It has been revealed that although over 3,000 overseas "Hallyu-free-riding companies"—which mislead consumers into thinking they are domestic companies or products—were identified in a single survey in 2020, the Korean Intellectual Property Office (KIPO) has failed to conduct any separate fact-finding surveys over the past five years.

Critics point out that because Hallyu free-riding acts can hinder the export of domestic companies, consistent overseas fact-finding and monitoring are essential.

According to the office of Representative Kim Sung-won of the People Power Party (who serves as the Chairman of the Trade, Industry, Energy, SMEs, and Startups Committee in the National Assembly) on the 29th, KIPO conducted an online survey in 2020 on "Hallyu-free-riding companies" that utilize Korean elements such as the Taegeukgi (Korean flag) or "KR" overseas to cause misunderstanding and confusion as Korean companies or Korean product retailers.

3,123 Companies Identified in 2020… No Surveys for the Past 5 Years

In the survey at the time, Hallyu-free-riding retail stores identified included 2,608 in China, 103 in Mexico, 95 in India, 92 in Vietnam, 90 in the Philippines, 38 in the United Arab Emirates (UAE), 35 in Türkiye, 23 in Malaysia, 20 in Thailand, and 19 in Pakistan, totaling 3,123. China accounted for 83.5% of the total.

However, from 2021 to 2025, no separate fact-finding surveys regarding Hallyu-free-riding acts were conducted.

Hallyu-free-riding acts hinder the exports of domestic companies by illegally preempting Korean corporate trademarks or inducing confusion regarding Korean origin overseas. KIPO has been identifying relevant cases based on media reports, tips, and its own investigations.

The problem is that overseas business cases capable of being mistaken for Korean companies and brands were identified even during the period when no fact-finding surveys took place.

Materials submitted by KIPO to the lawmaker's office this year included Chinese examples such as "ONLY YOUNG," "OUYUS," and "New York Bagel Museum," the UAE's "MINISO" (note: MUMUSO), and Vietnam's "Gyeonggi-do Danang-si Starfield," "Myeongryun Jinsa Bag," and "Ppaek Bag."

Among them, "ONLY YOUNG" operating in China voluntarily removed infringement factors—such as changing its store name to "CHEER LEMON"—after CJ Olive Young sent a warning letter.

From 'Only Young' to 'Mumuso'… Successive Imitation Cases Overseas

Because Hallyu-free-riding acts take various forms such as imitating trade names and store concepts or false indications of Korean origin, it is difficult to directly calculate economic losses like decreased sales for individual domestic companies.

However, based on analyses by the Organisation for Economic Co-operation and Development (OECD), the global trade scale of counterfeit goods infringing upon the intellectual property rights of Korean companies was estimated at $9.691 billion (approx. 11.1 trillion won) as of 2021.

KIPO has resumed a "Global Counterfeit and Hallyu Free-riding Damage Status Fact-Finding Survey and Research" this year.

Targeting 10 countries across the food, cosmetics, fashion, and content (entertainment) sectors, it is currently analyzing online monitoring results and conducting offline investigations through local professional institutions. The survey period runs until the end of November.

The countries selected for the survey were reviewed comprehensively based on dispute resolution legal support performance by overseas Intellectual Property (IP) centers, the number of online counterfeit product blocks, and monitoring results of preempted suspicious trademarks. They include China, India, UAE, Mexico, Türkiye, the Netherlands, Vietnam, the Philippines, and Indonesia.

Representative Kim Sung-won pointed out, "The fact that no surveys were conducted for five years after confirming over 3,000 Hallyu-free-riding company stores is a clear gap in the K-brand protection system." He added, "As methods become more diverse—ranging up to associating trade names and store concepts—we must move beyond post-incident responses and establish a constant fact-finding and monitoring system."

Representative Kim advised, "This year's resumed investigation must not be a one-time event," emphasizing, "An effective protection system linked to local legal responses and victimized corporate support must be established to ensure that Korean corporate brands and intellectual property are substantially protected overseas."

[Copyright (c) Global Economic Times. All Rights Reserved.]