Supreme Court clearly reaffirmed that the totality of the circumstances must be considered in all determinations of the similarity of marks should encourage greater protection in future for all marks.
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Min-Kyoung JEE mkjee@ip.kimchang.com |
Angela KIM angela.kim@ip.kimchang.com |