Benefits on Prior Art Search to Korean Language Documents in ICT Fields

Korea becomes one of the largest pools of patent publications in the world. In every year, KIPO receives over 350,000 domestic patent applications with specifications written in Korean. Furthermore, Korea already had the largest number of patent applications per year in the world in several technology fields.

1. Market Trend

 a. Mobile Phone

Samsung extended its lead in the overall mobile phone market as well, selling more than one in four phones worldwide in the third quarter of this year. While Apple’s market share in the worldwide mobile phone market increased slightly, the pricing of the new iPhone 5s and iPhone 5c in both mature and emerging markets failed to entice consumers as hoped. The table shows a recent market trend of smartphone sales.

 b. Embedded OS

In the smartphone operating-system market, Android continued to dominate the industry with more than 80 percent of the market's share in the third quarter of 2013. And, while Apple's iOS and BlackBerry suffered a drop in their worldwide market shares, Microsoft’s Windows Phone showed significant growth, albeit from a low base.

 c. Digital / Smart TV

Samsung retained its leadership position in the global Smart TV market amid the competitive holiday season of 2013 with a 26.4 percent share as TV vendors rapidly deploy Smart TV capabilities to garner higher average selling prices (ASPs), according to the latest Strategy Analytics research, “Smart TV Market Share Report Q4 2013″.

Samsung’s nearest competitor, LG, registered a 14.4 percent market share of Smart TV shipments. Although Sony ships fewer Flat Panel TV (FPTV) units than LG, it has been aggressive in its efforts to add Smart TV capabilities to nearly all models it currently offers, which helped Sony capture another 14.3 percent of the Smart TV market.

Samsung and LG have done well in growing their overall FPTV market shares while also refreshing their line-ups with more high value-added products like Smart TVs that have slowed ASP decline at these two companies. Not coincidentally, both companies witnessed a surge in Smart TV market share in the same period.

2. Patent Applications Trend in Recent 5 Years

 a. Mobile Phone/Embedded OS Fields

 b. Digital TV Field (excluding display panel technology) 

3. Korean Patent Documents as Prior Art Pool

 

Accordingly, it is certainly necessary to search and review patent publications in Korean for prior art searches. Nonetheless, it is really difficult to fully understand Korean texts because Korean is a language far remote from English. Usually it has been our experience that we can often find a critical prior art written in Korean that was never considered during patent examination in EPO or USPTO.

Search is not simple. Rather it requires expertise in strategy and deep understanding of technology. We have been entrusted for prior art search by large companies who have multinational patent litigations. Our experienced experts can provide high value-added search strategy and results for analyzing and compiling of patent database information. We have a lot of search and analysis experiences in smart phones, digital TV, video data processing, etc.

Statistics re Korean Patent Applications from WIPO world IP indicators 2012

In 2011, KIPO received about 180,000 patent applications. Among them, 23%, 40,890 Korean patent applications were filed by foreign applicants. Korea was ranked the 5th in the world in the number of patent applications by foreign applicants.

Patent Office	Non-Resident Filing	Total Filing	Percentage
KR	40,890	178,924	23%
Japan	55,030	342,610	16%
China	110,583	526,422	21%
Germany	12,458	85,674	14%

<Data Source: WIPO, World IP Indicators, 2012> 

In addition, 12,139 Korean patent applications – accounting for approximately 25% of the 40,000 Korean patent applications by foreign companies – were filed by American applicants.

Origin	Office
	US	EP	CN	JP	KR
US	-	34,987	28,457	23,414	12,139
CN	10,545	2,548	-	1,401	752
JP	85,184	20,568	39,231	-	15,234
KR	27,289	4,889	8,129	5,007	-

As for PCT routes, KIPO is highly trusted internationally. Further, KIPO become one of the most important offices because KPO has been appointed as the PCT International Searching Authority for about 1/3 of the U.S. PCT applications.

Year	2007	2008	2009	2010	2011
PCT applications in  USA	54,042	51,642	45,627	45,008	48,596
PCT International Search by KIPO	2,735	11,371	13,356	13,319	15,168

For example, Major US companies who appointed KIPO as their PCT International Searches in 2012 include Intel, MS, HP, Google, 3M, Hughes, Applied Materials, Caterpillar, Kimberly-Clark.

