I FORMS OF INTELLECTUAL PROPERTY PROTECTION
Korea, a member of the world’s five largest intellectual property offices,2 has a well-organised system for intellectual property rights, which include patents, utility models, trademarks, copyrights, etc. Each of these rights is different from one another in terms of the protectable subject matter and the scope of available protection. Further, requirements for obtaining protection are different for each right. These rights, however, are used for protecting different aspects and forms of intellectual property.
Patents provide protection for an invention, which is statutorily defined as the highly advanced creation of a technical idea using the rules of nature. The following are protected by patent rights: for a product invention, acts of making, using, selling, leasing, importing, or offering to sell or lease the product; and for a process invention, acts of using a patented process. A patent expires 20 years after the filing date of a patent application. An invention is granted a patent only where the invention complies with the patentability requirements, such as industrial applicability, novelty and an inventive step.
ii Utility models
Utility models provide protection for a device, which is statutorily defined as the creation of a technical idea using the rules of nature. Unlike patents, only a product is eligible for utility model protection. The term of a utility model right is 10 years from the filing date of a utility model application. Contrary to many other jurisdictions, utility model applications in Korea are subject to examination relating to substantive requirements, such as novelty and inventive step.
Trademark rights provide protection for a mark for identifying goods or services. Protectable marks include not only traditional marks such as a sign, a letter and a figure, but also non-traditional marks such as smell, three-dimensional shapes, hologram, movement and colour. The term of trademark rights is 10 years from the registration date of the trademarks and is renewable every 10 years without limitation. The use of a mark is not required to obtain a right for the mark. If a mark has not been used for a period of three consecutive years after the registration date, however, the mark may be cancelled through a cancellation action.
iv Design rights
Design rights provide protection for a shape, pattern or colour of an article or a combination thereof. The term of a design right is 20 years from the filing date of the application. Design rights can be obtained for designs that have industrial applicability, novelty and creativity. A design is deemed to have creativity where the design is clearly and objectively distinguishable from other designs.
Copyright provides protection for a work, which is statutorily defined as a creative work that expresses the thoughts or emotions of a human being. Copyright arises automatically when a work is created and lasts until 70 years after the death of the author. A work is not required to be fixed in a tangible medium, and registration is not required for copyright protection. Copyright is subject to statutory limitations, such as educational, non-profit and fair use.
vi Trade secrets
Trade secrets are afforded protection under the Unfair Competition Prevention and Trade Secret Protection Act (the Trade Secret Protection Act). The trade secrets under the Trade Secret Protection Act include various kinds of methods or information from a production method to a sale method and useful technical or business information for business activities, which are not protectable by the Patent Act. Methods or information can be acknowledged as protectable trade secrets if they comply with the requirements such as secrecy (non-disclosure), economic value and security measures. According to a recent revision to the Trade Secret Protection Act, the requirements relating to security measures were relaxed from a substantial effort to a reasonable effort to maintain the secrecy of a trade secret.
vii Regulatory exclusivities
The Ministry of Food and Drug Safety requires four-year or six-year post-marketing surveillance (PMS) to monitor the safety of a new drug after an approval for the new drug is granted. During this PMS period, a generic pharmaceutical company is restricted from filing an application for approval referring to the safety and efficacy data of the new drug, even if the patent of the original pharmaceutical company has expired. This has the effect of providing data exclusivity to the original pharmaceutical company.
ii RECENT DEVELOPMENTS
The most significant developments in Korea over the past several years are presented below.
i Statutory developments
Reinforced obligations of submitting evidence in a patent infringement action
In patent infringement actions filed on or after 30 June 2016, the alleged infringer could not be justified in refusing to submit evidence by asserting that the evidence is a trade secret, if the evidence is deemed necessary to verify an infringement or damage. The court will, however, attempt to prevent a trade secret from being disclosed as much as possible by limiting the scope of the evidence disclosed and persons with access to the evidence. In addition, if the alleged infringer does not respond to the court’s order to submit evidence without a justifiable reason, the facts that the opposing party intends to prove based on the evidence may be deemed to have been proven.
Under the pre-revised Patent Act, it was difficult to enforce the court’s order to submit evidence if the alleged infringer asserted that the evidence was a trade secret even though the evidence was crucial information for verifying an infringement or damages. This revision is expected to ease the plaintiff’s burden of verifying patent infringement and assessing damages in patent infringement actions.
