100 Billion Market 'Choco Pie', Hit 'Buldak'... The Story of Losing Trademark Rights [Intellectual Property as Competitiveness]

⑦The Importance of IP Seen Through Trademark Loss Cases
Legal Disputes Lead to Trademark Loss
Experts: "Continuous Promotion and Active Response Are Crucial"
"Consistent Use of Typeface and Color in Trademarks Is Essential"
Asia Economy-Seoul National University of Science and Technology Joint Project

There is a name that, despite generating sales worth billions of won, was not recognized as a trademark and thus became freely usable by anyone. That name is "Choco Pie." This is a case where competitors gradually started using the name, and it became widely known to the public as a product name, resulting in the failure to obtain trademark rights.

In South Korea, Orion (then Dongyang Confectionery) first launched a small, round Choco Pie in 1974 and registered "Choco Pie" as a trademark. Orion Choco Pie recorded cumulative domestic sales of about 245.5 billion won by 1990.

As Orion Choco Pie gained popularity, latecomers emerged. Lotte Confectionery began producing and selling Choco Pie products from 1979, recording sales of 186 billion won by 1998. Crown Confectionery sold about 10.5 billion won annually under the "Crown Choco Pie" trademark starting in 1989, and Haitai also sold products under the "Haitai Choco Pie" trademark. Thus, the name Choco Pie was widely used across the confectionery industry. Eventually, the annual market size for Choco Pie exceeded 100 billion won.

The problem arose in the 1990s. Originally, trademark re-registration was required every 10 years, but when Lotte attempted to re-register the trademark, Orion raised objections. Orion claimed that "9 out of 10 people associate Choco Pie with Orion," and that other companies using the name Choco Pie constituted trademark infringement.

However, the court's judgment was different. To conclude, the court decided that not only Orion but anyone could freely use the name Choco Pie. In other words, Choco Pie had already lost its distinctiveness as it was used like a generic product name. The court believed that consumers could sufficiently distinguish the product source by the company names such as Orion, Lotte, Crown, Haitai, etc. The court also found that the general public recognized Choco Pie as "a small round bread snack filled with marshmallow and coated with chocolate."

Strictly speaking, Orion was not the first to make a Choco Pie-style product. Similar products?small round cakes filled with marshmallow and coated with chocolate?had already been developed and sold in the United States since 1917.

"Buldak" (spicy chicken) is another case where the trademark was initially registered but lost its validity after years of litigation between companies. In 2001, Kim, the CEO of Buwon Food in Wonju, Gangwon Province, first registered "Buldak" as a trademark and supplied spicy chicken dishes to its franchise stores. Then in 2003, Hongchowon registered "Hongcho Buldak" as a trademark and became famous as the largest buldak franchise in Korea, prompting Buwon Food to file a trademark invalidation trial, starting the dispute.

The court also ruled not to recognize the trademark rights for Buldak. Although "Buldak" was not listed in dictionaries at the time and was somewhat a neologism, it was widely used as a general term, and newspapers and broadcasts introduced it as a type of spicy chicken dish. Furthermore, a consumer perception survey of 600 adults aged 20 and over showed that 60.3% of respondents recognized Buldak as a generic name rather than a trademark of a specific person.

Cases like Choco Pie and Buldak are said to have become generic terms or have undergone genericide. "Yo-yo," "dry ice," and "App Store" were also initially trademarks but lost distinctiveness and became generic terms. These are cases where the trademark became so famous that other companies or individuals freely used it, resulting in the loss of trademark protection. It can also be seen as the disappearance of the trademark's value.

Stock photo of 'Buldak' not recognized as a trademark.

If trademark rights are not recognized, it becomes difficult to prove infringement in disputes. So how can trademark rights be protected? "Botox," a drug used in dermatology, is commonly used as a generic term but is actually a trademark of a famous pharmaceutical company. This company requests media outlets to use the generic term "botulinum toxin" when reporting on related topics to protect its trademark rights.

Jiwoo Kim, a patent attorney at Daseon Patent Law Office, suggested, "It is important to continuously promote the fact that the name is a trademark and to inform about separate product names." He added, "If a trademark is used without permission as a product name, it is necessary to promptly file a cease and desist claim for trademark infringement and claim damages as soon as it is discovered."

Proper internal use of trademarks within companies is also necessary. Sungwoo Choi, a patent attorney at Woo In Patent Corporation, stated, "Companies themselves must avoid misusing trademarks so that the public does not misunderstand the trademark as a generic name." He advised, "It is necessary to use TM for trademarks under application and ® for registered trademarks, and to consistently use the trademark's font and color to clearly indicate that it is a trademark, not a generic or alternative name for the product."

◆[Intellectual Property is Competitiveness] Closing the Series

Our economy is facing a "triple whammy" of high exchange rates, high inflation, and high interest rates. Due to ongoing low birth rates and aging, the contribution of labor to economic growth is decreasing, and capital input has reached its limits. During his candidacy, Prime Minister Han Duck-soo expressed concern, saying, "The more important issue is the declining potential growth rate," adding, "It has been falling by about 1% every five years, and if it continues, it will reach zero percent." Asia Economy views strengthening intangible assets, especially intellectual property rights, as one of the ways for the Korean economy to escape the low-growth trap. Coincidentally, the new head of the Korean Intellectual Property Office appointed by the new government is Lee In-sil, the third female patent attorney in Korea and a veteran with over 30 years in the intellectual property field, who also chairs the Korea Women Inventors Association. Asia Economy believes that a business structure that properly protects inventions and creations derived from human intellectual activity and utilizes them as revenue sources is necessary, and that now is the time to make such efforts with the new government’s inauguration.

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