Functional Language in Claim

In general, a claim with functional language is very often objected by the Examiner in Korean patent practice. Examiners usually consider functional wordings or expressions used in claims rendering the scope or constitution of the claimed invention unclear and indefinite. Further, they seem to surely have the opinion that such functional expressions make the scope of the functional language claim to be unduly broader than the subject matter supported by the specification.

However, functional wordings or functional expressions are surely allowed under Korean patent practice when no alternative and effective expressions that can clearly and definitely describe the claimed subject matter; the meanings of the functional expressions are fully supported by the detailed description of the invention; and the functional expressions do not pose any problems in defining the scope of the claimed invention. For example, for the specifications of electronic technology field, functional wordings are usually and often allowed in claims. An examiner who is in charge of examinations for chemistry, biotechnology or pharmaceutical patent applications, has relatively high tendency to reject functional language claims.

Recently the Supreme Court held that the scope of protection for an invention is limited to the embodiments clearly specified in the detailed description and drawings when means-plus-function features are exceptionally allowed. The detailed descriptions and drawings of the invention are critical factors to be considered in narrowly interpreting functional claims for purposes of determining the scope of protection. Therefore, it is advisable to keep in mind that many examples should be described in the detailed description when the applicant files an application for a functional claim.

Denied Patent Term Extension for Novartis' Exelon® Patch in Korea

Novartis' Exelon® Patch has been used to treat mild to moderate dementia of the Alzheimer's type and mild to moderate dementia associated with Parkinson's disease. The active ingredient is rivastigmine.

Novartis obtained the first MA for Exelon® Capsule and the second MA for Exelon® Patch in Korea. Exelon® Patch uses a new formulation that allows rivastigmine to be administered in a transdermal therapeutic system (TTS).

Novartis listed two patents in the Green List (http://medipatent.kfda.go.kr) of KFDA pursuant to the linkage system of patent and market approval. The first patent is Korean Patent No. 133,686 that claims chemical compounds including rivastigmine, its pharmaceutical use. The term of the compound patent expired on December 23, 2012. The second patent is Korean Patent No. 569,051 that claims inventions of TTS formulation. The second patent will expire on January 8, 2019.

Novartis has another patent in issue that claims rivastigmine compound for transdermal administration and compositions for them. The patent in issue is Korean Patent No. 121,596 that has actually lmost the same scope of protection that of the basic compound patent of Korean Patent No. 133,686. The background between two patents is somewhat complicated because Korean Patent No. 121,596 stems from transient measure in 1987.

The Patentee and NDA holder, Novartis filed a petition for patent term extension of the basic compound patent on April 23, 2012. In Korea, the patent term extension system was first introduced on July 1, 1987. Under the 1987 Act that applied to the patent in issue, a petition for patent term extension may be filed only during the last three (3) years of the original term of the patent. Upon filing a PTE request, the term of the subject patent shall be extended automatically and shall be terminated on the expiry date retroactively in case the petition has been denied.

KIPO denied Novartis’ petition. Novartis appealed to the Seoul Administrative Court. On September 26, 2013, the court rejected Novartis’ arguments and denied PTE for Exelon Patch patent. The Patentee and NDA holder, Novartis appealed the lower court decision to the Seoul High Court again. The current PTE system has been based on 1990 amendment and the first PTE regulations of 1987 are quite different from those of the current PTE regulations. The PTE regulations of 1987 that must applied to Exelon Patch case had much more narrow scope than those of the current regulations in subject patents and gourds for PTE. Exelon Patch falls in such unfortunate cases during transient period between 1987 and 1990.

Physicochemical Data Addition to the Specification during Prosecution

In general, the specification for a new chemical compound should describe physicochemical data of the claimed compound to such an extent that persons skilled in the art could clearly understand, recognize and reproduce the invention without any additional specific knowledge. However, as for addition of physicochemical data during prosecution, the Patent Court has somewhat differentiated a new compound invention from a new medicinal use invention. The Patent Court held that adding physicochemical data through an amendment does not constitute new matter if examples of a process for preparing claimed chemical compounds are described in detail in the specification. In principle, Korean patent practice requires that all patent applications for novel chemical compounds include physicochemical data in its original specification so as to confirm the production of the compounds. Physicochemical data refers to element analysis data, NMR data, melting point, boiling point, refraction rate, ultraviolet or infrared spectrum, viscosity, crystal type, color or the like. In case a specification fails to contain these data, the application was rejected on the grounds of (i) being an incomplete invention or (ii) failing to meet the description requirement.

