Korean food, beauty firms struggle over 'brand hijacking' in overseas markets

Models promote Jung Kwan Jang by Korea Ginseng Corp. at the brand's main store in Seoul's Jung District in this March 2024 photo. Jung Kwan Jang is one of the Korean brands that saw their trademarks preempted by overseas trademark squatters. Korea Times file

Korean companies in the food, beauty and fashion industries are struggling with brokers preempting trademarks of popular brands in overseas markets, preventing the companies from officially registering or selling their products there.

According to government data submitted Thursday to Rep. Oh Sae-hee of the ruling Democratic Party of Korea, the number of so-called “brand hijacking” cases targeting Korean firms over the past five years stood at 30,841. The data is from the Ministry of Intellectual Property and the Korea Intellectual Property Protection Agency.

A total of 4,977 cases were reported in 2021, and the number increased to 5,015 in 2023 then nearly doubled in 2024 to 9,520. The figure stood at 6,675 as of August this year, implying that the total is on track to surpass last year’s level by the end of 2025.

The cases involve overseas trademark squatters that register the names of Korean brands as their own trademark in advance so that the Korean firms operating the brands cannot register them in the foreign market later. They can then claim the brands’ trademarks and even sell them back to the victimized firms later, netting a profit.

Among the victims in the five-year period, small and medium-size enterprises (SMEs) accounted for 10,863 cases, or 35 percent of the total, while medium-size operators with more than 1,000 employees and large firms followed with 2,520.

“SMEs comparatively have less experience and capital than larger firms to operate businesses overseas. The statistics show that protecting them and their trademarks should be prioritized to preserve Korean brands in global markets,” Oh said.

China accounted for the largest volume of brand hijacking with more than 8,400 cases during the five-year period. Vietnam, Thailand and Indonesia followed.

The increase in brand preemption comes amid the rapid global expansion of Korean brands in recent years, becoming a growing obstacle to their overseas expansion.

In 2023, CJ CheilJedang faced a legal dispute in Paraguay after its global food brand Bibigo had already been registered there by a local distributor. It took the company a year to legally reclaim the trademark. In China, before fashion company Hago Haus applied to register its brand Matin Kim in 2019, the trademark had already been granted to another party two months earlier.

The cases are spread across Korean brands for beauty, fashion, food, electronics and medicine, with the brand names copied exactly or closely emulated.

“Like the trademark disputes with Jung Kwan Jang have shown, a stolen trademark is hard to get back,” said Oh, referring to the red ginseng-based health supplement brand of Korea Ginseng Corp. which suffered brand hijacking in China and Hong Kong multiple times in the 1990s.

She added, “K-brands are a core engine for SMEs’ market survival and global market expansion. We must find ways to prevent foreign brokers from pre-occupying our brands and introduce state-level measures to compensate for the victimized firms.”