Deals & Cases

Antitrust & Competition 2018-11-06
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Illegality of an act of indication of utility model registration and association certification and using them in advertisement, and legitimacy of sanction thereof are all acknowledged

Company A, a manufacturer of functional pillows, received a corrective order, an announcement order, and a penalty (“Disposition”) from the Fair Trade Commission for putting phrases such as ‘utility model registered’ and ‘Korean OOO Association Certified’ on specific pillow products of Company A (the “Products”) and use them when advertising the Products.

Company A argued over the non-existence of causes for the Disposition and illegality of the Disposition. The Seoul High Court recently dismissed all claims Company A had made for revocation of Disposition and ruled that the Disposition stands legitimate.

On behalf of the Fair Trade Commission, DR & AJU drew a conclusion in favor of the Fair Trade Commission which maintained the effect of the Disposition by making a concrete defense, focusing on the following points: (i) it is illegal to use the phrase ‘utility model registered’ when such a product, in fact, does not fall in the scope of the protection of rights for the registered utility model, and (ii) it is illegal to advertise a product as if it has been certified by the relevant association, considering the nature of certification and withdrawal of certification by the relevant association. ​

Unlike other ordinary cases of violation of the Act on Fair Labeling and Advertising, this case provides detailed criteria on whether using phrases such as "utility model registered" and/or "association certified" has misled consumers or not.