Patent term adjustment (PTA) for delays by the KIPO
The PTA system was introduced in Korea in 2012 as a result of the Korea–US Free Trade Agreement, and applies to all patent applications filed (or internationally filed, in the case of PCT applications) on or after 15 March 2012. Under the PTA system, if a patent is issued more than four years after the filing of the patent application and more than three years after a request for examination, the term of a patent may be extended to compensate for the period of an unreasonable delay by the Korean Intellectual Property Office (KIPO) during the prosecution of the patent application. The period of delays attributable to the applicant is excluded from the extendable patent term.
PTA can be granted only upon a request by the patentee, which must be made within three months of the date the patent is issued. The KIPO does not notify patentees of the PTA eligibility of patents or of the PTA period that can be granted for the patents. Thus, patentees need to verify whether their patents are eligible for PTA and be cognisant not to miss the three-month deadline for requesting PTA.
Shortened period for filing a request for examination
With respect to all patent applications filed on or after 1 March 2017, the time period for filing a request for examination is shortened from five years to three years from the application filing date (or from the international filing date, in the case of PCT applications). Such a shortened period for requesting examination accords with the examination trends in many other countries.
Patent cancellation proceeding
A patent cancellation proceeding was newly introduced to allow any person to request the cancellation of a registered patent with the Intellectual Property Trial and Appeal Board (IPTAB) within six months of the publication of the patent. The patent cancellation is limited to prior art grounds based on patents and printed publications, which have not been cited during the prosecution of the patent. Grounds for lack of novelty and inventive step based on public use or sale and all other grounds that are available in a patent invalidity proceeding are excluded from the grounds for the patent cancellation.
As patent cancellation proceedings are ex parte, the requester does not participate in the proceedings and cannot appeal the IPTAB’s decision. Nevertheless, this ex parte procedure is a cost-effective way to challenge the validity of a patent. Meanwhile, the patentee is given an opportunity to respond with an argument and to correct the claims during the proceedings. The patent cancellation proceeding is applicable to all patents registered on or after 1 March 2017. According to the statistics available from the KIPO, there were approximately 110 requests for patent cancellation proceedings during the period from 1 March 2017 to the end of 2017.
ii Changes to case law
Standards for determining the extendable term and the scope of patent term extension (PTE)
Numerous patent term extension (PTE) invalidation trials were filed by generic pharmaceutical companies to obtain first generic exclusivity under the patent-approval linkage system implemented in 2015. In these invalidation trials, the courts consecutively issued decisions setting the standards for determining the extendable term and scope of PTE.
Representatively, the Supreme Court and the Patent Court indicated, with respect to calculating the extendable term, that since examinations on safety and efficacy, quality control, DMF and GMP are each performed by different examination divisions within the Ministry of Food and Drug Safety, even if an examination on any one of these categories has not been performed during the time period from the request of supplementation to the filing of supplemental data, as long as examinations are performed on other categories by other examination divisions during that period, this period cannot be excluded from the extendable term (see Supreme Court Case No. 2017 Hu 844, issued on 29 November 2017; Patent Court Case No. 2016 Heo 21, issued on 16 March 2017; etc.).
In addition, with respect to the scope of PTE, the Patent Court held that the scope of PTE covers drugs that are substantially identical products according to the Pharmaceutical Affairs Act (PAA) and do not require an additional MA, as well as the approved drug itself. Since an additional MA is required if the salt of the effective substance has been modified, it was determined that the scope of PTE based on MA of Solifenacin succinate does not expand to Solifenacin fumarate, which comprises a different salt. In addition, it was held that the scope of PTE of the approved drug cannot be interpreted to extend to any drug that is within a scope equivalent to the approved drug (see Patent Court Case No. 2016 Na 1929: Decision issued on 30 June 2017).
A second medical use invention defined by new dosage regimen can be patentable
An en banc Supreme Court decision in 2015 acknowledged dosage regimens, such as an interval, route and dose of administration, in addition to ‘effective substance’ and ‘medical use’ as features of a medical use invention for the first time. Specifically, the Supreme Court held that ‘an interval, route and dose of administration should be deemed as technical features that add new meaning to the product (i.e., medicament) by expressing properties that enable a medicament to fully display its efficacy, and a medicament having new medical uses of the interval, route and dose of administration may be patentable’ (see Supreme Court Case No. 2014 Hu 768 issued on 21 May 2015).
