Supreme Court rules fear of infringement is no excuse for non-use of trademark

The Supreme Court ruled that a trademark holder's fear of infringing on another company's rights does not justify failing to use the registered mark. The decision clarifies that internal business concerns or potential legal conflicts are insufficient grounds to avoid cancellation under South Korean law.

In the case decided March 12, a company had registered trademarks for cosmetics but never used them, citing concerns that doing so would violate the rights of a rival firm that held similar marks. Although the company had successfully petitioned to invalidate the rival's marks and commissioned packaging designs using its own logo, the court found these steps inadequate. The lower court had previously accepted the preparation efforts and infringement fears as valid reasons for non-use, but the Supreme Court overturned that judgment in case number 2024Hu10504.

The justices reasoned that the company could have sought an objective legal determination regarding infringement liability rather than voluntarily withholding the mark. Because the company chose to accept the consequences of non-use despite having the option to litigate, the risk remained a controllable internal factor. The court noted that recognizing infringement fears as a valid excuse would allow marks to remain registered indefinitely without actual use, undermining the purpose of the Trademark Act.

To claim a "justifiable reason" for non-use, a trademark owner must prove that external, uncontrollable factors prevented commercial activity. Acceptable circumstances include natural disasters, government import bans, or legal prohibitions on sales. Subjective factors such as poor business performance or anxiety over potential litigation do not meet this threshold.

The Trademark Act allows for cancellation if a mark goes unused for three consecutive years without a valid excuse, a measure designed to free up opportunities for other businesses to register trademarks.