Supreme Court rules that AMERICAN UNIVERSITY trademark is inherently distinctive

Introduction
Korean Trademark Act and Supreme Court precedents
Supreme Court decision
Comment

Introduction

The Supreme Court recently ruled en banc that the AMERICAN UNIVERSITY trademark was sufficiently distinctive among South Korean consumers to be registered in connection with university education services, instruction services and other designated services.(1) The court's reasoning is notable because it appears to hold that consumer awareness evidence can be used to prove the inherent distinctiveness of a mark in South Korea, not just secondary meaning.

Korean Trademark Act and Supreme Court precedents

Under the Korean Trademark Act, trademarks consisting of well-known geographical names are considered inherently non-distinctive ("a trademark consisting only of a well-known geographical name, its abbreviation or a map" cannot be registered (Article 33(1)(iv)).(2) This remains true even if the mark is only similar to or evocative of a well-known geographical name (eg, 'Finlandia' or 'British-American').

Further, combining a well-known geographical name in a mark only with other non-distinctive elements (eg, 'London Town' or 'Nippon Express') does not render the mark distinctive unless the combination creates a new concept or has distinctiveness that is separate from the geographical name. In addition, a mark composed of a well-known geographical name and a non-distinctive mark can also be rejected based on Article 33(1)(vii), which prohibits the registration of non-distinctive marks in general.

However, like other inherently non-distinctive marks, a mark comprising a well-known geographical name can be registered for specific goods if it has acquired sufficient secondary meaning through use to be recognised as a specific source by South Korean consumers (Article 33(2)).

Supreme Court decision

The Supreme Court decision began by determining that American was a well-known geographical name and University was merely a descriptive mark relating to the designated services (eg, university education and instruction services), suggesting that AMERICAN UNIVERSITY should be considered inherently non-distinctive under Article 33(1)(iv).

The court then analysed various facts relating to the use of AMERICAN UNIVERSITY, including:

• the more than 120 years of American University's existence;
• the size of the university, which has over 10,000 students;
• the fact that American University offers various educational programmes in cooperation with many South Korean universities;
• American University's advertising expenditures of more than $18 million a year between 2003 and 2012;
• the 8.5 million visitors to the American University official website in 2012;
• American University's presence in rankings published by numerous prominent media outlets, including US News & World Report, which ranked American University 77th among US national universities in 2013; and
• the number of blogs (59,761) and online cafes (22,770) relating to American University on www.naver.com, the most popular portal site in South Korea, which indicated that many people had searched online for AMERICAN UNIVERSITY.

Based on these facts, the court determined that AMERICAN UNIVERSITY was quite well-known among South Korean consumers – particularly South Korean students preparing to study in the United States – in connection with the designated services.

Interestingly, the court then concluded that AMERICAN UNIVERSITY was distinctive because it constituted a new concept with substantial distinctiveness in connection with university education services. In other words, the court decided that rather than merely demonstrating that the trademark had acquired sufficient secondary meaning to be registered, the facts showing the well-known nature of the AMERICAN UNIVERSITY trademark actually rendered it inherently distinctive and not covered by Article 33(1)(iv) or (vii) of the Trademark Act.

Comment

Notably, there were several concurring opinions, one of which pointed out that the court was using consumer awareness from actual use as a basis for determining inherent distinctiveness, which seems to conflict with the usual notion that inherent distinctiveness should be determined with reference to the trademark alone.

The concurrence also pointed out that under the majority's reasoning, it may be easier to use consumer awareness evidence to show that a mark is inherently distinctive rather than to prove secondary meaning – proof of secondary meaning would also require showing that the trademark:

• was used before the trademark application was filed; and
• had acquired distinctiveness for each specific good or service in the application.

Other concurring opinions pointed out that only a few other jurisdictions deny the inherent distinctiveness of famous geographical names, unlike South Korea.

The decision confirms another recent Supreme Court decision that upheld the registrability of Seoul National University's SEOUL UNIVERSITY trademark (in Korean). In that case, the Supreme Court also held that the mark was not inherently non-distinctive under Article 33(1)(iv) or (vii) of the Trademark Act because consumers were aware that the combination of Seoul and University referred to a specific national university located in Seoul and not any university in Seoul.(3) The AMERICAN UNIVERSITY decision not only clearly upheld this logic, but extended the reasoning to include South Korean consumers' knowledge of universities located outside South Korea.

The Supreme Court's en banc decision confirms that consumer perception should be considered when determining whether a mark comprised of non-distinctive and geographic elements has inherent distinctiveness in South Korea. It remains to be seen whether the Supreme Court will apply this flexible approach to trademarks comprising other non-distinctive elements, such as generic names or descriptive terms.

For further information on this topic please contact Sung-Nam Kim or Jason J Lee at Kim & Chang by telephone (+822 3703 1114) or email (snkim@kimchang.com or jlee4@kimchang.com). The Kim & Chang website can be accessed at www.kimchang.com.

Endnotes

(1) 2015Hu1454, rendered on 21 June 2018.

(2) The case actually arose under Article 6 of the old Trademark Act, which corresponds to Article 33 of the current act (effective 1 September 2016). For simplicity, this update will refer to Article 33 only.

(3) 2014Hu2283, rendered on 29 January 2015.