After this decision, the Supreme Court acknowledged the inventive step of a second medical use invention defined by a dosage regimen (see Supreme Court Case No. 2014 Hu 2702 issued on 29 August 2017). In this court holding, the Supreme Court ruled that ‘since an effort of identifying an interval, route and dose of administration for increased efficacy and efficient administration is generally made during the process of developing a medicament, the claimed dosage regimen must achieve a remarkable or different effect that could not be predicted by one of ordinary skill in the art in view of the technical standard or common knowledge in the art at the time of the filing of the application, in order for the claimed second medical use invention to be acknowledged to have an inventive step’, which acknowledged in this case the inventive step of the claimed second medical use invention defined by the new route of systemic transdermal administration of an (S)-isomer, since the prior art only disclosed the effect of oral administration of a racemic compound, and the claimed route of systemic transdermal administration of the (S)-isomer achieves a remarkable effect. We can now look forward to decisions to be issued by the Supreme Court on the patentability of other forms of second use inventions defining the new pharmacological mechanism or patient group.
III OBTAINING PROTECTION
Under the Korean Patent Act, the patentable categories of inventions are a product, a method and a method of preparation. Use is not a patentable category of invention. Further, since a method for treatment, prevention and diagnosis on a human being is deemed to lack industrial applicability and, thus, is not allowed, a medical use invention is generally drafted in a product form, such as a pharmaceutical composition or a medicament, and the medical use should be identified by a pharmacological effect with respect to the diagnosis, treatment, alleviation or prevention of a disease. That is, the medical use should be identified with reference to a specific disease. Note if the claim is drafted in the form of a compound, the claim will be deemed to be directed to the compound itself regardless of the medical use defined in the claim.
Other types of subject matter, such as genetic materials and genetically engineered cells, plants and animals (except a human being), are patentable.
In patent applications filed before 1 July 2014, software inventions can be protected by method, apparatus or recording medium claims. However, in patent applications filed on or after 1 July 2014, software inventions can also be protected by claims for a computer program (or an application) stored in a medium.
In order to qualify as a patent-eligible subject matter, the information processing by the software must be concretely realised through the use of hardware. This hardware requirement is also applicable to business methods.
Further, claims directed to a program signal, a data signal or a computer program list and claims that involve human acts, economic rules, artificial decisions, mathematical algorithms or human mental processes are not allowable for patent protection.
IV ENFORCEMENT OF RIGHTS
i Possible venues for enforcement
A patent infringement lawsuit for damages or injunction may be filed with one of the following five specialised district courts according to jurisdiction: Seoul Central District Court, Daejeon District Court, Daegu District Court, Busan District Court and Gwangju District Court. A preliminary attachment or a preliminary injunction may be requested to one of the 58 district courts or any of their branches across the nation that has personal jurisdiction over the defendant.
ii Requirements for jurisdiction and venue
The jurisdiction and venue of a patent infringement lawsuit for damages or injunction, and a preliminary attachment or a preliminary injunction, depend on the defendant’s address and the place where the infringement occurred. Notwithstanding the foregoing, regardless of jurisdiction, a plaintiff may elect to have the case heard at the Seoul Central District Court. However, a preliminary attachment or a preliminary injunction must still be filed with one of the 58 district courts or any of their branches across the nation that has personal jurisdiction over the defendant.
iii Obtaining relevant evidence of infringement and discovery
According to the Korean Code of Civil Procedure, if a party requests the court to investigate certain evidence, and it is deemed that it would be difficult to use the relevant evidence later, the court may investigate the evidence even prior to the filing of the complaint. The granting of such a request is limited to cases where it would not be possible to investigate the evidence later. To prove a patent infringement, the patentee usually relies on publicly available evidence at the time of filing the complaint, since evidence in the hands of the opponent is difficult to obtain before a lawsuit. Once a party shows a reasonable ground for the court to determine that the opponent or a third party is in possession of relevant information, the court may issue, upon the party’s request or ex officio, an order to the person who is in possession of the evidence to submit it.
The Code of Civil Procedure provides a variety of mechanisms for obtaining evidence from adverse parties in a lawsuit. Mechanisms to collect evidence, via filing a motion with the court during the litigation procedures, include live examination of witnesses, requests for production of documents and requests for inspection of premises. To facilitate a party’s investigation into the opponent’s written evidence, the party may file a motion asking the opponent to submit a list of related documents that are under the opponent’s control or are planned to be introduced as evidence by the opponent.
The most common mechanism for obtaining third-party discovery is a material production request ordered by a court upon the motion of a party. However, the motion must specify the material to be produced and the person or entity from whom such production is sought.
iv Trial decision-maker
A panel consisting of three judges examines a patent infringement action with the assistance of technical experts. Technical experts are assigned mainly to the Seoul Central District Court and the five courts dedicated to patent infringement lawsuits for damages or injunction, and not to all courts. There are about 20 technical experts at the Seoul Central District Court who assist in decisions.
v Structure of the trial
A patentee bears the burden of proving the infringement of the patent, whereas a party challenging the patent bears the burden of proving invalidity or unenforceability. Although the Korean Patent Act does not specifically provide a presumption of validity, a patent claim granted after substantive examination by the examiner is presumed valid. As the district court has no power to declare patent invalidity, it may simply refuse to enforce a patent when a serious doubt has been raised as to the validity of the patent. Patent invalidation actions are litigated before the IPTAB, not a district court.
