Who says major corporations are immune to legal disputes that challenge their brand identity? One recent example is what happened to KG Mobility (KGM), a large South Korean automaker company.
Currently facing a trademark issue, they might have to change the company’s name in foreign markets. That’s why using professional trademark service and doing trademark renewals is more than essential.
For more details on this, read our article: “Don’t Lose Your Brand! Why Trademark Renewal is Essential” on our insights page at Am Badar & Am Badar.
Why KG Mobility Is Facing a Trademark Challenge?
Following its acquisition by KG Group, SsangYong Motor, a South Korean manufacturer renowned for its SUVs and trucks, renamed itself as KGM (an acronym of KG and mobility).
Originally, the name change was meant to indicate a new start and a focus on future transportation options. But soon the business ran against a big issue: obtaining trademark rights for its new name.
Reversing the company’s application to trademark the new name, the Korean Intellectual Property Office (KIPO) said KIPO claims that the rejection resulted from the identical name being registered primarily in Europe and other areas.
According to the Paris Convention, trademarks registered in one country have the same protection in other countries of the Paris Convention.
In this case, KGM finds it difficult to claim the name, as the Turkish individual Cihan Turan had earlier registered “KG Mobility” in the European Union (EU) and the United Kingdom (UK) in March 2022.
Complicating things even further, the rejection not only happened to the English name. KIPO also objected to the corporation trying to trademark the Korean variant of the name. This choice has left KGM in a difficult position and caused the business to give alternative names some thought for its worldwide activities.
The Countries Involved and the Legal Issues
As stated above, the trademark conflict crosses many countries. For KGM, pre-registration of the trademark by Cihan Turan presents a major barrier in Europe.
In fact, Turan is often referred to as a “trademark troll”, typically exploiting legal loopholes to demand high royalties from legitimate businesses seeking to use the name. That means he registered the name without any apparent intention of using it.
The situation in Turkey is equally challenging. The Turkish Patent and Trademark Office rejected the company’s application to register the acronym. This is because the brand name “KGM” clashes with the General Directorate of Highways, managed by the Turkish government (called “Karayollari Genel Mudurlugu” in Turkish).
KGM has run across resistance even in South Korea from other companies. Austrian motorcycle maker KTM objected to the company’s effort to trademark “KGM”, for example, claiming that the acronyms would mislead customers given their resemblance.
Potential Consequences for KG Mobility
So, what will happen if KGM loses the trademark? Will they need to do another rebranding? How could this affect their global market strategies? Here’s the detail:
What Losing the Trademark Could Mean for the Brand?
Certainly, KGM could have to go through another rebranding should it ever lose the right to use its name.
This would include re-education of customers, upgrading marketing materials, and replacing signs, among other major expenses. Rebranding disturbs client loyalty and reduces brand awareness, therefore it is not only costly but also dangerous.
Particularly, the corporation has already made significant investments in advertising the new KGM brand as a representation of its fresh emphasis on future technologies and worldwide development. Losing the trademark may therefore cause them to start from nothing and compromise the company’s reputation.
How This Could Affect KG Mobility’s Global Expansion?
The company’s growth goals are seriously challenged by the impossibility to utilize this brand in other marketplaces as well. Without a clear worldwide brand identity, KGM runs the danger of seeming to business partners and customers inconsistent or fragmented.
This might therefore make it more difficult to develop a strong, identifiable character in cutthroat sectors like car manufacture.
Moreover, other labels like “KGM”, which the business has temporarily embraced for foreign business, could not appeal to the market as such. Although under examination in South Korea, the acronym has already been denied in Turkey.
Now, should KGM be unable to find a suitable substitute, its worldwide growth might be seriously disrupted and operations would not be able to go on.
The Bigger Impact: Trademark Challenges in Business
Overall, trademark disputes like the one facing KGM highlight the importance of securing intellectual property rights early and comprehensively, as trademark challenges affect businesses in profound ways. Below are some common challenges businesses face.
- Trademark Registration and Availability
Many businesses face rejection due to pre-existing trademarks, as in the case of KG Mobility, where the name was already registered in Europe and the UK.
- Global Compliance with Trademark Laws
Trademark laws vary significantly from one country to another, which shows the need for businesses to understand local law when applying for a trademark.
- Managing Costs and Resources
Legal fees increase with each trademark class and jurisdiction, and the costs of defending a trademark in court or against trademark trolls can burden even well-established businesses.
Thus, it is essential to conduct thorough trademark searches, understand international trademark classes, and anticipate potential conflicts, especially for businesses operating in multiple jurisdictions.
Why Trademark Disputes Are Crucial for Companies?
Although they might hurt the business involved, trademark conflicts are nonetheless necessary for several reasons. Then, why are these disputes essential for companies? Let’s explore:
1. Protecting Consumer Trust and Brand Identity
First of all, differentiating the goods or services of a company depends on trademarks. A distinctive and protected trademark guarantees consumers’ ability to boldly recognize a company and its products.
2. Securing Competitive Advantage
A strong trademark thus gives companies a competitive advantage by legally forbidding others from using similar names or logos. But conflicts could compromise this advantage, as occurred to KGM in Turkey and Europe.
The road ahead for KGM probably consists of discussions mixed with judicial appeals. The corporation has already contested KIPO’s ruling, but the review procedure can go up to a year.
Again, as KG Mobility’s experience shows, difficulties obtaining trademarks may cause operations to be disrupted, slow down development, and damage reputation. Companies must therefore prioritize robust trademark strategies and leverage expertise to properly negotiate these obstacles.
For expert guidance on this legal issue, visit our Trademark Prosecution Service at Am Badar & Am Badar. For additional information about IP-related issues, explore our insights here, or check our full services and contact us now to learn more!
