'Annual Sales of 10 Billion Won' Famous Restaurant Name Used Without Permission… Court Rules "Unfair Competition Act"

Seoul Central District Court / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Seongpil Cho] The appellate court ruled that a restaurant that used the trade name of a well-known local eatery without permission in another region constitutes an act of unfair competition. Regardless of whether the trade name was acquired through public knowledge, the court recognized the restaurant’s trade name as a product of long-term investment and effort, deeming it a legally protectable interest.

The Civil Division 5 of the Seoul High Court (Presiding Judges Kim Hyung-doo, Park Won-cheol, Yoon Joo-tak) announced on the 26th that it overturned the original ruling and ruled in favor of Plaintiff A, who operates a famous beef rib barbecue restaurant in Busan, in the appeal case against Defendant B, who runs a beef rib barbecue restaurant under the same trade name in Seoul. The court stated, “The plaintiff’s restaurant trade name embodies accumulated reputation, trust in quality, and credit built over more than 55 years, possessing economic value. The defendant’s use of the identical trade name constitutes unauthorized use of another’s achievements for their own business in a manner contrary to fair trade practices and competitive order.”

Since 1964, A has operated a beef rib barbecue restaurant in Haeundae-gu, Busan. Featured in media articles and broadcasts, it grew into a local favorite generating annual sales exceeding 10 billion KRW. However, A discovered that B had been using the same trade name in Seoul since March 2019, operating with similar grills and menus. A filed a lawsuit seeking to prohibit B from using the same trade name, claiming B’s business practices constituted unfair competition, but the first trial court dismissed the claim due to insufficient evidence.

However, the appellate court’s judgment differed. It found that A’s restaurant trade name qualifies as a “legally protectable interest” and that B’s unauthorized use significantly disrupts competitive order. The court noted, “The defendant has failed to provide a reasonable explanation for the circumstances under which they began using the identical trade name,” and “Considering the similarities in signage, grills, and menus, it is reasonable to conclude that the defendant’s restaurant used the same trade name to unfairly capitalize on the plaintiff’s reputation and trust.” Furthermore, the court added, “The two restaurants are in competition or likely to be in competition in the near future, and the defendant’s restaurant is infringing upon the plaintiff’s economic interests.”