[Exclusive] Hanssem’s ‘Subcontractor Abuse Controversy’: Fair Trade Commission Finds Fault, Court Dismisses Lawsuit

[비즈한국] A subcontractor of Hanssem009240 filed a damages suit against the company, claiming it was "pushed to the brink of bankruptcy by the power abuse of a large corporation," but the case was dismissed. Last month, regarding the same incident, the Fair Trade Commission (FTC) ruled that Hanssem had violated the Fair Trade Act (Related article: [Exclusive] Hanssem received a 'warning' from the FTC for 'power abuse' against a subcontractor). The subcontractor stated it would "appeal immediately," while Hanssem filed an administrative lawsuit against the FTC, arguing that the commission’s ruling was unjust.

Ozen, a former subcontractor for Hanssem, filed a damages suit against Hanssem but it was dismissed. Photo = Reporter Lee Jong-hyun

Subcontractor: “Unilateral refusal to renew trademark contract” vs. Hanssem: “Unauthorized use of trademark damaged brand image”

On the 13th, the Ansan branch of the Suwon District Court dismissed the damages suit filed by Ozen Co., Ltd. against Hanssem and ruled in favor of the defendant. The court stated, "The plaintiff's claims are dismissed, and the litigation costs are to be borne by the plaintiff."

Ozen, formerly a subcontractor for Hanssem, filed a lawsuit for 8 billion won in damages in October 2023, claiming that Hanssem's "power abuse" had caused massive losses, leaving the company on the verge of bankruptcy. Ozen had initially claimed 3 billion won of that amount due to the financial burden of legal fees. A representative from Ozen who met with reporters at the court said, "We plan to review the written judgment thoroughly once we receive it, and we will prepare to appeal immediately."

Since 2019, Ozen had been selling products like vacuum blenders under the name "Hanssem Ozen" through a trademark contract with Hanssem. However, conflict arose between the two companies in 2021 during the development and sales process of an air sterilizer.

Ozen claims that in July 2021, Hanssem approved the use of the trademark for the air sterilizer and drafted a letter of intent to purchase 20,000 units, prompting the company to begin development. Ozen further argues that in February 2022, Hanssem promised to directly purchase 4,000 units, but after mass production and delivery began, Hanssem unilaterally refused to renew the trademark contract. Ozen claimed that this made it impossible to sell the inventory bearing the "Hanssem Ozen" brand, resulting in enormous losses.

On the other hand, Hanssem countered that the contract expiration was a legitimate termination of trademark rights, alleging that Ozen had used Hanssem's trademark without authorization, causing significant damage to the Hanssem brand image.

Last month, the FTC ruled that Hanssem’s unilateral refusal to renew the trademark contract and refusal to purchase products were violations of the ‘Monopoly Regulation and Fair Trade Act.’ Hanssem has filed an administrative lawsuit against the FTC. Photo = Reporter Park Jung-hoon

Hanssem challenges FTC’s ruling of ‘subcontracting abuse’

Alongside the damages suit, Ozen had previously filed for a provisional seizure of 14 billion won against Hanssem's headquarters in Sangam-dong, the Bangbae-dong office building, and the Hanssem Design Park Bangbae branch. Hanssem, which was preparing to sell its office building, stated that "the provisional seizure would not affect the sale," but as the sale process stalled, they eventually applied for a release deposit (depositing a certain amount to lift the seizure) and canceled the seizure in June last year. Subsequently, Hanssem sold its Sangam-dong headquarters to Gravity Asset Management.

In January, the FTC ruled that the incident between Ozen and Hanssem constituted "subcontracting abuse" by Hanssem. Ozen had reported Hanssem to the FTC in 2023 for abuse of dominant market position. Last month, the FTC determined that Hanssem's unilateral refusal to renew the trademark contract and refusal to purchase products violated the "Monopoly Regulation and Fair Trade Act," issuing a "warning." Disagreeing with the FTC’s decision, Hanssem skipped the objection process and filed an administrative lawsuit directly.

Hanssem explained, "Hanssem complies with the Fair Trade Act and continues to pursue mutual growth and cooperation with our agencies and partners. However, Ozen engaged in illegal activities, making it impossible to continue our contract and business relationship." The company added, "We believe there was no violation of the Fair Trade Act in our dealings with Ozen, and we initiated the administrative lawsuit to present a stronger objection. We respect the court's ruling and will do our best to become a more transparent and trusted company in the future."