In principle, a trade name may be freely selected.
Selection of a trade name
- “Trade name” refers to the name used by a merchant to display his/her identity for a business purpose. Since the trade name is the business name of a merchant, the name of the business other than the merchant is not a trade name [『Legal Terminology Casebook』, Ministry of Government Legislation · Korea Legislation Research Institute].
- A merchant may choose his/her name or other names as his/her trade name (Article 18 of the Commercial Act).
- Although the trade name may be freely selected in principle, the following restrictions still apply to ensure the safety of transactions and prevent reckless abuse of trade names.
· A single trade name must be used in the same business (Article 21(1) of the Commercial Act).
· No person, other than a company, may use in the trade name any lettering indicating a company (Former part of Article 20 of the Commercial Act).
※ Any person who violates this provision will be subject to an administrative fine not exceeding KRW 2 million (Article 28 of the Commercial Act).
· No person shall, for any unfair purpose, use any trade name likely to induce others to believe that it represents the business of another person (Article 23(1) of the Commercial Act).
※ Any person who violates this provision will be punished by an administrative fine not exceeding KRW 2 million (Article 28 of the Commercial Act).
Registration of a trade name
- No trade name registered by another person shall be registered as a trade name of the same kind of business in the same Special Metropolitan City, Metropolitan City, or Si/Gun (Article 22 of the Commercial Act).
- Any person who uses the registered trade name of another person in the same Special Metropolitan City, Metropolitan City, and Si/Gun, in respect of the same type of business shall be presumed to have done so for an unfair purpose (Article 23(4) of the Commercial Act).
- Registration procedure
· A person who intends to register a trade name needs to submit an application for a new trade name registration (including electronic documents) to the district court that has jurisdiction over the applicant’s business establishment, its branch or a registry [Article 4, Article 18 and Article 19 of the Commercial Registrations Act, Attached Form 1 of Established regulations on the format of the commercial registration application form (Established regulations on registration No. 1613, 2016).
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Is it possible to use the same trade name for a store that I have acquired?
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(Question) ‘A’ acquired a thriving rice cake store from ‘B’ and began its operation. In order to attract existing customers of the rice cake store, A paid the premium to buy the trade name as well, but B opened a rice cake business nearby under the same trade name. Can A prevent B from using the trade name? (Answer) Yes, A can. In addition to being identical in core parts between the trade names of A and B, as their nature, contents, operating methods, operating areas and customer pools are closely related to each other, the general customers may mistakenly believe that B’s trade name represents A’s business. Furthermore, the continued use of A's trade name known to nearby consumers by opening a new rice cake store after the transfer of business may be deemed to be use of the trade name for an unfair purpose of inducing others to believe that B’s business represents the business of A. This violates Article 23 of the Commercial Act, which prohibits the use of a trade name that is likely to induce others to believe it represents the business of a third party, A may file a lawsuit against B to obtain an injunction on B’s use of the trade name. < Supreme Court 08. 21, 2008 Verdict 2006Da64757 Decision >
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If you register the trademark of your trade name, the right to its usage will be protected.
Trademark registration
- Concept of the trademark
· The term "trademark" means a mark used to distinguish goods (including services or goods related to the provision of services except goods on which a geographical indication is used) of 1 business from those of others (Subparagraph 1 of Article 2(1) of the Trademark Act).
· The term "mark" refers to all indications used to identify the source of goods, irrespective of the composition or methods of the expression thereof, which include any sign, letter, figure, sound, smell, three-dimensional shape, hologram, movement, color, etc. (Subparagraph 2 of Article 2(1) of the Trademark Act).
Trademark registration
- Not everyone who starts a business must register the trademark of their trade names. However, the trade name not only distinguishes itself from other stores, but also represents its reputation if the store is successful, thereby creating the property value. Therefore trademark registration is one way to protect the value of your future property and protect your rights.
- Effect of trademark registration
· A trademark right holder will hold the exclusive right to use the registered trademark in relation to designated goods (Main body of Article 89 of the Trademark Act).
√ The duration of trademark rights will be 10 years from the date of registration and its establishment, and such rights may be renewed for another 10 years by filing an application to register the renewal of its duration (Article 83(1) and (2) of the Trademark Act).
· A trademark rights holder or an exclusive licensee may seek an injunction requesting the prohibition or prevention of infringement against a person who infringes or is likely to infringe upon his/her rights (Article 107(1) of the Trademark Act).
- Application for Trademark Registration
· Any person who intends to obtain trademark registration must submit the following documents to the Commissioner of the Korean Intellectual Property Office (Article 36(1) of the Trademark Act and Article 36(1) and Attached Form 3 of the Enforcement Regulations of the Trademark Act).