The Patent Court decision is significant in that it somewhat relaxes the strict standard applied to all chemical compound inventions that are without physicochemical data. Here is an example. A patent application for novel chemical compounds was rejected by KIPO on the ground that the specification failed to meet the description requirement for a specification. In response, the applicant filed an amendment by incorporating physicochemical data on the claimed compounds, such as structural formulae, melting points and NMR data, into the specification. KIPO rejected the amendment on the ground that the incorporated physicochemical data constituted new matter. The issue was whether the physicochemical data later incorporated into the specification were essential to the confirmation of the production of the claimed compounds, in addition to the initial disclosure in the specification. The Patent Court found that the physicochemical data were not necessary since the production of the claimed compounds was confirmed from the initial disclosure based on the following: (1) chemical names and molecular formulae of substituents for the claimed compounds described in the specification can confirm structural formulae, molecular weights and chemical formulae of the claimed compounds; (2) the description "by crystallization" confirms that the compounds produced are in a solid state; and (3) reaction conditions and processes for preparing the claimed compounds are described in detail to be easily reproduced. The Patent Court has thus held that if the production of the claimed compounds can be adequately confirmed from the initial disclosure in the specification, adding such data to the specification does not constitute new matter.

Really Strict Description Requirement on Pharmacological Effect in Korea

In principle, the pharmacological effect should be described to such an extent that persons skilled in the art could clearly understand, recognize and reproduce the invention without any additional specific knowledge in the specification for a medicinal use invention at the filing stage. It is paramount to understand that under Korean patent practice the specification for pharmaceuticals or medicinal use inventions must quantitatively describe their pharmacological effects. The Korea Supreme Court specifically held that (1) if a pharmacological mechanism by which a certain pharmacological effect is provided has been clearly known, a simple description of the pharmacological effect would suffice; however, (2) in case such a pharmacological mechanism has not been known, the specification should include quantitative experimental data or the specific development of confirmation the pharmacological effect, i.e., when specific experiments were conducted, experimental methods, experimental results or the like, so that others could also confirm such a pharmacological effect.

For example, a new pharmaceutical composition with an enhanced anti-emetic effect in which the composition comprises two known anti-emetic agents, i.e., ondansetron and dexamethasone was claimed but the specification only described in connection with the pharmacological effect of the claimed composition that “the anti-emetic properties of one anti-emetic agent (i.e., ondansetron) are enhanced by administering with the second anti-emetic agent (i.e., dexamethasone).” No quantitative data supporting the enhanced effect was included in the original specification. The application was finally rejected on the ground that the specification violated the description requirement and that the claimed invention had not been completed.

Furthermore, it is not permitted to add quantitative pharmacological data to the specification through an amendment during prosecution. For example, there was a real case that an applicant submitted a declaration which was prepared before the application filing date, describing experimental data supporting the synergistic effect of the composition during the examination and trial proceedings. In that case, KIPO and the Patent Court did not allow the applicant to add data based on the ground that the addition of experimental data is new matter to the specification. Therefore, it is required to have such data or descriptions contained within the original specification at the filing stage.

Pfizer v. Hanmi re: Infringement Litigation on Viagra Trademark for Diamond Shape and Blue Color in Korea

Pfizer’s blockbuster drug, Viagra tablet has known worldwide for its blue color and diamond shape. Right after expiry of a compound patent in Korea, many Korean companies launched generic versions of Viagra in local market. Among them, in particular, Hanmi Pharmaceutical decided to adopt their product’s shape and color as similar as possible to the original drug Viagra. As a result, Hanmi’s generic pill has almost a carbon-copy design with blue color and diamond shape with round edges. Through such a good price and clever marketing strategy, Hanmi could take nearly half the market in about 5 months after Pfizer's patent lapsed.

As an anticipated course, Pfizer filed a trademark infringement lawsuit against Hanmi but lost the first instance case. Pfizer appealed to the Seoul High Court and won the second instance case. Hanmi appealed the case to the Supreme Court late last year.

Pfizer obtained a trademark registration for Viagra’s diamond shape with blue color on February 17, 2005. (Korean TM Reg. No. 608,773) Hanmi contended that any diamond shape and blue color for drug tablets is common or conventional and thus does not have distinctiveness. Also Hanmi’s products have their own Trademark on the surface of tablet and on their package. The package is totally different from Viagra’s.

