[Essential Intellectual Property] Robocar Poli Counterfeit Boldly Sold in Chinese Mart... What Is the Lawsuit Outcome?

③How to Protect My Trademark Rights Abroad
Roy Visual Faces Trademark and Copyright Infringement in China
China Strengthens Crackdown on Malicious Trademark Squatting
"Trademark Brokers Focus on SMEs and Emerging Brands"
Prior Registration and Monitoring Needed When Expanding Overseas

Domestic animation 'Robocar Poli'

[Asia Economy Reporter Kim Bo-kyung] A large number of counterfeit versions of the famous Korean toy "Robocar Poli" were discovered at a supermarket in Shandong Province, China. Not only the product packaging but also four types of car toys were identical in shape to "Amber, Roy, Poli, and Helly." Robocar Poli's manufacturer, Roi Visual, filed a trademark and copyright infringement lawsuit worth 80,000 yuan (approximately 15 million KRW) against Fangzhou Yigou Mart, which sold these counterfeit products.

What was the outcome? In May 2020, a Chinese court ruled in favor of the original copyright holder, Roi Visual. Sohee Kwak, a researcher at the Korea Intellectual Property Protection Agency, analyzed, "This was possible because rights were secured through a dual system of trademark registration (August 2006) and copyright registration (November 2015) within China." If Roi Visual had only registered the trademark, it would have been difficult to impose sanctions even if the packaging box label was cleverly altered and the product continued to be distributed. The sufficient collection of evidence necessary to claim copyright infringement also contributed to the victory. The regrettable point was that the court awarded only 7,000 yuan (about 1.3 million KRW) in damages because Roi Visual failed to prove how much loss it suffered due to the counterfeit sales. Nevertheless, this case is considered a significant precedent as it confirmed that selling counterfeit products in China can lead to disadvantages.

◆China Strengthens Crackdown on Malicious Trademark Squatting= Recently, China has been making strenuous efforts to shed its notorious image as a "Republic of Counterfeits." There is a trend to expand intellectual property rights protection across society, including raising the punitive damages cap for trademark infringement from three times to five times the actual damages. Furthermore, malicious trademark squatting without intent to use can be rejected from the examination stage, and anyone can file objections or invalidation trials against such trademarks. This is interpreted as a move to prevent administrative waste caused by trademark disputes and to enhance the country's image.

Patent attorney Lee Jong-gi (Junggwa Patent Law Office), a former trademark examiner at the Korean Intellectual Property Office, said, "China is strongly cracking down on malicious trademark squatting to reduce unnecessary friction with foreign countries amid the US-China trade dispute." He added, "Last year, China conducted a special campaign to crack down on malicious trademark squatting. Companies caught were subject to public disclosure of their names, tax audits, and exclusion from government support projects." He also noted, "Previously, Korean companies hesitated to file lawsuits when trademarks were squatted in the Chinese market due to concerns about unfavorable court rulings, but now the environment has improved enough to actively consider legal action."

In 2019, a trademark trading site operated by Kim Gwangchun. When clicking on the Harim trademark, the trademark sale price (30,000 yuan) and Kim Gwangchun's contact information appeared.
[Image source= Korean Intellectual Property Office]

◆Kim Gwang-chun, Who Filed 800 Trademarks, Goes 'Quiet'... Beware of Damage in Southeast Asia= The recent decrease in activities of trademark broker Kim Gwang-chun, who had troubled Korean companies, is also related to these moves by the Chinese government. A trademark broker refers to a habitual suspected trademark infringer who files three or more trademarks related to Korean companies overseas. According to the Korean Intellectual Property Office, Kim Gwang-chun has stopped unauthorized squatting of Korean companies' trademarks under his name since last year.

Known as an ethnic Korean in China, Kim Gwang-chun had established 10 paper companies and filed over 800 trademark applications in China. He targeted food service franchises such as Paris Baguette (SPC), Sulbing, Ggoji Sake, and Tteokdam, registering similar trademarks. His method was to squat on trademarks and resell them to third parties or demand fees from Korean companies. In 2019, he operated a trademark trading site where clicking on the Harim trademark showed a sale price of 30,000 yuan and his contact information.

Of course, Korean companies still suffer from trademark infringement issues in China. According to the Korean Intellectual Property Office, as of last month, the number of new trademark brokers in China increased by 127 compared to the same month last year. An official explained, "Trademark brokers mainly target small and emerging brands that are relatively vulnerable to legal responses, focusing on Hallyu-centered industries such as food, cosmetics, and franchises." He added, "Rather than indiscriminately squatting on many trademarks, the trend is to register one trademark diversely by product classification."

It is also important to note that as more companies expand into Southeast Asia riding the Korean Wave boom, trademark infringement and squatting damages are spreading beyond China to neighboring countries.

◆"Rapid Trademark Application, Monitoring, and Management Are Essential"= Experts advise businesspeople, "Once the trademark sign and product to be applied for are confirmed, the application process should be carried out promptly." If products launched domestically are disclosed overseas in real-time through online platforms, the risk of unauthorized squatting by trademark brokers increases. Once unauthorized squatting occurs, overseas business expansion may be delayed, causing losses; therefore, applying for trademarks in China from the business preparation stage is essential. It is necessary to check whether the company's trademarks are pre-registered or in use in the countries planned for expansion, not just China. If someone maliciously registers trademarks without permission and squats on rights, objections or invalidation trials should be filed to recover the rights.

Even after trademark registration, regular monitoring for unauthorized use should be conducted, and for malicious users, certified letters and warning notices should be sent to prevent consumer confusion.

The Korean Intellectual Property Office provides customized consulting through patent firms and experts to help companies preparing for overseas expansion cope with intellectual property disputes. The office's support for trademark and design response strategies has expanded from 87 cases in 2020 to 138 last year and 150 this year. Iconix, the animation content producer famous for Pororo, used this support program to establish a strategy against unauthorized trademark squatting in China and filed 29 invalidation trials, winning 25 cases.

This content was produced with the assistance of AI translation services.