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Hermès Prevails in Years-Long Fight Over Lookalike Bags in Korea

Post Time:2020-07-23 Source:www.thefashionlaw.com Author: Views:

In a long-running fight over lookalike handbags, Hermès has been handed a win. For the past five years, the Paris-based luxury brand has been facing off against PLAYNOMORE, a popular Korean handbag bag company known for its cartoon-eye bags, which Hermès claims make unauthorized use of its legally-protected Birkin and Kelly bag designs. Following an unsuccessful round before the Seoul High Court, the Supreme Court of Korea has sided with Hermès, holding that PLAYNOMORE’s handbags amount to unfair competition.

In a decision late last week, a panel of judges for the Supreme Court of Korea determined that PLAYNOMORE’s handbags do, in fact, run afoul of the Unfair Competition Prevention and Trade Secret Protection Act, which  prohibits companies/individuals from “causing confusion with another person’s goods by using signs identical or similar to another person’s name, trade name, trademark, container or package of goods or any other sign widely known in Korea as an indication of goods.”

The law also bars companies/individuals from “infringing on other persons’ economic interests” by piggybacking on the goodwill of their brands that has resulted from “substantial investment or efforts.”

Similar to a trade dress case in the U.S., Hermès essentially argued that in recreating the distinctive designs of its most famous bags, such as the source-identifying three lobed flap design that fits around the base of the handle, padlock closure at its center, key fob affixed to a leather strap, and thin horizontal strap that fits over the flaps of its Birkin bag, PLAYNOMORE was in breach of Korean unfair competition law, and the court agreed.

“If PLAYNOMORE continues to produce and sell the same products as Hermès in Korea, some demand for Hermès products may be substituted [with PLAYNOMORE products],” the court held in its June 10 decision, as first reported by the Korea Herald. Alternatively, “Potential consumers may give up on purchasing Hermès products due to the decline of scarcity and value in Hermès’ products” as a result of PLAYNOMORE’s products.

unfair competition

The country’s highest court was seemingly not persuaded by the fact that PLAYNOMORE’s handbags retail for roughly 400,000 won ($333), which is significantly less than the $12,000-plus prices associated with new Hermès Birkin and Kelly bags. Moreover, it did not place significant weight on PLAYNOMORE’s addition of sequined eye designs on its bags, something that the Seoul High Court cited in its decision in favor of the Korea handbag brand.

In the previous round, the Seoul High Court held that PLAYMORE’s unique “eyes” design was a key element of the bags’ identity, and the popularity of its products among consumers. According to its decision in early 2017, “Taking into consideration the creativity, uniqueness, the details of production, and the cultural values of the bags altogether, PLAYNOMORE’s products have achieved their own version of originality and aesthetics by incorporating various rare images together.”

The decision from the Seoul High Court served to overturn a previous win for Hermès at the district court level.

Hermès appealed the decision of the Seoul High Court, prompting the Supreme Court of Korea to take up the case and ultimately, rule in favor of Hermès whose Birkin and Kelly bags are some of the most famous in the world.

The latest outcome in the case, which will now be sent back to the Seoul High Court for further determinations, “will have a heavy impact on the fashion industry,” an official from the Supreme Court said. This is particularly true, according to Seoul-headquartered Yulchon LLC’s Dong Soo Han, Jeong Hoon Hwang, who note that, to date, “there are no clear tests for determining a violation of Paragraph J [of the Unfair Competition Prevention and Trade Secret Protection Act] in a case involving the design and shape of a product.” Paragraph J bars companies/individuals from “infringing on other persons’ economic interests” by piggybacking on the goodwill of their brands that has resulted from “substantial investment or efforts.”

With that in mind, the case – and the Supreme Court’s decision – “is especially noteworthy as a significant contribution to the development of the court’s standards for determining the merit of a claim under the new Paragraph J.”