In limited circumstances, a patentee can be relieved of the burden of establishing infringement and the burden of establishing non-infringement be placed on the alleged infringer. This occurs in cases involving a patented process for making a product that has not been known to the public on the filing date of the subject patent application.
A patent can be infringed when a person performs activities satisfying all the elements required as defined in a patent claim (all elements rule).
Even if infringement is not established pursuant to the all elements rule, infringement may be found under the doctrine of equivalents (DOE). Specifically, Korean courts apply the DOE rule to determine whether an allegedly infringing product or process that does not literally include exactly the same elements as defined in a patent claim may still be found to infringe if the difference between the elements of the patent claim and the allegedly infringing product or process is not substantial.
In addition, when a person performs activities satisfying some elements defined in a patent claim and the remaining elements of the patent claim are performed by another, and as a result, the patented invention is performed by two (or more) persons, the two performers may be liable for a patent infringement as joint tortfeasors.
The Korean Patent Act prescribes that one is liable for contributory infringement when making, offering for sale, selling or importing a product that may be used solely for manufacturing a patented device. When a patent claim defines a process or method, the same rule is applied to a product that may be used solely for exploiting the patented process or method.
The above provisions of the Korean Patent Act are construed to exclude supplying staple products from contributory infringement by limiting the product as being used solely for manufacturing the patented device. It is not explicitly prescribed whether a direct infringement is a prerequisite to establishing a contributory infringement. This issue matters since the liability of patent infringement requires exploitation of a patent to be ‘commercial’ activity. When the patented product is employed for a personal use, rather than for a commercial use, supplying the patented device is not deemed a patent infringement. In addition, the Korean Supreme Court has held that in order to establish a contributory infringement, the production act in ‘solely for manufacturing the patented device’ is required to be performed domestically.
To challenge the validity of a patent, an invalidation action can be filed with the IPTAB of the KIPO. Only an interested party or an examiner can request an invalidation trial. An invalidation trial can be requested for each patent claim.
In addition, during the period from the registration date to six months after the publication of the patent, any person can request the cancellation of a registered patent to the IPTAB by submitting prior art, which have not been cited during the examination.
In Korea, a valid patent will be unenforceable under the good faith principle of the Civil Act if the enforcement of the patent is deemed as an abuse of the patent right. According to court decisions in Korea, when a patent is apparently deemed to lack novelty or an inventive step, the patent is unenforceable even before a decision to invalidate the patent becomes final and conclusive.
If an act of working a patent falls under any of the unfair trade practices (e.g., filing a patent infringement lawsuit while being aware of the invalidity of the patent) prescribed in the Fair Trade Act, the patent enforcement will be restricted so as not to violate the Fair Trade Act, and the patentee will be liable to pay a fine levied by the Fair Trade Commission.
Prior user defence
If an accused infringer has been commercially using the accused method or device prior to the filing of the patent, the accused infringer may assert the ‘prior user rights’ defence to patent infringement.
Under the Korean Patent Act, a person, who, without knowledge of the content of an invention claimed in a patent application, made an invention identical to the said invention or learned of the invention from a person who made an invention identical to the said invention and has been working the invention or making preparations to work the invention in Korea at the time of the filing of the patent application, is entitled to have a non-exclusive licence (prior user right) on the patent right within the scope of the objective of the invention or the business related to the invention that the person is working or making preparations to work.
Preparations to work the invention mean substantial preparations to conduct business based on the invention, including purchase of a plant site or business facilities.
In the case where a patent based on an application filed by an unlawful person is transferred to the proper person upon a request, if before the transfer, a patentee, an exclusive licensee or a non-exclusive licensee has been practising or preparing to practice the patented invention in Korea without being aware that the application was filed by an unlawful person, he or she may be deemed to have a non-exclusive licence for the patent.
viii Time to first-level decision
The average duration of a patent infringement suit from filing of a complaint to entry of judgment varies depending upon the complexity of the case and the court with which the case is filed. The Seoul Central District Court has heard the largest number of patent cases and has developed institutional expertise in patent cases, and an infringement suit before that court can be resolved within 12 to 18 months.
