[비즈한국] Intellectual property is a general term encompassing industrial property rights such as trademarks, patents, and designs, as well as copyrights for literary, musical, and artistic works. While its importance has grown with the rise of the Fourth Industrial Revolution, it is still often perceived as a niche, professional field. "Proving the existence" of intangible intellectual property is no easy task. This series introduces the latest trends in intellectual property and provides guidance on how small and medium-sized enterprises or individuals can prepare and respond to protect their brands.
The war to claim the 'LX' trademark has begun. When the new holding company of advisor Koo Bon-joon, which is set to spin off from LG Group, announced its intended name as LX, the Korea Land and Geospatial Informatix Corporation (LX), whose English abbreviation is also LX, signaled a strong legal battle, including filing for an injunction to stop the use of the name, citing trademark infringement.
From March 2 to March 11, LG applied for 107 trademarks, including LX, LX International, LX Hausys, LX Semicon, LX MMA, and LX Pantos. Given these filings, the new holding company is expected to be named LX Holdings, with its affiliates including LX International (formerly LG International), LX Hausys, LX Semicon (formerly Silicon Works), LX MMA, and LX Pantos. Having applied for priority examination for all 107 cases, this reflects a strategy common to large conglomerates: comprehensive trademark filings for rapid protection of rights.
Last year, a naming dispute between Korea Technology Co., Ltd.053590 and Korea Technology Group000240 ended with the latter abandoning its name and rebranding as Hankook & Company. In that case, it was determined that the trade name of Korea Technology Co., Ltd. was widely recognized domestically, and since both companies included "Korea Technology," the names were highly similar. Furthermore, as their business areas overlapped significantly, the core of the dispute was the prohibition of the use of trade names for fraudulent purposes under the Commercial Act and the prevention of unfair competition under the Unfair Competition Prevention Act.
In the current dispute, it may be difficult to apply the Commercial Act and the Unfair Competition Prevention Act, considering that the trade names (other than LX) are significantly different, it is difficult to judge that the name LX is widely recognized, and only a portion of LX Hausys's business overlaps with that of the Korea Land and Geospatial Informatix Corporation. Therefore, it is expected that this case will lean more toward Trademark Law, unlike the Korea Technology case.
'Two-letter alphabets' lack inherent distinctiveness… registration depends on public recognition
To predict the outcome of the naming dispute between the Korea Land and Geospatial Informatix Corporation and LG, two factors must be considered: whether the public corporation's "LX" functions as a source identifier, and whether there is an intersection in the business areas of the two parties.
First, Trademark Law generally denies distinctiveness to trademarks consisting of only two English letters, labeling them as simple and common signs. In other words, two-letter English initials lack the ability to distinguish one's goods from another's and must remain free for anyone to use, thus they are ineligible for trademark registration. SK, LG, GS, CJ, and KT also cannot, in principle, be registered or monopolized by anyone. For this reason, all of the LX trademarks recently filed by LG incorporate logos. The goal is to first secure trademark rights through logos and then acquire distinctiveness for "LX" through actual use.
However, even marks that lack inherent distinctiveness can be registered under certain circumstances. If they become famous, the situation changes. In other words, through continuous use, a trademark can become famous, and general consumers may come to recognize it as a identifier of a specific source. In such cases, trademark registration and exclusivity become possible.
What about LX? If the public institution LX were as widely known as SK, LG, GS, CJ, or KT, it would be obvious that it could secure trademark registration. Because it would be the name of a famous public institution, it could exclude others from registering the trademark regardless of the business area (Article 34(1)(iii) of the Trademark Act), and the use of the name by others could be prohibited (Article 2(1)(b) and (c) of the Unfair Competition Prevention and Trade Secret Protection Act). In short, if the "LX" trademark were famous, all of LG's LX trademark applications would be rejected, and LG's use of the trademark would also be restricted.
However, the current level of recognition for LX seems relatively insufficient compared to that of SK, LG, GS, CJ, or KT. Therefore, it is difficult for the trademark efficacy of LX to extend to areas unrelated to the Korea Land and Geospatial Informatix Corporation. That said, the 2014 amendment to the Trademark Act relaxed the conditions for acquiring distinctiveness through use from "significantly recognized" to "identifiable as indicating a source," meaning that if it is recognized to some extent in a specific field, it can be registered for that field.
Given that the Korea Land and Geospatial Informatix Corporation has been registering and managing trademarks containing "LX" since its days as the Korea Cadastral Survey Corporation (renamed in 2015), and has continuously operated and promoted the "LX" brand in the field of cadastral surveying, it is highly likely that "LX" would be judged as identifiable as a source in the corporation's business areas, such as surveying, urban planning, and geographic information services. Consequently, the Korea Land and Geospatial Informatix Corporation appears likely to maintain a monopoly on "LX" within its specific business sectors.
Time is on the side of the conglomerate with growing recognition; the Korea Land and Geospatial Informatix Corporation must act quickly
Ultimately, the issue may only arise in areas where LG’s business overlaps with that of the Korea Land and Geospatial Informatix Corporation. If it is determined that LX Hausys's business (construction) is identical or similar to the surveying and urban planning sectors, then the LX Hausys trademark could be considered an infringement of the Korea Land and Geospatial Informatix Corporation's trademark rights.
In a trademark infringement lawsuit, LG would strongly argue that the LX brand itself lacks inherent distinctiveness and that the business areas are different, while the Korea Land and Geospatial Informatix Corporation would argue the opposite—that it has acquired distinctiveness through use and that there is a correlation between the business areas. While the judgment may depend on the degree of evidence, if both the distinctiveness of LX itself and the correlation between the two businesses are acknowledged, it is highly likely that the LX Hausys trademark would be judged to infringe on the public corporation's trademark rights. In that case, LG would either have to pay royalties to use "LX" for its construction business or abandon the trademark in those sectors.
Meanwhile, time seems to be on the side of LG, the conglomerate, rather than the Korea Land and Geospatial Informatix Corporation. Considering the massive advertising and marketing power of a large conglomerate, increasing the public's recognition of the new group's "LX" is only a matter of time. If that happens, the possibility of general consumers quickly identifying the "LX" mark with the new holding company increases, further complicating the situation. Under certain circumstances, the LX trademark of the Korea Land and Geospatial Informatix Corporation and the LX trademark of LX Hausys could end up coexisting. This is precisely why the Korea Land and Geospatial Informatix Corporation must respond to the naming dispute more aggressively.