√ An application for trademark registration (Attached Form 3 of the Enforcement Regulations of the Trademark Act)
√ A copy of the trademark sample (excluding sound trademark, smell trademark, and other trademarks that cannot be visually recognized)
√ A copy of description about the trademark (applicable only to applications for trademark registration regarding ① a combination of colors or colors that are not combined with other items, holograms, movements, or other visually recognizable marks, or ② among sounds, smells, etc. that are not visually recognizable, symbols, letters, drawings, or other realistic visual representations)
√ A copy of articles of incorporation or bylaws, or their summaries that provide matters regarding collective marks or certification marks (applicable only to applications for the registration of collective marks, collective marks with geographical indication, certification marks, certification marks, and certification marks with geographical indication)
√ A written copy that evidences the managerial fact on the business (only for the registration applications of operation marks)
√ A copy of a sound file that conforms to the realistic representation of the corresponding mark in the form of symbols, letters, drawings or other visual means (only for the registration application of sound trademarks)
√ 3 airtight containers containing the smell of small samples that conform to the visual representation or 30 patches that contain the smell (only for the registration applications of small trademarks, the smell samples should be provided in sealed containers or smell patches designed to prevent the smell from disappearing or changing easily)
√ An electronic recording medium, such as a videotape, CD-ROM or optical disk, containing images showing the characteristics of motions (only for the registration application of motion trademarks)
√ A copy of the document demonstrating that the quality, origin, production method or other characteristics of the goods or services that require proof and the applicant’s ability to manage such demonstrated matters (only applies to registration application of certification trademarks)
√ A copy of the document certifying the right of representation of an agent in case the agent carries out the procedure
Signboards, etc. must be installed for the displaying methods in accordance with the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry.
Signboard installation
- Concept of outdoor advertisements
· The term "outdoor advertisements" means advertisements exposed to the public continuously or for a certain period and which can be seen by the public in places where they pass freely, such as signboards, standing signboards, placards, posters, leaflets, and others similar thereto (Subparagraph 1 of Article 2 of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
- Displaying methods for advertisements
· The letters of advertisements shall, in principle, be written in Korean alphabet in accordance with the Korean alphabet (Hangul) orthography, the rule of Romanizing Korean words, the rule of spelling foreign words in the Korean alphabet, etc., and when written in foreign letters, they shall be spelt side by side with the Korean alphabet, unless any special grounds exist (Article 12(2) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
· Advertisements or display facilities (hereinafter referred to as “advertisements, etc.”) may be displayed with diagrams, etc. symbolizing the commodities, place of business, etc. (Article 12(3) of the 「Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry」).
· Advertisements, etc. may be displayed in rectangular, square, round, or other forms to the extent not adversely affecting scenic landscapes and safety (Article 12(4) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
· Advertisements, etc. shall be displayed in such a manner as to not cause any obstruction to the passage, etc. of pedestrians and vehicles and as to not tumble down or fall over by the wind, impacts, etc. (Article 12(5) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
· Fluorescent or luminous paints (including the tapes applied with such paints) shall not be used for advertisements, etc. (Article 12(6) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
· Advertisements, etc. shall be anchored to the ground, buildings, other artificial structures, etc., and no movable signboards shall be installed. However, standing signboards referred to in Subparagraph 6-2 of Article 3 of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry may be installed to the extent that they do not endanger public safety, in accordance with the municipal ordinance of a Si (City)/Do (Article 12(7) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
· The total number of signboards that may be displayed by a single business place shall be up to three, to be prescribed by municipal ordinance of a Si/Do (4 if the business concerned is situated at the corner where 2 roads meet or if it is situated in a building facing roads on the front and rear sides of it). However, the number of advertisements in the following shall be limited to the extent of the total number (Article 12(8) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements and Promotion of Outdoor Advertisement Industry).
√ Standing signboards: 1 in total
√ 1 Digital advertising signboard placed on a wall of a large-sized store or a traditional market, where a micro-enterprise is housed (limited to cases where micro-enterprises jointly use it for self-advertisement)
· Additional methods of display other than those specified above may be prescribed by municipal ordinance of a Si/Do (Article 12(9) of the Enforcement Decree of the Act on the Management of Outdoor Advertisements, Etc. and Promotion of Outdoor Advertisement Industry).
Promotion should be effective, and unfair advertising is prohibited.
Precautions to take for promotions
- No business entity, etc. shall place any of the following labeling or advertising that is likely to undermine fair trade order by deceiving or misleading consumers, or compel other business entities to do so (Article 3 of the Act on Fair Labeling and Advertising and Article 3 of the Enforcement Decree of the Act on Fair Labeling and Advertising).
· False or exaggerated advertising that advertises what is not true or inflates facts
· Deceptive labeling or advertising that labels or advertises through methods such as concealment or understatement of facts
· Unfair comparative labeling or advertising that labels or advertises oneself or his/her product or service (hereinafter referred to as “product, etc.”) as being superior or advantageous in comparison with another business entity, business association (hereinafter referred to as “business entity, etc.”) or product, etc. of a business entity, etc. without clearly stating the subject or standards of comparison, or without providing objective grounds.
· Slanderous labeling or advertising that slanders another business entity, etc. or the product of another business entity, etc. by labeling or advertising them with contents with no objective basis or engaging in defamation or slander by labeling or advertising unfavorable facts only