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Sulbing case highlights worsening trademark squatting involving Korean companies

Published: 14 Apr. 2025, 21:48 Updated: 16 Apr. 2025, 15:25

Sulbing's Injeolmi (roasted soybean powder dusted rice cake) Bingsu, or shaved ice dessert [SULBING]

Korean shaved ice dessert chain Sulbing suffered a major setback in its attempt to expand into China after becoming entangled in a lengthy trademark battle. The company ultimately won a legal dispute over brand rights but failed to gain meaningful traction in the copycat-cornered Chinese market.

In 2015, Sulbing attempted to enter China, only to discover that a local business had already registered a suspiciously similar trademark, Xue Bing Yuan Su. The Chinese company not only adopted a similar menu but also replicated employee uniforms, restaurant buzzers and interior design. After Sulbing launched in China, the rival firm reported the Korean chain to local authorities.

Sulbing responded by filing to invalidate Xue Bing Yuan Su’s trademark at China’s intellectual property office and won the case in 2022. However, the legal victory brought little benefit. Sulbing eventually withdrew from the Chinese market and returned around 1 billion won ($702,000) in licensing fees and other costs to its local partners.

A legal victory “didn’t undo the lost time and money,” a Sulbing spokesperson told the JoongAng Ilbo on Monday.

“We strongly urge other Korean companies to secure local trademark rights before expanding abroad.”

Korean confectionary chain Sulbing's branch near Seokchon Lake Park [SULBING]

Trademark squatting cases involving Korean companies have surged in recent years. The number of suspicious overseas trademark filings monitored last year reached a record-high 9,249 cases, up 84 percent from the previous year, according to the Korean Intellectual Property Office (KIPO). The figure had remained below 1,000 annually until 2017, before climbing to 1,666 in 2018 and 4,654 in 2022.

Some trademark holders allegedly exploit these registrations to demand settlement fees from Korean businesses seeking market entry.

While China once accounted for most such cases, that trend is shifting.

“China has tightened intellectual property protections in recent years,” said patent attorney Yu Sang-geun. “Instead, Southeast Asian countries like Vietnam and Indonesia, where enforcement is weaker, are seeing a sharp rise in trademark squatting.”

He also noted that the continued popularity of Korean culture in the region has fueled this trend.

Last year, 5,091 suspected cases were reported in Southeast Asia, more than double the 2,162 reported in China. Korean brands such as Tom N Toms, Nene Chicken and Hanssem were among those affected in Vietnam.

Imitation remains an issue even without trademark registration. KIPO reported nearly 192,000 cases of counterfeit Korean goods blocked from overseas online platforms in 2024, a 20 percent increase on year. China accounted for 34,859 cases, up 14 percent from the previous year and the highest on record. One example involved a knockoff razor brand called “Doreo,” which closely resembled Korean brand Dorco.

However, the counterfeit problem was even more severe in Southeast Asia, with 104,36 blocked cases. North America and Europe saw 15,423 cases, and South America had 5,267.

“There was a case where a Korean company shared a soon-to-be-released product image on social media, and a counterfeit version hit the market the very next day before the official launch,” said Kim Jun-kyung, director of industrial IP disputes at KIPO.

“Incredibly, the fake even sold at a higher price than the original.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY KIM MIN-JOONG [[email protected]]