Toyplaza, a regional distributor of Lego A/S, who had registered the domain name legokorea.co.kr, and advertised and sold LEGO toys on its associated website, was prohibited from using the LEGO name and trademark on its website and compelled to cancel its domain name.

The Seoul District Court noted that, according to the Distribution Agreement with Lego Korea, Toyplaza was prohibited from using Lego Korea's name and/or trademarks in marketing activities without Lego's prior consent. On the other hand, despite the fact that Toyplaza was also prohibited from using the domain name legokorea.co.kr, the Court found that the registration of such domain name was not, in itself, a marketing activity and, therefore, Toyplaza was not required under the Distribution Agreement to cancel the domain name.

The Court further held that no trademark infringement was present, since the LEGO toys sold on Toyplaza's website were genuine and no consumer confusion would arise as to the source of the goods. However, Toyplaza's associated website did contain several elements which would lead consumers to believe that it was the official website of Lego A/S or Lego Korea since it contained no indication that Toyplaza was only a regional distributor of Lego A/S. The Court, therefore, found that Toyplaza's advertisement and sale of LEGO toys on its website was likely to cause consumer confusion and thus constituted unfair competition. Toyplaza was, therefore, compelled to cancel its domain name. The Court further stated that Toyplaza's use of the domain name legokorea.co.kr was not sufficient evidence to support Lego's claim for trade name infringement.

Even though Toyplaza had removed the associated website and linked the domain name to its company webpage after the filing of the action, the Court held that past activities raised sufficient likelihood of similar future uses, which justified the decision to compel Toyplaza to cancel the domain name.