Mass market cosmetics brand Missha won a lawsuit brought by Procter & Gamble (P&G) over the latter's claim that the local cosmetics manufacturer ran unfair commercials damaging to its reputation.
The Supreme Court upheld an appellate court ruling, ordering P&G to pay the costs of the lawsuit, a court official said Sunday.
In 2011, when Missha launched Time Revolution, the First Treatment Essence, it carried out a large-scale advertisement campaign that encouraged consumers to compare the product to SK-II's Facial Treatment Essence.
"You no longer need to rely on expensive imported cosmetics," said the advertisement.
The two products are similar due to their watery texture and for containing ingredients obtained through the fermentation process. Missha's is priced at 42,000 won ($40) while a 150 milliliter bottle of SK-II's costs more than 100,000 won.
Missha also gave a full-size sample of the new product to those who brought an empty bottle of SK-II facial treatment essence in a promotional campaign that lasted one month.
In October 2012, the Korean operation of P&G sought 100 million won ($94,500) in compensation for publicly comparing the products and damaging the reputation of the SK-II brand by leading consumers to think that SK-II charged a higher price for a product of the same quality.
The top court ruled that Missha's advertisement and marketing campaigns cannot be regarded as unlawful practices because the "empty bottle campaign" lasted only a month and Missha just asked consumers to try and objectively compare the two products.
The consumers who purchase Missha's won't be the same as those who buy SK-II's, which is "about three times as expensive," the ruling stated.
The court also ruled that Missha's product is not a copy of SK-II's product because their formulas differ.
At a lower court, Able C&C lost the suit and was asked to pay 50 million won in compensation for trying to have a "free ride" on the reputation SK-II had built. The appeals court overturned this decision.