Hanmi argued that there is no likelihood of confusion between Viagra and Hanmi’s generic drug because (1) two products have their own TMs respectively on product itself as well as its package; (2) the subject drug must be distributed through doctor’s careful prescription and pharmacist’s delivery; (3) Hanmi used the diamond shape and blue color as design elements for drug tablets; and (4) such a diamond shape with blue color has been applied to drug tablets conventionally.

The Seoul Central District Court agreed with Hanmi’s arguments. However, on October 17, 2013, the Seoul High Court reversed the lower court’s decision and held that Hanmi infringed Viagra’s registered TM in diamond shape and blue color. The High Court held that the diamond shape with blue color had become a famous TM and there is likelihood of confusion about source of products having the same shape and color even though they have further TM on their surfaces and packages.

Hanmi appealed the decision to the Supreme Court. The case is pending. Pfizer has not brought the second lawsuit for damage compensation yet.

Patent Term Extension (PTE) Based on MA for Drug Inventions in Korea

1. History of Changes

The patent term extension system was first introduced in Korea on July 1, 1987. Under the 1987 Act, a petition for patent term extension may be filed only during the last three (3) years of the original term of the patent. Under the new 1990 Act, however, a petition for patent term extension may be filed within three (3) months from the date of the approval and six (6) months prior to the expiration date. The current law is basically the same as that of 1990.

Some Changes to the current patent term extension system went into effect on April 3, 2013. The key change to the current system is limiting the number of PTE instances from multiple available chances to only one. Under the current PTE system in Korea, PTE may be available only to the "first" regulatory approval for "a new chemical entity."

2. Subject Patent and Procedures

A patent is eligible for term extension if the patent is related to an approved medicinal or agricultural product, if the patent was unable to be practiced after grant due to pharmaceutical or agricultural regulatory approval requirements. Such a patent should claim a compound, composition indicating use, process of manufacturing, formulation for (1) an invention relating to a drug which requires a product approval under the Pharmaceutical Affairs Act ("PAA"); or (2) an invention relating to an agrochemical which must be registered under the Agrochemical Management Act ("AMA"),

Only registered patentee may apply for patent term extension to KIPO. If the patent right is jointly owned, all the patentees must jointly apply for an extension of the term.

An application for patent term extension must be submitted within three months from the date of the approval under the PAA or from the date of the registration under the AMA. The application, however, may not be submitted less than six months prior to the expiration of the original patent term. Also, a petition for patent term extension may not be filed after the expiration of the patent term. An application for patent term extension should be supported with evidence to show the reason for the extension.

3. Period and Number of Patent Term Extensions

The term of a patent can be extended only once. In case a product approval (or registration) is sought for multiple patents, the term is extended for each patent. However, in case multiple product approvals (or registrations) are sought for a single patent, the term is extended only for the first approval (or registration).

Prior to the current law, even an approval for a combination product whose components had been previously approved by KFDA could be the basis for PTE. In addition, the approval for a second use of an approved drug could also be the basis for PTE, since the approval was regarded as the "first" approval for the new use. Further, in some cases, even an approval for a new formulation comprising an approved active ingredient could be the basis for PTE, if the new formulation was not simply different in the dose of the active ingredient but was a different administration form compared to the previously approved drug (e.g., injection vs. tablet). However, under the current PTE regulation, PTE may be available only to the "first" regulatory approval for "a new chemical entity."

The period of PTE shall be the total length of non-working time to obtain authorization or registration under provisions of the PAA or AMA to work a patented invention. For example, for drugs, the period commencing from either the approval of a protocol for clinical testing from the government authority after obtaining a conditional approval to manufacture for clinical testing or the date the patent is registered, whichever is later; to the date that the final approval to market.

The maximum patent term extension obtainable is five (5) years regardless of whether the actual period of non-working caused by the statutory requirements under the relevant Act exceeds five years.

4. Appeal to the IPT and the Patent Court

If an examiner of KIPO rejects the petition or application for patent term extension, the applicant or petitioner may appeal to the IPT of KIPO. The appeal must be filed within thirty days from the date a certified copy of the rejection is served to the applicant or his agent. On the other hand, a 3rd party may challenge PTE through Invalidation Trial at the IPT of KIPO. If a losing party in the IPT proceedings wants to appeal against the decision of IPT, the party may bring a lawsuit to revoke the IPT decision to the Patent Court within thirty days from the date of receiving the decision.

