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Leather Workshop Supporting Production of Fake Luxury Goods Violates the Unfair Competition Prevent

Leather Workshop Supporting Production of Fake Luxury Goods

Violates the Unfair Competition Prevention Act

- The Korean Intellectual Property Office (KIPO) will proactively react to increased unfair competition related to product form imitations -

Recently, luxury products have become more and more popular, especially among young people called the “L-generation” (Luxury Generation). Taking advantage of this situation, some leather workshops are enthusiastically imitating famous designs rather than pursuing their own creative activities.

In particular, it appears that there are workshops that advertise completed fake bags that imitate the form of luxury products, run courses where students directly try to make such fake bags, and sell semi-assembled assembly kits for a profit.

It is understood that a combination of factors, such as the reduced number of students due to Corona-19 situation, thereby becoming more difficult to invest time and money into new creations, and the phenomenon of young people’s preference for luxury products, has led to such workshop business form which can easily make a profit.

However, this kind of business is not only likely to violate the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter referred to as the "Unfair Competition Prevention Act"), but it also has grounds for conflicting with the Trademark Act and the Design Protection Act, so it requires particular attention.

As a result of an investigation by KIPO, if it is determined that such a business action violates the Unfair Competition Prevention Act, it may receive a recommendation for correction, and if it is prosecuted, it will be punishable by imprisonment for not more than 3 years or a criminal penalty of not more than 30 million won.

Referring to the types of reports received by the Unfair Competition Action Report Center of KIPO, there was a large number of product form imitation and appropriation of ideas, and in particular, there has recently been a sharp increase in the number of reports related to product form imitation.

In particular, regarding reports that the Reporting Center received at the beginning of June, the number of reports related to product form imitation by leather workshops were about 2.6 times higher than in the same period the previous year.

Meanwhile, by type of declarant, small and medium-sized enterprises and individuals accounted for 85% of total reports. Thus, in KIPO's own evaluation, an administrative search system concentrating on product form imitation or idea extortion is positioned as a useful remedy for protecting rights for economically vulnerable people.

Reporting status of reporters

Type of reporting by SMEs (reporter)

Type of reporting by individuals (reporter)

*Aug. 30, 2017 – Jun. 10, 2020

The Chief of the Industrial Property Research Division of KIPO said, "Recently, due to the effects of Corona-19 combined with an increase in preference for luxury products, there has been a significant increase in product form imitation acts that disturb the order of sound transactions" and added, “Since it is an act of free-riding on the fame of a product that others have developed at a high cost and time, KIPO plans to strictly and proactively respond to unfair competition acts such as product form imitation.”

[Source: KIPO]

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