In a significant victory for pharmaceutical brand protection, Korea’s Intellectual Property High Court invalidated the trademark registrations of three generic hepatitis B drug brands, finding that they improperly imitated an original pharmaceutical trademark and were filed in bad faith. The case was appealed to the Supreme Court, but the Supreme Court dismissed the appeal without reviewing the merits. 

Background

Gilead Sciences (“Gilead”) launched its hepatitis B treatment drug under the trademark “VEMLIDY” globally in 2016 and in South Korea in 2017. Subsequently, three Korean generic pharmaceutical companies, Dong-A, Daewoong, and Samil Pharmaceutical, filed trademark applications for “Vemlia,” “Vemliver,” and “Vemlino” respectively — all containing the “Vemli” portion of the original mark — and launched their generic hepatitis B treatments in 2023 after their applications were registered. Gilead initiated invalidation actions against these marks before Korea’s Intellectual Property Trial and Appeal Board (IPTAB). After the actions were dismissed at the administrative level, the cases were appealed to the IP High Court.

Key Issues and Arguments

The defendants argued that “VEM” was a weak, descriptive component referencing “Vaccine Escape Mutant,” a medical term, and that the shared portion therefore lacked distinctiveness. They contended that when viewed as wholes, the marks were not similar. To rebut the defendants’ claims, Kim & Chang conducted rigorous surveys which demonstrated that 95-97% of the respondents, including both general consumers and medical professionals, were unfamiliar with “VEM” as a medical abbreviation. Furthermore, Kim & Chang effectively pointed out that, upon reviewing each of the approximately 40 papers submitted by the defendants, they cannot be deemed to prove that VEM is commonly used as a medical abbreviation. 

Court’s Decision

The IP High Court ruled in favor of Gilead on all counts. The Court first established that when assessing trademark similarity for pharmaceutical products, which include both prescription and over-the-counter drugs, the perceptions of general consumers, as well as medical professionals, must be considered.

Regarding the distinctiveness of “VEM,” the Court found that while the term appears in some medical literature as an abbreviation for “Vaccine Escape Mutant,” it is not a standardized abbreviation, does not appear in specialized abbreviation databases, and is used as an abbreviation for various other medical terms. The Court noted that other pharmaceutical companies using the same active ingredient did not incorporate “VEM” in their product names, indicating it should not be considered descriptive or generic for the relevant products. The Court highlighted in particular that, according to Kim & Chang’s survey results, only 6.3% of doctors, 3.3% of pharmacists, and 3% of the general public responded that they knew the meaning of ‘VEM,’ and even among those who claimed to know it, their responses were inconsistent.

As for market confusion, the Court accepted evidence of actual confusion in the marketplace, including prescription software screenshots showing that entering “vem” in search fields simultaneously displayed both the original and generic products. The Court rejected the defendants’ survey methodologies, finding procedural flaws in their approach of presenting product packaging photos rather than comparing the trademarks directly.

On the question of bad faith, the Court found that the prior-used trademarks were well-known to domestic and international consumers at the time the defendants’ applications were filed, and the defendants were clearly aware of their existence. The Court noted that “VEMLIDY” was launched after Gilead’s earlier hepatitis B treatment “Viread,” which helped the new trademark gain recognition faster than typical new products. The Court also found that “VEMLIDY” is a highly creative coined mark with no similar usage in the market, and the defendants’ adoption of the “Vemli” portion constituted imitation.

Since receiving the decision, Dong-A, Daewoong, and Samil Pharmaceutical have changed their marks to Tafria, Tafvir and TenoS, respectively. 

Significance of the Decision

There has been a troubling trend in Korea where generic pharmaceutical companies adopt trademarks that intentionally evoke the original brand’s name. Historically, Korean courts have been somewhat reluctant to find these generic marks similar to the originals, a notable example being the case where “GLITAMIN” was ruled dissimilar to “GLIATILIN”.

This decision establishes an important precedent for protecting creative pharmaceutical trademarks in Korea, reinforces the importance of survey evidence in trademark disputes, and strengthens safeguards against the adoption of opportunistic branding strategies for generics. Notably, the trademark registrations were invalidated despite the generic products already being in use in the market, meaning past use may be recognized as infringement. The finding of bad faith also raises the possibility of enhanced damages, creating significant market implications for the pharmaceutical industry.

Kim & Chang represented Gilead throughout the proceedings, combining rigorous survey research, strategic legal arguments, and comprehensive factual documentation to secure this landmark victory.