Benefits on Prior Art Search to Korean Language Documents

Korea becomes one of the largest pools of patent publications in the world. In every year, KIPO receives over 350,000 domestic patent applications with specifications written in Korean. Furthermore, Korea already had the largest number of patent applications per year in the world in several technology fields. For example, Korea is the leading country in semiconductor chip area and LCD or OLED display panels. The table below shows the statistic of LCD panel market shares in 2012.

Accordingly, it is necessary to search and review patent materials in Korean for prior art searches. Nonetheless, it is really difficult to fully understand Korean texts because Korean is a language far remote from English. Usually it has been our experience that we can often find a critical prior art written in Korean that was never considered during patent examination in EPO or USPTO.

Search is not simple. Rather it requires expertise in strategy and deep understanding of technology. We have been entrusted for prior art search by large companies who have multinational patent litigations. Our experienced experts can provide high value-added search strategy and results for analyzing and compiling of patent database information.

While there are a lot of search and analysis experiences in smart phones, semiconductor, video data processing, auto parts, just as an example, we listed up technology areas in detail regarding Display technology.

1) LCD

i) TFT: TFT structure, metal wiring, LTPS polysilicon semiconductor, Oxide semiconductor, Organic semiconductor,
ii) Pixel layout (patterned pixel)
iii) Organic/inorganic insulating layer, C/F, BM, column spacer, Color filter on array, Black matrix on array
iv) Liquid crystal mode: TN, VA, SVA, IPS, PLS, OCB, PDLC
v) Timing controller, Data/Gate Driving IC, COG, ASG, Backlight dimming
vi) LED, optical film (LGP, prism, diffuser, microlens), polarizer
vii) 5 mask/4 mask/3 mask process, nanoimprint, inkjet, Roll print

2) OLED

i) TFT: TFT structure, metal wiring, LTPS polysilicon semiconductor, Oxide semiconductor, Organic semiconductor, buffer layer
ii) Emitting material: EL, Quantum Dot, HITL, HIL, HTL, EITL, EIL, ETL
iii) PDL(pixel defined layer), Spacer, anode/cathode, Top/bottom emission display
iv) Encapsulation, polarizer
v) Fine metal mask, nanoimprint, inkjet, Roll print
vi) Protection Window

3) Miscellaneous

i) Touch screen panel
ii) Flexible display
iii) Digital Information Display
iv) Rounded display
v) 3D display
vi) Liquid crystal lens
vii) Smart watch

Patent and Drug Market Approval Linkage in Korea

The FTA between Korea and USA includes provisions regarding the patent drug market approval (MA) linkage. Pursuant to the KORUS FTA, Korea already amended the Drug Act and is preparing enactments of further necessary provisions in the Drug Act and the Patent Act in order to fully implement the FTA. The full system for patent drug market approval linkage will be implemented on March 15, 2015.

1. Green List – the Korean version of Orange Book

When a company of a new drug application (NDA) has obtained a drug market approval (MA) from KFDA, the NDA holder must list patent information in the patent list (“Green List”) of KFDA. The Green List is similar to the Orange Book in the U.S., but is not the same. The deadline to list is 30 days from the receipt date of MA.

Unlike the Orange Book in the U.S., a NDA holder must list patents with the claim-by-claim basis in the Green List. Therefore, an applicant must specify every claim that covers the approved drug product and further an applicant must submit detailed explanation between each claim and the approved drug to KFDA.

2. ANDA Applicant’s Certification on Listed Patents

Like the HWA, an applicant of a generic drug application (ANDA) must submit a certification regarding listed patents of Green List to KFDA. The patent certification is similar to those of HWA. For example, an ANDA applicant must file a Para. IV certification if he wants to launch a generic drug before the expiry date of listed patents. In such a certification, the generic drug applicant must provide a detailed statement demonstrating that the listed patent is invalid or that the generic drug does not infringe the listed patent.

3. Notice to the NDA holder and the Patentee

Like the HWA, an ANDA applicant with Para. IV certification must notify the fact that an application for generic drug approval has been filed and the filing date of the application to the product approval holder and patent owner within 7 days of the application filing date. The obligation to notice will apply to an ANDA applicant who will launch their product before the expiry date of term of the listed patent. Otherwise, this provision does not apply to generic applicants who intend to launch their drug after the expiration of the listed patent.

