This case law is one of an ideal case study to study the concept of a trademark infringement as it entails a High-end luxury leather brand based in Paris which filed an infringement suit against South Korean fried chicken restaurant named Louis Vuiton Dak.

Which happened to sell its chicken in a packaging which was extremely similar and resembling that used by the luxury brand Lois Vuitton itself. It is of no doubt that the brand Louis Vuitton is a worldwide recognized brand which is purchased and endorsed by various top celebrities around the world. This brand has built its own brand value as a consequence of its excellent and high-grade product quality and design. Thus a South Korean restaurant which is though not related to the product line that of the trademark holder opens a restaurant with a deceptively similar name with an almost identically similar logo and packaging technique.

ABOUT THE PARTIES

1. Louis Vuitton – It is a company incorporated under the laws of France. It is a part of Meet Hennessy Louis Vuitton (LVMH) Group. Its products are advertised in various countries under the said trademark. In addition to the name “Louis Vuitton” as a trademark its initials “LV” as used as the trademark since 1890. It has a canvas design with a flower pattern and the inter-wined initials “LV”, known as a “Toile Monogram” and is in use since 1896.

2. Louis Vuiton dak – It is a South Korean fried chicken restaurant based in Seoul owned by Kim.

ISSUES

Whether the disputed Louis Vuitton dak name is similar to the Louis Vuitton trademarks, give rise to a likelihood of confusion on the part of the public within the meaning of Article 7 (10) [ Republic of Korea Trademark Act]

Whether the disputed name is similar to the Louis Vuitton trademarks, give rise to a link between the sign and the trademark in the mind of the average consumer, leading to unfair advantage being taken of the distinctive character or reputation of Louis Vuitton within the meaning of Article 7 (12) [ Republic of Korea Trademark Act]

Whether the use of LV’s ‘Toile Monogram’ in its food packaging amounts to trademark infringement and counterfeiting?

RULES

1. Article 230 Trademark Act (Republic of Korea)- Crime on Infringement- “Any person who infringes trademark rights or an exclusive license shall be punished by imprisonment with labor not more than seven years or by a fine not exceeding 1oo million won.”

2. Article 7 (10) (Republic of Korea Trademark Act)
“Any trademark which is feared to cause confusion with goods or services of other persons because the trademark is remarkably recognized among consumers to indicate the goods or services of other persons.”

3. Article 7 (12) (Republic of Korea Trademark act)
“Any trademark which is identical or similar to a trademark (excluding any geographical indication) recognized as indicating the goods of a particular person by consumers inside or outside of the Republic of Korea, and which is used for the unjustifiable purposes, such as obtaining unfair profits or inflicting harms on the particular person.”

JURISDICTION
Trademark registration with KIPO covers only the territory of South Korea. LV sued the restaurant in Seoul Central District Court.

ANALYSIS

The use of deceptively similar company names or designs is very common in the Asian market. In fact, there has been a rise in such activities due to the strong brand equity. In the present case chicken restaurant owner Kim named its restaurant “Louis Vuiton Dak”. Along with just removing ‘t’ from ‘Vuitton’, the owner also used the similar toile monogram on his food napkins and takeout packaging.

The owner of the restaurant played upon the Korean word ‘Tondak’ which literally means whole chicken and so chose to name his dish as Louis Vuitton Dak.

Let’s analyze the Reasons why Kim adopted a similar mark are first, easy start– South Korea is known for its inventive products and in the recent years there has been in a boost in the start-up companies along with style and pop companies. Entrepreneurs are looking forward to entering the market without much hassle and gain enormously by using other brand’s goodwill and reputation. The use of LV’S logo and its name by Kim was an act of a parasite. It attracted customers to itself and created wider recognition in the market on the basis of LV’s brand identity. This form of opportunism can either break or make a business depending upon the agility. 

Lack of legal repercussions- We often come across products which use almost similar names like ABIBAS, POOMA which almost sounds and looks like ADIDAS and PUMA. Often these deceptive brands are a small-scaled business and are ignored. From Kim’s viewpoint, his small-scaled chicken restaurant was nothing when compared to the high-end luxury French brand. 

Therefore the legal action against him and his eatery was minimal. It could have only faced legal scrutiny if his eatery would have gained popularity such that consumers were confused to think both the brands as one. Also, he could on a later date in case of any infringement action just change is products packaging and pay a nominal amount as damages but the objective to gain consumer market would have been accomplished by then. 

Free marketing campaign- The more people became aware of the more coverage LV Dak gets. However in reality the success of a brand depends upon its goodwill and its esteem it has earned for past long years. A brand which tries to introduce a product with a copy-cat product will not survive in the long run.

Acquiring distinctiveness – the brand is the power of the organization. It is developed through marketing skills and giving the customers value for money. It takes years to develop it. LV invests in its humongous publicity globally. It sponsors its brands through advertisements and Magazines. It has been able to develop this reputation because of the high class-exclusive and limited edition designer products. This creates curiosity among consumers. The exclusivity of the product is associated with the style and elegance which makes it record-high sales all over the world.

Lack of Good Faith – The court did not believe that the act of Kim, owner of the restaurant decided to use mark LV was in good faith. In fact, he knowingly and without prior permission started using a mark that was dubiously similar to fashion LV to acquire market share. He knew about the pre-existing brand identity and to use this identity for his good was the sole motive.

