Simmons Bed Co. Ltd (hereinafter “Simmons Korea”) manufactures and sells beds in Korea and is a registrant of the mark “SIMMONS”. KARAHAN Co. Ltd (hereinafter “KARAHAN”) imports and sells U.S. Simmons beds in Korea through websites, internet, and etc.

 

Simmons Korea filed a trademark infringement suit against KARAHAN, claiming that there is no relationship between Simmons Korea and U.S. Simmons Co. Ltd and the product quality of the both companies is different, therefore the importation and sale of U.S. Simmons beds by KARAHAN fall under a trademark infringement of the registered mark “SIMMONS”.

 

 

The regulation “Notice on Treatment of Import and Export for the Protection of Intellectual Property” by the Korea Customs Service stipulates that Parallel Importation of Genuine Goods by the third party does not infringe a trademark right if the followings conditions are met:

 

(a)    When the domestic trademark registrant and foreign trademark registrant are the same entity, an affiliate, and/or importing agent; except, when an exclusive licensee manufactures the goods by himself domestically.

(b)   When the Korean domestic trademark registrant and foreign trademark registrant are not the same, but when the domestic registrant or an exclusive licensee imports and sells only the genuine goods manufactured by the foreign trademark registrant.

 

 

ISSUE: Whether importation of genuine trademarked goods brings out issues of trademark infringement?

 

FACTS: In re case of the importation of the goods bearing the mark “POLO”, the domestic registrant and the foreign registrant are the same. There is an exclusive licensee in Korea. The exclusive licensee manufactured, sold, and advertised the goods himself. Other than the exclusive licensing agreement between the foreign registrant and domestic exclusive licensee, there was no special relationship, such as same entity status or affiliate, between the two.

 

HOLDING: The Supreme Court held that importation of even genuine goods is considered as an infringement of the domestic exclusive licensee’s right. The court reasoned that i) although domestic registrant is the same as the foreign registrant, ii) the exclusive licensee domestically manufactured, sold, and advertised the goods himself, and iii) there was no other special relationship between the foreign registrant and domestic exclusive licensee other than the exclusive licensing agreement. (Supreme Court Decision, October 10, 1997, Case No. 96Do2191)

 

 

 

The court held that the importation of goods by KARAHAN did not infringe Simmon Korea’s trademark rights.

 

The court reasoned that it is difficult to say that Simmons Korea has acquired an independent technique regarding the pocket spring because the technique of pocket springs has been developed by all U.S. Simmons and such technique has been disseminated worldwide.

 

Moreover, the court stated that Simmons Korea has been advertising that they manufacture the goods with the same quality as U.S. Simmons through a technical partnership; and thereby raised the expectations of general consumers in Korea, that such goods of Simmons Korea are up to the same standard in qualities as the goods of U.S. Simmons. Simmons Korea, through aforementioned advertisement, won the hearts and minds of Korean consumers and continued its business using this strategy.

 

Although there is no official capital relation between the Simmons Korea and U.S. Simmons, it is judged that they came to an agreement regarding the district division of the trademark right and an exclusive license agreement of the mark, and through a continuous technical partnership, they seem to have established some legal relationship per se.

 

Furthermore, it is difficult to say that Simmons Korea has grown to be so independent and acquired such credit and fame to be distinguishable from U.S. Simmons. Ultimately, the marks attached on the goods imported by KARAHAN and on Simmons Korea indicate the same source and there seems to be no substantial qualitative difference between the goods of Simmons Korea and KARAHAN.

 

 

 

The intent of the Decision may be that since Simmons Korea is manufacturing beds in Korea through technical partnership with U.S. Simmons, the products imported from the U.S. could be viewed as genuine in all practicality. Furthermore, this case seems to show the changing trends of Korean legal minds from 1997 Polo case and the re-positioning of the general policy as pro-consumer regarding the Parallel Importation of goods.

We are pleased to announce that Mrs. Keum-Ho Lee and Ms. Jee-Hye Nho joined HANYANG International in January 2011 and November 2010, respectively.

 

 

 

 

 • She graduated from HANYANG University with a B.A. in Clothes & Textiles in 1990, and received a B.A. in Law from Korea National Open University in 2002. She studied English at the Humber College in Toronto, Canada for one year in 2010.

 • Before joining this firm, Ms. Lee worked at Y.P.LEE, MOCK & PARTNERS as a trademark attorney.

  

 

 

► Ms. Jee-Hye Nho  

 

 • Ms. Nho passed Korean patent and trademark bar in 2007, and has worked primarily in prosecution, litigation, and counseling of trademarks and industrial designs, trademark, clearance, due diligence and searching, trademark portfolio management, counseling of copyright, unfair competition, and internet-related matters.

 

 

 

 • She graduated from YONSEI University with a B.S. in Biochemistry in 2007. She studied Japanese  in Tokyo for six months after graduation.   

 • Before joining this firm, Ms. Nho worked at Central International Patent and Law Firm as a trademark attorney.