Hermès International v. Suwa United Co., Ltd., Seoul Central District Court [Dist. Ct.], 2014
In a case involving French luxury brand Hermès International (“Hermès”) against Korean importer Suwa United Co., Ltd. (“Suwa”), the Seoul Central District Court ruled on January 29, 2015, that famous unregistered handbag designs can function as source identifiers and are therefore protectable against unauthorized imitations. The decision (now on appeal) is a win for established global brands that have invested substantially in promoting their goods. The case is notable as yet another South Korea court decision interpreting the new “catch-all” amendment of the Unfair Competition Act (UCPA) since it came into effect on January 31, 2014. The “catch-all” provision of the UCPA prohibits “an act of infringing a person’s right to profit by using that person’s product, which was the result of considerable effort and investment, without authorization for one’s business through a method that contravenes fair commercial trade practice or competition order.” An earlier decision of the Seoul Central District Court, NUPL Co., Ltd. v. Mcostar Co., Ltd., 2014Ga-Hap524716, Nov. 27, 2014, involving this provision in a signature-dish and café-design trade-dress case was reported in our March 2015 Information Letter.
The court found in favor of Hermès despite the differences in the trademarks under which the bags were sold and their materials and pricing, and awarded around US $90,000 in damages, as well as an injunction against Suwa’s manufacture or sale of imitation bags.
BIRKIN (Top) and KELLY (Bottomt) Hermès bags
Hermès owns numerous trademark registrations around the world for BIRKIN and KELLY for handbags named after famous screen actresses. Suwa, which marketed some of its bags under the GINGER mark, was found to have unfairly copied the shapes of Hermès’ iconic bags. The Hermès bags are hand-crafted collectibles made of leather that sell for several thousand dollars each. Purchase of these highly-coveted status symbols are subject to waiting lists, and their value can increase with resale; in 2013 one crocodile edition fetched over US $100,000 at auction in Beverly Hills, California. On the other hand, Suwa’s bags are presumably factory-made items of polyester aimed at the youth “swag” culture that proudly riffs off designer brands and are not intended to be mistaken for the real thing. The court did not require a showing of direct competition to reach its conclusion that Suwa clearly copied Hermès’ famous trade dress and free rode on its reputation in order to increase its own sales.
Thus far, we have seen the revised UCPA applied to protect trade-dress owners’ rights in the fashion and restaurant industries. Both cases are on appeal, and it remains to be determined whether these broad applications are upheld.