Hermès Prevails in the Seoul Supreme Court: PLAYNOMORE can play no more

*** The writing does not, and is not intended to, constitute legal advice by any means***

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Hermès initiated a lawsuit against PLAYNOMORE, a Seoul-based handbag brand, when the French brand learned that the latter has been allegedly selling look-alikes of Hermès Birkin and Kelly. One of the lookalikes (pictured above) features a cartoonish eyes design. Hermès owns trademark with respect to the shape of Birkin and Kelly. Hermès claimed that the look-alikes infringe its trademark. The lower court, however, concluded that Hermès failed to evidence the intent on the part of PLAYNOMORE to piggyback on the Hermès trademark and its attendant goodwill. Of course, Hermes appealed, and ultimately won. The issue of knock-offs in the South Korean market is a real issue that plagues domestic brands. It also tarnishes the reputation of Seoul as Asia's main fashion capital along with Tokyo and Shanghai. So the Supreme Court's ruling is a timely signal that the South Korean law would do its part in protecting intellectual property rights in fashion.

Let's unpack the ruling the Supreme Court of Korea issued. As I noted above, the panel characterized the issue as that of unfair competition rather than trademark infringement. Why? It seems to me that the judges acknowledged that the addition of playful images can potentially be seen as transformative, thereby knocking off the direct infringement claim under the current South Korean law. However, the judges seem to be vexed by the fact that there is a foul play in terms of commercial morality. So the judges took a different approach and concluded that PLAYNOMORE's bags and its methods of marketing amount to stealing the goodwill Hermès has painstaking built over the decades in the international marketplace. Indeed, it would be hard to deny that the shape of PLAYNOMORE bags are highly evocative of a Hermès Birkin or Kelly. 

Another reason why the Supreme Court of Korea resorted to unfair competition laws is that trademarks concern with a protected mark's source-identifying capacity. From the standpoint of consumer confusion, consumers who are familiar with the brands would not think that the cartoon-eye look-alike bag was designed by Hermès. The Court also took note of the fact that the price differential between the two goods does not justify what PLAYNOMORE is doing in the market - the free-riding of goodwill. 

Having said this, I think this decision is a wonderful example of legal realism in play. Top law firms in Korea were retained for this lawsuit. I presume that a lot of time, money, and effort went into the lawsuit, which began in 2015. The three-judge panel in the Supreme Court of Korea reversed the lower court ruling because they did not want PLAYNOMORE to walk away without paying for the consequences of its condemnable actions. Therefore, the judges addressed the issue under the South Korean competition laws because they were unable to reach the conclusion they wanted under the current South Korean trademark regime. The ruling will have a far-reaching consequence in the fashion industry. No one will be legally excused if he or she steals the goodwill of others.