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Legislative Update: Trademark Act Amendment - Introduction of the 'Trademark Coexistence Consent System'
Jack Eui-Hwan JUNG, Hannah Hayoung Lee
Amendment Overview
On October 6, 2023, the National Assembly passed an amendment to the Trademark Act, introducing the 'Trademark Coexistence Consent System.' The amendment was officially promulgated on October 31, 2023, and became effective on May 1, 2024. The new system allows for the registration and use of later-filed trademarks that are identical or similar to earlier-registered trademarks, provided the prior rights holder consents. However, to safeguard consumer interests, any coexisting trademark used with fraudulent intent that leads to consumer confusion or deception is subject to cancellation.
Current Issues Addressed by the Amendment
Under the previous Trademark Act, later-filed trademarks identical or similar to earlier-filed or registered trademarks were typically rejected under Article 34(1)(vii) and Article 35(1). Statistics indicate that over 40% of trademark rejections stem from this provision, with 82% of these rejections affecting small and medium-sized enterprises (SMEs) and small business owners (as of 2022).
In response, businesses often resorted to complicated workarounds, such as having the prior rights holder file for and transfer trademark registrations to the intended user, creating inefficiencies. This process caused significant instability, especially for SMEs, raising the demand for a more flexible registration system.
Key Provisions of the Amended Act
1. Registration with Consent: The amended Trademark Act allows trademarks that are identical or similar to earlier-registered marks to be registered with the prior rights holder’s consent (Amended Article 34(1)(vii), proviso, and Article 35(6)). This exception does not apply if both the trademarks and the goods are identical. 2. Grounds for Cancellation: If a trademark registered with consent is later used with the intent of unfair competition, causing consumer confusion, it becomes subject to cancellation (Amended Article 119(1)(v-ii). 3. Statute of Limitations: The statute of limitations for filing a cancellation trial based on unfair competition is set at three years (Amended Article 112(3)). 4. Re-Filing Restriction: Trademarks that are identical or similar to those canceled under this provision may not be re-filed for three years from the date of the final decision (Amended Article 34(3)). International Context and ImplicationsThis amendment aligns with international practices, as countries such as the United States and Singapore have already adopted similar systems. Japan also passed a corresponding amendment in June, which is expected to be implemented shortly. This system is expected to enhance the stability of trademark use for SMEs and small business owners, allowing them to register trademarks with the consent of the senior mark's owner.Moreover, businesses with many affiliates are expected to be able to manage their trademarks more efficiently. Additionally, it is expected to have the effect of preventing potential trademark disputes in the future.
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