Background of the case
Louis Vuitton is a company that operates in 50 countries with more than 460 stores worldwide. It is a part of Meet Hennessy Louis Vuitton (LVMH) Group. Its products are advertised in various countries under the said trademark. In addition to the name “Louis Vuitton” as a trademark its initials “LV” as used as the trademark since 1890.
Louis Vuitton Dak is a South Korean fried chicken restaurant based in Seoul owned by Kim. The restaurant's name is a play on the Korean word tong dak, which means "whole chicken." The logo of the restaurant also bore a striking resemblance to the French fashion house's signature monogram. Louis Vuitton saw resemblance as an issue that would inevitably lead to customer confusion and sent the restaurant a cease-and-desist letter. In September 2015 this case was taken to court alleging the violation of the “Unfair competition Prevention and Trade Secret Protection Act”. In addition to the name infringement, the restaurant's logo and packaging closely mirrored the designer's iconic imagery.
Court decision
The Court while deciding the case considered the long duration the mark was used for/infringed, and the deliberate intention with respect to infringement activities. Louis Vuitton demanded a complete change of the name and the Seoul Central District Court ordered the restaurant owner to pay close to $12,750 a day to the fashion brand for 29 days that the amended name was displayed. The restaurant was ultimately hit with another 14.5 million fine for non-compliance, after changing its name immediately after the first ruling to LOUISVUI TONDAK.
Curse of big brands
The reality is that cases such as this one are numerous and their number will keep increasing in the upcoming years. According to the data compiled by the Korea Customs Service, about 467.9 billion won worth of counterfeit bags, or 1,866 cases, were seized from January 2017 to August last year. Louis Vuitton was the most frequent victim of counterfeiting, followed by Chanel, Gucci, and Hermes [1]. The local fashion industry also predicts that the number of knockoffs has increased during the pandemic since people chose to secretly buy and sell the copies through social media platforms.
As start-up culture grows, entrepreneurs are always looking for ways to get a quick boost ahead of their competition. Taking advantage of the success of established brands such as LV through similar imagery and names attracts immediate consumer attention and curiosity, thus gaining wider recognition for the business when it first opens its doors. However, small businesses shouldn’t forget that by mimicking a registered trademark they are infringing on the brand’s intellectual property rights, which will most likely cost them more in the long run compared to relatively small gains in the beginning.
[1] https://lifestyle.inquirer.net/396117/south-koreas-counterfeit-market-is-very-much-alive/
FAQs - Louis Vuitton vs Louis Vuiton Dak
1. What are the key factors courts consider when determining if a business name infringes on a well-known trademark?
Courts consider several key factors to determine if a business name infringes on a well-known trademark. These include the similarity between the trademarks in terms of visual appearance, sound, and meaning. They also assess the similarity of the goods or services offered under the trademarks, the market channels used, and the likelihood that consumers could be confused or misled about the origin of the products. In the Louis Vuitton Dak case, the court scrutinized how closely the restaurant’s name and logo resembled Louis Vuitton’s established brand, taking into account the fashion house’s strong market presence and the potential for consumer confusion.
For businesses navigating trademark issues, using tools like Trama’s trademark search and monitoring services can help identify potential conflicts early and ensure your brand is protected.
2. What are the typical consequences for a business found guilty of trademark infringement involving a well-known brand?
The typical consequences for a business found guilty of trademark infringement against a well-known brand can be severe. In the Louis Vuitton Dak case, the restaurant faced significant financial penalties, including a daily fine for the period the infringing name was used and additional fines for non-compliance. Beyond financial penalties, businesses may also be required to cease using the infringing name and go through a complete rebrand.
3. How does the increase in counterfeit goods and trademark infringement impact established brands and their legal strategies?
The rise in counterfeit goods and trademark infringement significantly impacts established brands, compelling them to adopt more aggressive legal strategies. Brands like Louis Vuitton frequently invest in monitoring and enforcement measures to protect their intellectual property. This includes pursuing legal action against counterfeiters and businesses that infringe on their trademarks. The increased prevalence of counterfeiting, amplified by factors such as the pandemic and the rise of online marketplaces, drives brands to enhance their vigilance and invest in sophisticated anti-counterfeiting technologies to safeguard their market position and brand integrity.