4. Others to be Decided this year

The patent MA linkage system in Korea may be similar to the HWA system of the U.S. We envision that details will be quite different from those of HWA. However, we don’t have concrete information yet because the current law just has portions of necessary provisions. The FTA of Korea and U.S. set the deadline to implement a whole system of patent MA linkage in Korea: March 15, 2015. Therefore, with certainty, we will have details for remaining items within this year. We will immediately post them when they are available.

Basics on Preliminary Injunction Lawsuits in Korea

Preliminary actions to preserve rights are designed to either temporarily preserve the current state or to form a preliminary state. The purpose of the preliminary actions is to avoid undue losses until the final decision is reached or executed.

A party who seeks a preliminary injunction must prove that the party is the owner of the right and that there is an urgent necessity to preserve the right. For the case involving a preliminary injunction of IP infringement, the right to be preserved is easily recognized provided that the IP right is valid and that it was infringed. However, there are several obstacles in recognizing the necessity to preserve the right. For example, even if there is evidence of infringement, if the foreign patent owner has not practiced his patent in Korea, the necessity for preliminary injunction will be a subject of debate. This issue is important when it comes to a preliminary injunction of IP infringement.

1. The Urgent Necessity to Preserve a Right

In most cases, preliminary injunction against IP users usually endows IP owners with a satisfactory remedy before the main suit, while it may afflict the other party rather severely. Therefore, courts should carefully consider all aspects regarding the necessity to preserve the right immediately. Furthermore, a higher standard of proof is required to prove the necessity because a preliminary injunction in IP infringement action may come to the same satisfaction as the main lawsuit.

When determining the necessity to preserve a right, the validity of the right and the anticipated outcome of the main suit are important factors. Since validity is a prerequisite, courts often face difficulties in recognizing the necessity to preserve the right immediately if there is a probability of invalidating the patent.

In sum, courts must give a consideration of balances between all interests of parties and anticipate a possible outcome of the main suit. And courts will recognize the necessity to preserve a right if the damage caused by IP infringement is not expected to be fully compensated with only the main lawsuit. Preliminary injunctions are not granted when the right holder’s damage is small compared to the infringer’s damage. For example, the necessity to preserve is more readily accepted if the right holder invests a large amount of money in R&D, or if the technology related to IP is developing rapidly and instigating fierce competition between the parties. The infringer’s intent or negligence is certainly an important factor here as well.

Meanwhile, if the right holder remains indifferent and does not take measures for a considerable period of time despite his awareness of the infringement, it will be difficult to persuade the need to preserve the right. And even more so if the right holder is a foreign national who has not exercised his IP right in Korea.

2. Oral Hearing

Preliminary Injunction Action to IP infringement is handled by a panel of three judges. In general, the right holder has to file a suit with the court that has jurisdiction over infringer’s residence. The court must give a chance for oral hearing in the case of preliminary injunction of IP infringement. As a standard of proof, it requires lower burden of proof than the main civil suit; i.e., it is enough for parties to prove to the extent that the judge may guess it would be certain. Evidence for preliminary actions should be confined within the scope where they can be examined by the court immediately. For example, they can be in the form of documents, samples or witnesses that are readily available for examination at the court. However, for a patent infringement case, courts will usually allow parties to submit experts’ testimonies and presentation of technical matters.

3. IP Owner’s Liability

The party that wins the preliminary action but loses the main suit is liable for the other party’s damages inflicted by exercising the right. The Supreme Court also applies this legal principle to IP cases.^[1] Therefore, even if the patentee wins the preliminary action of a patent infringement and/or obtains an expert opinion from a patent attorney or other expert stating that the other party’s act constituted an infringement, the patentee must be liable for the other party’s damage inflicted by exercising the patent right if he loses the main suit.

Furthermore, according to the Supreme Court, an IP owner is liable for compensating other party’s damage if the right holder loses the main suit, if the other party had suffered losses from the cancellation of a contract with his buyer and if the lost was caused by IP owner’s warning to the buyer for criminal liability. In other words, it makes no difference whether or not the IP owner obtains a favorable expert opinion from the Korean Patent Attorney Association (KPAA) before his warning.

---

[1] Supreme Court case No. 79Da2138, rendered Feb. 26, 1980. In this decision, the Supreme Court ruled that there is no reason to differentiate IP cases from other cases.

Benefits on Utility Model Applications in Korea: Valuable addition

In addition to patents, a further form of IP protection in Korea is a utility model registration. A UM is called as a petit invention that does not have the same level of inventive step as patentable inventions.

