Important Revisions in the Unfair Competition Law
    1. Inclusion of "Dilution of famous mark"

    The existing Unfair Competition Law's reprehension is limited to acts that cause confusion as to famous trademarks or service marks in Korea. Thus, the existing Law provides protection only in cases where acts cause confusion as to trademark, service mark, origination of goods, possible affiliation, connection, and sponsorship.

    However, the revised Unfair Competition Law effective from July 1, 2001 will include a new provision where acts that unfairly compromise the distinctiveness and/or fame of a famous mark.

    This revision is considered as an importation of the "Dilution" theory from the U.S. (although in the revised Korean Unfair Competition Law the word "injure" is used, its intended meaning is similar to dilution). An example of injuring the distinctiveness of a famous mark would be to use the mark "KODAK" on goods that are totally dissimilar such as a piano. An example of injuring the fame of a famous mark would be to use "Budweiser" on an insecticide that would surely give displeasure to customers of Budweiser beer. Although this provision has few exceptions such as non-commercial use of mark and use under Presidential Decree, it nevertheless gives added security to the famous marks. Examples of non-commercial use of internet domain names using a famous mark would be anti-sites (e.g. www.anti-Hyundai.co.kr), non-profit organization sites, and personal homepage domain names.

    This provision will probably have a biggest impact in the field of internet domain names dispute. In the past, there must be specific acts of confusion in order for the Unfair Competition Law to apply. However, with this new provision, the use of a famous mark by the domain name even for dissimilar goods or services can be actionable (although the fact that whether a person registering a domain address and not putting up any web page on the domain address could be considered as a use is still disputed in Korea, in the U.S., such has been considered as a commercial use as long as the person who purchased the domain addresses purchased them mainly to sell them for pecuniary interest). Also, it should be noted that this "injury" theory of the new provision would not entitle the owner of a famous mark to seek compensatory damage and restitution unless such use was intentional.

    2. Elaboration and the Court's discretionary power in calculating damages.

    The revised Unfair Competition Law, Article 14, Section 2(1) elaborates on the method of calculating damages. More specifically, in the case of infringement from unfair competition or trade secret, the calculation of damages for loss of profit is the number of goods sold (assigned) by the infringer multiplied by the profit that the infringed party would have made for each of the infringed good sold.

    Regarding the Court's discretionary power, the revised Unfair Competition Law, Article 14, Section 2(5) gives discretionary power to the Court in setting the damage amount in cases where the Court finds that there has been an infringement, but establishing evidence of such damage is very difficult due to the nature of the infringement. A Court, in such a case, will look at the purport of all the arguments made and the result from fact finding to set a substantial damage amount. This new provision is intended to provide greater discretionary power to the Court in infringement cases involving unfair competition or trade secret where the calculation of damages is quite difficult, and it can be said that this provision, along with the elaboration provision in the above paragraph, are introduced to reduce the burden of proof on the part of the plaintiff in proving damages.

    3. The prohibition of unfair competition by former agents of trademark owners.

    The revised Unfair Competition Law prohibits former agents or representatives to use a mark that are similar or same on a similar or same goods of a trademark which he or she has represented in the past unless the former agent or representative can provide a legitimate reason for such use. This new provision adopted the language of the "Paris Treaty for Protection of Industrial Property Rights."

    4. Miscellaneous

    Other revisions give stricter protection of national flags and emblems (Article 3 of the revised Law), and amendments have been made to the existing terms and languages of the Unfair Competition Law to make the existing provision more clearer and well-intended.