Unfair Competition- A competition is said to be unfair when the defendants take a ‘free-ride’ on the plaintiff’s trade name. The party has obtained an advantage by an act of fraud or dishonesty. The purpose is to deceive or confuse the public either to attempt to replace other product or injure the business of the competitor. In the present case, the violation of Unfair competition Prevention and Trade Secret Protection Act wherein Louis Vuitton dak has the cheated the rightful owner of the mark out profits. Dilution of the famous mark, also it has diluted the image of Louis Vuitton a fashion brand.

In Victoria’s Secret’s v Victor’s Little Secret case, a famous lingerie brand Victoria’s secret famous mark was tainted when a dupe brand Victor’s little secret through association.

Counterfeiting- If a person uses a trademark and affixes it to the goods or the packaging thereof and offers or puts them on sale in the market. In the luxury industry, originality and rarity are the two main components of success. So, when a counterfeit product is sold it is usually inexpensive, easily available such that the efforts put in by designers to make a unique product is squandered. It should be deceptively similar. In Reckitt & Coleman Products Ltd v Borden Inc and Warnick BV v Townend & Sons (Hull) Ltd, the classic trinity was laid down. According to this three elements need to prove, first, the plaintiff has goodwill. Second, misrepresentation by the defendant. Third, damage due to the misrepresentation.

In the present case, Louis Vuitton has a global reputation built through years of honest work. It has been misrepresented by LV dak.

There has been damage caused to its image due to such misrepresentation. Thus, LV dak is liable for counterfeiting.

How to avoid counterfeiting?

-Counterfeit’s side – “Out of ignorance”

Mostly the counterfeiting takes place due to counterfeiter’s bad faith however there may be cases where it may be due to insufficient knowledge. Therefore to avoid counterfeiting one must search prior use of trademarks or domain names with the identical trademark or search for similarities. Since the impression of similar designs or exterior look may create confusion. Although this is a tiresome task it helps avoid infringement suits risk.

-Trademark Owner’s side:
Firstly, surveillance: With this, the trademark owner is informed of the deceptively similar trademark registrations.

Secondly, having a process in place: Having a clear method for processing an infringement suit, a lawyer and funds ready. Thirdly, go local: since each country has its different laws which become difficult to comply with.

COURT’S RULING

The court stated it is an accepted fact that Louis Vuitton has acquired a global brand image. Despite a slight change made by the restaurant owner to the original name, it was still quite similar. Although both the business operated in different market segments, as one was a highly reputed trademark the other cannot be allowed to use that and take undue advantage for it. The Court while deciding the case considered the long duration the mark was used for/infringed, the deliberate intention with respect to infringement activities. It must be said that the infringer should have relied on his own hard work and if so he would have acquired success without infringing the rights of LV.

In India, in the Amul case, the court held that by the virtue of continuous and extensive use, ‘Amul’ is recognized by the public to be associated with the Anand-based milk products. The adoption of the trademark Amul would not create confusion but would cause unnecessary inconvenience.

Relief granted: The court of Seoul, South Korea gave the judgment. It levied 1250 KRW fine on Kim for trademark infringement. He changed the name to “chaLouisvui tondak”. This was a bigger mistake and the court took it to be a non-compliance of courts order and therefore ordered the restaurant to pay 12750 KRW a day to fashion brand for 29 days i.e. till the date the amended name was displayed. Thus, a total fine of Rs. 14.5 million KRW (about 10 Lakh INR) was ordered to be paid.

DISCUSSION IN LIGHT OF SIMILAR CASES

3M v 3N

In June 2016, the Supreme people’s court of China gave a decision against the trademark infringer ordering 3n to cease the sale of the product and pay damages of Rs. 13 million far exceeding the statutory limit.
The case is about trademark infringement where 3M, an American multinational conglomerate corporation had its mark registered filed a petition before Zhejiang Higher People’s Court. In 2014, the HW’s product bears a mark ‘3N’ similar to ‘3M’. The product is also identical with respect to the use, function and target consumers. Secondly, when the consumer’s purchases such project they are less vigilant and they may possibly believe there is a link between the two products. Both the marks carried ‘CCC’ safety mark and had a similar red and white reflector tape. When an infringement related to trademark is analyzed important factors to be taken into consideration are distinctiveness, Reputation of the owner of the trademark and market share, good faith. 3M has established its distinctiveness in the reflector market with its wide product market in China also throughout the years 3M has created a brand image of its own.

Red bull v Big Horn

The case is based on the rights of the trademark holder. Red bull, a well-known mark for energy drinks, other beverages and bottled water filed a suit against Big horns for infringing its trademark. Since Bighorns was lesser-priced the use of a similar visual and conceptual form of the design by Big horns such that the consumers preferred big horns.

The court said the shift in demand had not been there had the Big horns not used the deceptive mark. So in quintessence it was ‘free-riding’ on the reputation of Red Bull.

Big horns took unfair advantage of the global reputation of Red Bull.

CONCLUSION

The act of LV restauarant chose to use a highly distinctive and well known registered trademark. This act is illegitimate and improper irrespective of the fact that the mark was later used for some time and acquired substantial goodwill in South Korea.

Therefore this is an act of foul play and obviously intentional.
If such trademark infringement activities are permitted to continue and no actions are taken against the infringer by the court then it will unquestionably encourage trademark infringers which contradicts the legislative purpose and aim of Trademark Act. If the two marks are allowed to co-exist it may create negative consequences with certain exceptions.