Act of Unfair Competition

This refers to the act of using an indication that signifies another person's goods, or a similar indication, so as to cause ordinary consumers to mistake the goods for those of another person.

Representative examples include imitating a trademark or logo, or using packaging or names with an appearance similar to the genuine product.

This is regulated as unfair competition because it causes confusion among consumers as to the source of the goods.

Companies may need to continuously monitor whether products similar to their own brand are being used in the market.

This is an act that causes confusion as to the entity behind a business and imitates another person's trade name, signboard, advertising name, website domain, or the like, or uses a similar name, thereby causing customers to confuse it with the business of a particular company.

It frequently occurs through online marketing, offline signboards, app store registration names, and the like.

Because it is particularly frequent in the franchise industry and in online platform services, it is important to conduct a prior search for the use of similar names and to have a legal response system in place.

This is the act of using another party’s widely known trademark or identification mark identically or similarly, thereby damaging the reputation and originality of that trademark.

Even if it does not cause confusion as to the source, it results in weakening the distinctiveness and identifying power of the trademark.

Marketing that implies or evokes an association with a famous brand, the setting of keyword advertising, and similar conduct fall under this category.

A company should monitor and take legal measures so that its famous trademark is not diluted by a third party.

This is the act of making false or exaggerated labeling or advertising regarding the place of origin, ingredients, manufacturing method, function, and the like, so as to cause consumers to perceive the product differently from reality.

For example, an expression such as "100% domestic raw materials" becomes a problem when it differs from the facts, and such conduct also occurs frequently in social media advertisements, sponsored content on YouTube, and false reviews.

Because the Act on Fair Labeling and Advertising may also apply concurrently, companies should establish internal content production guidelines, and verification of the accuracy of labeling should be carried out first.

This is the case where an agent, distributor, contract manufacturer, or the like who used a trademark with the permission of the trademark holder continues to use the trademark without authorization even after the contract has ended.

In this case, consumers are likely to still mistake the goods for genuine products, so it is recognized as unfair competition.

At the time of contracting, it is important to specify the scope of use of the trademark and the prohibition of use after the contract ends, and to take follow-up measures such as recovering the trademark upon actual termination.

This refers to the act of preempting a domain that is identical or similar to another person's trademark, trade name, or personal name, thereby preventing the legitimate rightholder from using that domain.

Subsequently demanding monetary compensation or using a similar brand to draw search traffic also becomes a problem.

Before launching a new brand, a company should always check whether the domain has already been taken and secure key domains in advance, and when a domain dispute arises, it can respond through the procedures of the Korea Internet & Security Agency (KISA).

This refers to the act of substantially imitating the ‘form’ of another party's goods, such as the external appearance, packaging design, or UI layout, and producing or selling similar goods.

Even if the goods in question are not a registered design, the act may be deemed unfair competition if it causes external confusion between the two products from the standpoint of ordinary consumers.

Recently, the scope of protection has been broadening to include app screen layouts, package color combinations, and similar elements, and a company should secure a differentiated design and concept from the early stages of product development.

For the loss suffered by the harmed company due to an act of unfair competition, the infringing company bears liability for damages.

In this case, the amount of damages may generally be calculated by selecting among the difference in profit and loss, an amount equivalent to a royalty, or the infringer's profit.

Because there are provisions presuming the amount of damages and punitive damages (up to three times), the amount of compensation may increase significantly.

A court may order, with respect to goods, advertisements, packaging, and the like involved in an act of unfair competition, measures such as a prohibition on sale, suspension of advertising, removal of displayed items, and recall of inventory.

This halts a company's production and distribution lines and causes significant distribution losses.

A blow on the level of a suspension of business may become a reality.

If a company becomes embroiled in a legal dispute over unfair competition, its credibility may decline sharply, and its relationships with consumers and business partners may be damaged.

In particular, if an unfair competition case is disclosed through the internet or media reports, considerable time and cost may be required to restore brand value.

When an act of unfair competition is detected, the following penalties are imposed.

Liability may also be attributed to a representative or an individual employee, so the legal risk is significant.

If unfair competition is confirmed in the course of cooperation with a public institution or a large company, a business may suffer disadvantages in public bidding or have a partnership terminated.

In particular, the Public Procurement Service, local governments, and public institutions often manage businesses engaged in unfair competition on a blacklist.