On March 20, 2023, a bill amending the Korean Trademark Act ("Bill") was submitted to the National Assembly. Importantly, the Bill aims to introduce a system that would permit the use of consent letters to overcome citations of senior trademarks ("Letter of Consent System"), which is a development that has long been awaited by trademark practitioners. Below sets forth further details.

Under the current Trademark Act, a trademark which is similar to another party's senior mark cannot be registered for the same or similar goods. Even if the applicant submits a letter of consent signed by the owner of the senior mark to the Korea Intellectual Property Office ("KIPO") expressly permitting the registration of the later-filed mark, KIPO will not accept the letter. As a result, where two parties amicably agree to the co-existence of their trademarks in Korea, the parties must pursue an assignment/re-assignment strategy ("Assign-Back Strategy"), in addition to entering into a co-existence agreement. Under the Assign-Back Strategy, the junior mark which was preliminarily rejected (or the cited senior mark) is temporarily assigned to the other party so that the marks will be owned by the same party. Once the rejection ground has been overcome and the applied-for mark is registered, the temporarily assigned mark is then re-assigned back to the original owner.

As one may expect, the current practice described above is significantly inefficient in terms of cost, time and procedure. It is also misaligned with the system of many of other jurisdictions which also examine for conflicting marks but take letters of consent (if submitted) into consideration during examination. Due to such reasons, the need for adopting the Letter of Consent System has been discussed in Korea for many years.

The main purport of the Bill is to (i) reflect the actual trade practices; (ii) mitigate the inconvenience of having to undergo an extra process to register a trademark despite having the consent of the owner of the conflicting mark; and (iii) ease the registrability requirements for trademarks. It is worth noting that, as a protective measure, the Bill also includes a clause providing that if a mark that is registered based on the Letter of Consent System is used for unfair competitive purposes and causes consumer confusion and/or deception, such registration shall be cancelled. Furthermore, the Letter of Consent System will not apply where the parties intend to register identical marks for the same goods.

According to KIPO's statistics, about 40% of all trademark-related office actions issued by KIPO in 2022 involved a rejection based on conflict with a senior mark. Thus, we anticipate that Korea's adoption of the Letter of Consent System will have a significant impact on trademark owners. While a number of additional steps remain to be taken before the Bill is ultimately passed, the Bill is expected to be promulgated by the end of this year.