SEOUL, Feb. 2 (Korea Bizwire) — Membership-only warehouse Costco has been fined 200 million won for selling goods with an appearance similar in design to copyrighted items.
On February 1, a Seoul district court pronounced its verdict, stating that Costco had infringed on the design rights of holder and plaintiff Kwon, and ordered the company to cough up 200 million won in compensation.
The court ruling also barred Costco from producing or using the goods in question, and also required the company to dispose of any goods remaining in storage.
After submitting an application in 2010, Kwon received design rights in 2012 for a multipurpose storage container. The key feature of the container was the see-through glass portion in the front that made it easy to verify what was inside. After receiving design rights, Kwon began to manufacture and sell the containers to interior design firms.
In 2016, after discovering that Costco was selling containers that were similar in appearance, Kwon asked the retailer to halt its sales, which Costco acquiesced to. Costco had sold the containers since 2012 through an agreement with an outside supplier.
Kwon eventually filed a lawsuit seeking 300 million won in compensation for design rights infringement. The defendant argued that the Kwon’s container and the product it had sold could not be considered to be similar, and furthermore insisted that it had no prior knowledge of the existence of the design rights.
The court dismissed Costco’s claims of ignorance as inconsequential, and added that the two products were comparable enough to the point where Kwon’s design rights were infringed upon.
“Despite the few differences here and there, as a whole the look of the product is similar [to Kwon's container],” the court determined.
First entering the South Korean market in 1998, Costco has been fully embraced by locals. With 13 locations, South Korea is behind the United States, Canada, Mexico, the U.K. and Japan in number of stores (Costco is in 11 countries with 741 stores worldwide). Costco Korea reported revenues of 3.8 trillion won in its 2016 fiscal year (Sept. 1 2016 to Aug. 31, 2017), a 8.7 percent increase from the prior year. Domestic big-box retailers E-mart and Lotte Mart respectively pulled in 14.7 trillion won and 8.5 trillion won in 2016.