Monetary damages can be awarded to a patentee (or exclusive licensee) when its patent is found to be valid and infringed and the patentee loses its profits as a result of the infringement. The damages are intended to fairly compensate the patentee for losses suffered from the infringement. A patentee is entitled to its lost profits on all lost sales resulting from the infringement if the patentee can show that, but for the infringement, the patentee would have made the sales that the infringer made. Accordingly, the patentee must show demand for the product in the market and sufficient capacity to make non-infringing products.
When there are losses caused by the infringer’s sales of infringing products, but the actual lost profits are not easily proven, the amount of losses may be calculated by multiplying the number of sold products by the profit per unit of the product that the patentee might have sold but for the infringement. In such cases, the damages may not exceed an amount calculated by multiplying the estimated profit per unit by the amount obtained from subtracting the number of products actually sold from the number of products that the patentee could have produced. However, if the patentee was unable to sell his or her product for reasons other than by infringement, a sum calculated according to the number of products subject to the said circumstances shall be deducted.
The profits gained by the infringer as a result of the infringement shall be presumed to be the amount of damage suffered by the patentee.
The pecuniary amount of reasonable royalty to which the patentee would normally be entitled may be claimed as the amount of lost profits of the patentee. Notwithstanding, if the amount of losses exceeds the amount of the reasonable royalty, the amount in excess may also be claimed as damages. In such cases, the court may take into consideration whether or not there has been wilfulness or gross negligence on the infringer when awarding damages.
Nevertheless, if the nature of the facts of the case makes it difficult to provide evidence proving the amount of losses, the court may determine a reasonable amount on the basis of an examination of the whole circumstances.
A patentee (or exclusive licensee) can request a preliminary or permanent injunction against a person who infringes or is likely to infringe on his or her own patent right. A patentee can demand the measures necessary to prevent the infringement. To obtain a preliminary injunction, the patentee must show a likelihood of success on the merits for the validity of the patent and infringement. In deciding whether to grant a preliminary injunction, the court must also take into consideration the balance of hardships between the parties, the prospects of irreparable harm to either party and the public interest. Both preliminary and permanent injunction apply only to the defendant. Thus, an injunction is not effective against the infringer’s suppliers or customers.
x Appellate review
The patent court has jurisdiction over appeals of judgments in patent infringement lawsuits. However, appeals of preliminary attachment or preliminary injunction judgments are heard at appellate divisions of the district court or at the High Court in one of the five large cities within which the district court resides. For patent invalidity decisions as well as declaratory judgments made by the IPTAB, all appeals are heard at the patent court.
Appeals of decisions issued by the High Court or the patent court may be heard at the Supreme Court. The Supreme Court may decide to refuse to deliberate within four months of the date a notice of appeal is lodged to the Supreme Court.
xi Alternatives to litigation
The common forms of alternative dispute resolution for resolving patent disputes in Korea are mediation and arbitration. The KIPO has established and operates the Industrial Property Dispute Mediation Committee for patent, trademark and design rights. For arbitration, the Korean Commercial Arbitration Board was established for various commercial disputes for internal and international trade disputes, including patent infringement disputes, although this institution does not specialise in patent disputes.
As another alternative to litigation, a patentee may request an investigation of unfair trade practices to the Korea Trade Commission (KTC), which is an administrative agency. When potentially infringing goods are being imported into or exported out of Korea, a patentee may alternatively, or additionally, request that the KTC institute an investigation of the potential infringement. Unlike a patent infringement action or preliminary attachment or injunction, a patentee may request an investigation to the KTC without being subject to personal jurisdiction. Based on its investigation and determination as to whether unfair trade practices (e.g., a patent infringement) have taken place, the KTC may impose sanctions, such as penalties or a ban on the import of infringing goods, against the parties that engage in unfair trade practices.
V TRENDS AND OUTLOOK
Amid ever-increasing international disputes in intellectual property, a demand for establishing an international tribunal in the Patent Court where arguments can be made in English has been growing. Specifically, of the 611 patent disputes filed with the Patent Court in 2016, 260 cases (42 per cent), or close to half of the total, were filed by foreigners and foreign corporations.
By establishing the international tribunal, the Patent Court seeks to serve as an international dispute solution hub for intellectual property. As a part of that effort, a bill to revise the Court Organization Act for introducing an international tribunal has been proposed in the National Assembly, and an English hearing was held in Korea for the first time in an appeal case of the final rejection of a patent application on 28 June 2017. However, according to Article 62 of the current Court Organization Act, it is not possible to conduct a trial only in English. Thus, the Patent Court held the hearing in Korean before conducting the English hearing.
In the future, if the Court Organization Act amendment is enacted, the international tribunal employing English hearings is expected to be actively used by foreign companies.