As the online shopping market grows rapidly, various forms of e-commerce models have emerged. Among them, “Purchasing Agencies” (buying agents or proxy shopping services) are the ones that frequently brush against the fundamental principles of trademark law.
While “Purchasing Agencies” and “Direct Overseas Purchase” (Cross-border shopping by individuals) are conceptually similar, they are distinguished in practice.
- Direct Purchase: An individual buys a product directly from an overseas mall. If direct shipping isn’t available, they use a shipping forwarder.
- Purchasing Agency: The operator runs an online mall that displays and advertises products. They collect the customer’s Personal Customs Clearance Code, place the order on the overseas site on behalf of the customer, and have it shipped directly to them. Externally, it looks like an individual purchase, but the interface is a domestic shopping mall.
Since these agencies provide detailed product pages, photos, and even customer reviews, they differ significantly from a simple individual purchase. While an individual buying a small amount for personal use is generally not considered patent or trademark infringement (as infringement requires use “as a business”), operating a shopping mall with product displays is viewed differently. It is no longer considered personal use.
I would like to introduce a recent court ruling regarding trademark infringement issues related to these purchasing agencies.
The Case: The Purchasing Agency Model (Daegu District Court, Apr. 22, 2022, Case No. 2021No2551)
The defendant operated a purchasing agency mall via Naver Store Farm, selling products sourced from China. Unfortunately, the products turned out to be counterfeits. When indicted for trademark infringement, the defendant raised three main arguments:
- “Purchasing agency services do not constitute ‘selling,’ so I did not ‘use’ the trademark. Thus, no violation.”
- “I sold genuine goods, so there is no violation.”
- “Even if they were not genuine, I didn’t know. Therefore, there was no intent.”
Many purchasing agency operators rely on these arguments to avoid liability, believing that the agency model is a loophole in trademark law. However, the Daegu District Court ruled otherwise.
The Court’s Judgment
1. On Trademark Use
The court ruled that displaying or advertising a trademark identical or similar to a registered trademark constitutes the “use” of a trademark. This use constitutes infringement.
“It is not necessary to determine whether the purpose of the advertisement using the trademark was for the sale of the goods or merely for a purchasing agency service. Therefore, the defendant’s claim of innocence on the grounds that they only acted as an agent and did not ‘sell’ the goods cannot be accepted.”
2. On Genuine Goods vs. Counterfeits
Advertising genuine goods generally does not constitute infringement, even without a separate contract with the trademark holder. However, in this case, the 25 items advertised were confirmed to be counterfeits (based on counterfeit confirmation letters submitted as evidence). Therefore, the defendant’s claim that the goods were genuine was rejected.
3. On Intent (Willful Negligence)
In criminal trademark cases, “intent” is required. However, the court ruled that “Willful Negligence” (Dolus Eventualis) is sufficient to establish intent.
The court noted:
- The defendant sourced goods from a Chinese site (‘C Site’) where counterfeits are commonly sold.
- The defendant made no effort to verify the authenticity of the goods.
- When customers asked if the products were genuine, the defendant replied, “It is difficult to determine authenticity for overseas purchasing agency products,” effectively telling customers to judge for themselves.
Viewing these circumstances, the court concluded that the defendant had an attitude of “it doesn’t matter if they are fakes,” which constitutes willful negligence.
Legal Analysis: Why Purchasing Agencies Are Not Exempt
Unlike simple direct purchases, purchasing agencies are effectively treated the same as general online shopping malls.
- Display is Use: Advertising products for a purchasing agency is a form of trademark use.
- Liability: If the product is genuine, there may be no issue. If it is counterfeit, it is trademark infringement.
- Duty of Care: You cannot claim ignorance. Operating a business imposes a duty to verify authenticity.
A Note on “Genuine Goods” and Territoriality
It is also crucial to define “Genuine Goods” carefully.
Generally, if the trademark holder in the exporting country and the importing country (Korea) are the same, or have a legal relationship, the goods are considered genuine (Parallel Import).
However, trademark infringement can still occur if:
- Counterfeit Re-importation: Fake versions of famous Korean products are sold in China and then re-imported to Korea.
- Different Rights Holders: Trademark rights are territorial. A product might be “genuine” in China (produced by the Chinese trademark holder) but “infringing” in Korea if the Korean trademark holder is a completely different, unrelated entity.
Strategic Response and Compliance
If you are operating a purchasing agency or dropshipping business, prior due diligence is mandatory.
- Verify the Rights Holder: Check if the trademark holder in the source country matches the rights holder in Korea. If they are different and unrelated, importing the goods may be infringement.
- Verify the Product: Especially when importing from markets known for counterfeits, assume the risk is high. If a product infringes on a patent or trademark registered in Korea, it is considered a counterfeit/infringing good regardless of its status abroad.
This ruling is significant because it clarifies that advertising for the purpose of a purchasing agency is indeed a “use of trademark” subject to the full weight of the Trademark Act.
Sarang Patent & Law Office We provide expert legal counsel on intellectual property disputes and cross-border trademark strategies.
(Disclaimer: This post is for informational purposes only and does not constitute specific legal advice. Please consult with a professional attorney regarding your specific case.)
