IKEA, disputes with a domestic company in Korea

IKEA, which is the largest furniture distributor in the world with its head office in Sweden has opened its first store of Korea in Gwangmyeong City in December 2014. IKEA’s fresh service such as cheap prices, many various kinds of furniture and DIY etc. has been attracting lots of consumers in Korean market that sold only finished products.

< IKEA's trademark >
intomark.com / WIPS trademark database

 Disputes with domestic companies in Korea

Mr. A, who is a representative of the Korean furniture company, MarketB, registered the company in 2006 under the brand name 'IKEAB' and run the online shopping mall with the same name. (ikeab.com/ ikeab.co.kr)

In response, IKEA sent a warning letter to MarketB twice in 2009 even before IKEA entered Korea. The warning was that MarketB should not use the domain and pass it to IKEA. MarketB accepted the warning of IKEA and the domain was transferred to IKEA in 2010. Meanwhile, MarketB has been accused of imitation using a very similar phrase as the trademark of the popular series of IKEA.

flickr.com © Michell Zappa

 IKEA's lawsuit against the act of unfair competition,

Inter IKEA Systems, a holding company and intellectual property right of IKEA in 2015, demanded that IKEAB discontinue the sale of products subject to trademark infringement. In addition, it was also problematic to sell similar products of parallel imports from OEMs and ODMs. However, MarketB rejected the request and announced that they would face the opposition, and the dispute between the two companies deepened. Eventually, in 2016, IKEA filed a lawsuit against the MarketB to ban the act of unfair competition. In the lawsuit, IKEA insisted that it should compensate for damages caused by trademark infringement.

market.kr / IKEAB's website

 MarketB’s refutation and first judgment,

MarketB denied that IKEA's trademarks are not widely recognized in Korea at the time when MarketB sell their products, and IKEA's products are produced by OEM and ODM, so they do not have exclusive design rights. It can’t be seen as an act of unfair competition. Last year, the First Tribunal decided that IKEAB of MarketB just added the one alphabet to the IKEA trademark, which made it difficult to give a new meaning and made customers confusing. In addition, the First Tribunal ruled that other items, other than those sold first by the MarketB, are subject to the act of unfair competition and MarektB should compensate 12 million won to IKEA.

blog.daum.net/ ikeab
<IKEAB's blog which is not running at present>

 Unfinished courts of both sides,

IKEA appealed against the partial winning. MarketB is strongly opposed to IKEA, saying that their products are similar to IKEA but they are different and assemb in different way, and IKEA, a giant corporation, seems only to take advantage of SMEs in Korea. The appeal will be held on the 22nd of this month. It is noteworthy how the lawsuits of IKEA and Korean small-sized furniture companies will result.