In general a UM provides the same remedies for infringement such as injunction, damage compensation, criminal sanction, etc. But the duration of a UM protection is 10 years from the filing date. So UM is intended to the invention that needs protection in shorter time frame than can be obtained by patents.

In several jurisdiction, a UM can be obtained without substantive examination on novelty and inventive step for IPR. However, in Korea a UM must be registered to be IPR through substantial examination of novelty and inventive steps.

The key benefit of a UM lies in the lower level of inventive step. A UM can often be obtained for innovations that are only different to know technology. For example, an invention can be a UM while it may not necessarily meet the criteria for patentability. That means the standard for inventive step (non-obviousness) is often much lowered.

As for official fees and attorney fees, the UM protection is less expensive than the protection provided by patents. However, the protection period of 10 years is much shorter than 20 years of a patent. Therefore, an applicant should apply for a utility model in case the life cycle of the invention is short.

In sum, a UM is quick, cheap and easy to obtain than a patent. But a UM provides the same remedy for infringement as a patent such as injunction and damage compensation. Accordingly a UM can provides cost effective form of IP protection than patent in Korea.

POSCO v. Nippon Steel re: Patent Disputes and Invalidity Proceedings in Korea

In 2012, Nippon Steel & Sumitomo Metal (NSSMC) sued POSCO at the Tokyo District Court alleging patent infringements on technology for grain oriented (GO) electrical steel sheets of NSSMC. In the complaint, Nippon Steel also alleged that POSCO infringed trade secrets about GO electrical steel sheets of NSSMC.

Nippon Steel seeks 100 billion yen (approx. US$1 billion) compensation for damages and injunction against manufacture and sale of POSCO’s GO electrical steel sheets. The lawsuit is still pending in the first instance stage.

On the other hand, Nippon Steel filed another complaint to the State Court of New Jersey in April, 2012, too. This case is still pending, too.

Responding the patent infringement lawsuits, POSCO filed invalidity trials challenging validity of 4 patents of Nippon Steel at the Korean Patent Office (IPT of KIPO). Last week, the IPT of KIPO rendered the decision that all claims of one basic patent among the challenged 4 patents should be invalid because those are obvious over the prior art.

Upon receiving the losing decision, Nippon Steel announced by press release that they will immediately appeal the invalidity decision by the IPT of KIPO to the Patent Court.

Arbitration Procedures in Korea at KCAB

1. Arbitration Agreement

Parties may file a Request for Arbitration where the contract in dispute contains an effective arbitration agreement or when the parties agree in writing to resolve their disputes by arbitration. Where a case is “international” (i.e., where one party has its place of business outside of Korea or the place of arbitration is outside Korea), the International Arbitration Rules will apply by default, unless the parties agree otherwise.

2. Request for Arbitration (payment of filing fee and advance of costs)

Claimant shall pay a fixed filing fee when submitting its Request for Arbitration. Upon receiving the Request, the Secretariat notifies Respondent, who has 30 days to submit an Answer. The Secretariat will provide a pre-estimate of the arbitration expenses (including administrative and arbitrator fees) which the parties shall pay in equal shares prior to the commencement of proceedings. This advance will be re-calculated once proceedings are brought to a close.

3. Submission of Answer (Filing Counterclaims)

When submitting the Answer, Respondent may also file a Counterclaim, which may be consolidated with the existing claim and the amount in dispute shall be the sum of both claims. The Respondent will be charged a separate filing fee for its Counterclaim. If the Respondent disputes the jurisdiction of an arbitral tribunal or otherwise believes there is no basis upon which the arbitration may be conducted, they may make this submission in the Answer.

4. Arbitral Tribunal

In principle, the disputes under the International Rules shall be decided by a sole arbitrator chosen by the parties, unless the parties agree otherwise. When asked by the parties, the Secretariat shall provide a list of arbitrators with the necessary expertise and impartiality. If the parties are unable or unwilling to appoint an arbitrator, the Secretariat will make the appointment on their behalf. To this end, the KCAB may consult the International Arbitration Committee (IAC), which will assist in the appointment of a tribunal. In the event of a challenge by one party to the appointment of an arbitrator, the Secretariat will decide on the challenge, having first consulted the IAC.

5. Oral Hearing

The Tribunal is fully in charge of hearings. Unless and until the Tribunal directs otherwise, all communications, written or verbal, shall take place directly between parties or between each party and the Tribunal.

