BTS, Pengsoo, Girls’ Generation, and Youngtak Makgeolli. These are all brands that the public is familiar with. But these are also well-known trademarks that have been unlawfully seized by others. This kind of problem, malicious trademark squatting, in which individuals preemptively register someone else’s business name or brand and demand a ransom, is a serious issue.

So, what exactly is trademark squatting? A trademark serves as a distinguishing mark for products and services, setting them apart from those offered by competitors. A trademark can take the form of numbers, words, phrases, logos, or even a combination of these elements. You have the option to officially register a trademark under trademark law, and registering a trademark is a crucial method of safeguarding your brand, and offering a higher level of assurance.

However, some individuals overlook the importance of trademark registration and continue to use their trademarks without officially registering them. But if such a person achieves success and their trademark becomes well-known, what happens if someone else registers that trademark? This situation is referred to as trademark squatting. To be exact, according to the World Intellectual Property Organization (WIPO), trademark squatting is a practice in trademark law where an individual or entity registers a trademark that is identical or similar to an established trademark, with the intention of profiting from the reputation and goodwill associated with the established trademark.

In another case, trademark squatting occurs when a brand registers its trademark in its home country and possibly in a few other select countries, neglecting to seek protection in every possible jurisdiction. Trademark squatters identify that the brand does not have a registered trademark in a specific jurisdiction, and they proceed to file for the trademark in that location. This practice persists because trademarks are jurisdiction-specific rights, and brand owners must seek registration in each individual jurisdiction in which they wish to be protected. For instance, the United States Patent and Trademark Office can only protect trademarks registered within the United States.

Trademark squatting can have negative consequences for both businesses and consumers. When someone who engages in trademark squatting registers a trademark that closely resembles an established one, it can cause confusion among consumers and damage the reputation and trust associated with the established trademark. Moreover, trademark squatting can obstruct legitimate businesses from using their own trademarks in specific regions or markets, potentially leading to expensive and protracted legal disputes to regain ownership of the trademark.

Over the past 10 years, cases of trademark squatting have become more and more widespread in South Korea. According to a research titled, “The Limitation of Claims for Damages and Infringement Prevention by Trademark Owners,” conducted by the Korean Intellectual Property Office on 5 October 2022, the annual number of suspected malicious trademark squatting applications between 2015 and 2019 was at about 343 cases. Of these, the actual number of registrations averaged 89 per year, with around 26% of suspected malicious trademark squatting applications being registered as actual trademarks. According to statistics from the Korean Intellectual Property Office (as of 2020), there were 67 individuals suspected of malicious trademark squatting who collectively applied for 23,802 trademarks, averaging 355 trademarks per person. Such actions appear in various forms, ranging from character names, like Pengsoo, to celebrity names, television show titles, YouTube channel names, and restaurant names.

For example, the Educational Broadcasting System (EBS) filed a trademark registration application on Pengsoo on 20 November, 2019, but a third party applied for trademarks related to internet broadcasting, stationery, and toys under the names Pengsoo and Giant Pengsoo on 13 November, 2019, a week earlier than EBS. A dispute ensued, ultimately resulting in the third party relinquishing their trademark rights. In another case, an individual applied for a trademark on Girls’ Generation for over 2,000 products, shortly after the idol group Girls’ Generation debuted in 2007. This led to public controversy and the application was ultimately invalidated due to a legal challenge by SM Entertainment, the agency representing Girls’ Generation.
Furthermore, some individuals have cleverly mimicked both domestically and internationally famous trademarks in their applications. They filed trademarks like Hermes Water, ShoppingMall.com, and Daum Kakao by either closely imitating existing trademarks or making slight variations.

This practice exploits the current trademark law’s “first-to-file” system, which allows the first applicant to secure registration rights, not the “first user.” As a result, individuals take advantage of this system to file applications first, knowing that the famous trademarks of others are not yet registered, intending to later profit from these trademarks through extortion.

To prevent this, the Korean Intellectual Property Office (KIPO) has been actively monitoring and maintaining a list of suspected malicious trademark squatters, and strengthening its review of applications that are suspected of trademark infringements in order to address malicious trademark squatting.