6. Delivery of an Award

Once hearings have concluded, an Award is rendered by the tribunal. When all outstanding arbitration expenses have been paid, the Secretariat shall deliver the Award to the parties.

7. Enforcement of an Award

An Award rendered by the Tribunal is binding upon the parties. The Secretariat shall deliver to the competent court the Award and a copy of the document proving that the Award has been delivered to the parties. Parties may obtain a writ of execution based on the arbitration Award either in a Korean Court or abroad.

Arbitration in Korea at KCAB (The Korean Commercial Arbitration Board)

Usually, many license agreements have arbitration clauses. Accordingly IP lawyers have to handle arbitration issues inevitably and we have been assisted and represented our clients regarding arbitration matters.

KCAB (The Korean Commercial Arbitration Board) was established in 1970 and had been duly approved as an official arbitration institution in the Republic of Korea. As international trade and commerce increases, disputes have been arising. In case parties decided to use arbitration, KCAB has been frequently chosen to resolve disputes.

There are two kind of dispute resolution systems ensuring enforceability of their decisions; judicial and arbitration proceedings. Due to its strict confidentiality, arbitration is not as well known while it has been used as typical ADR process.

Arbitration only handles such disputes related to contracts with arbitration agreement in it or a separate written agreement. For KCAB, a model Arbitration Clause must be included in contracts as follows: “All disputes, controversies, or difficulties, or differences which may arise between the parties out of, in relation to, or in connection with this contract, or for the breach thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Korean Commercial Arbitration Board and under the Laws of Korea.”

KCAB has developed rules and practice to meet users’ high and various demands and then would become a new arbitration hub in northeast Asia. KCAB recognizes the paramount need to be neutral, independent and internationally minded administrator in order to deliver the most reliable, efficient and world class dispute resolution services.

Usually litigation in foreign country can be costly, time-consuming. KCAB arbitration can provide fast, impartial and confidential resolution of business disputes, and sometimes cheap compared to litigation.

Korea is a signatory state of the U. N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) since 1973. Also KCAB has signed around 50 international cooperation agreements with similar arbitral organizations throughout the world.

Filing a Divisional Application to Broaden Scope of Claim

Under the Korean patent law, it is not allowed to file a continuation application. Furthermore, after a notice of grant has been issued, it is not available to amend claims, and an applicant is only able to correct typo errors or to narrow claim scope. Any extension of the scope of protection by amendment after grant is not allowed.

The scope of a claim must be narrow enough to be novel and non-obvious over the prior arts. On the other hand, however, claims should be infringed by the competitor’s products, services or processes and thus the scope of claims must be broad enough to cover competitor’s product or process. Even after grant, an applicant may want to have a chance to change the scope of protection.

A divisional application can play a key role for this purpose because an applicant may prepare a new set of claims having broader scope of protection than those of original application. A divisional application can be tricky. It must be differentiated from the original application in the scope of claims. But the same specification can be used for a divisional application. And more than one divisional application can be filed based on an original application.

Substantive examination of a divisional application must be requested with fee for further prosecution. Request for the examination of divisional application may be filed within five years from a filing date of an original application.

In conclusion, therefore, through filing divisional applications, applicants can strategically obtain additional patents for broader scope of protection than those of a parent patent application; or build a patent portfolio, which means more proper and various forms of claims that can be designed to cover competitors’ products, services, or processes after monitoring them for 5 years at maximum.

Apple v. Samsung re: antitrust issues on SEPs in Korea Fair Trade Commission

Apple filed a complaint against Samsung to the Korea Fair Trade Commission (KFTC) which is the South Korea’s antitrust authority on April 3, 2012 alleging that Samsung abused standard-essential patents (SEPs). Apple asserted that Samsung’s lawsuit to seek injunction based on standard-essential patents during ongoing negotiations between two parties violated the Korean Antitrust Law. In particular, Apple contended in their complaint that Samsung misused SEPs for 3G wireless technology to gain an unfair advantage over the competition because these SEPs were supposed to be licensed under fair, reasonable and non-discriminatory (FRAND) terms to Apple.

On February 25, 2014, however, KFTC rejected Apple’s complaint. KFTC pointed out that Apple was first to file a patent lawsuit against Samsung and was responsible for following litigations in some aspects; and that Samsung tried to resolve disputes with the standard-essential patents based on the FRAND licensing terms. KFTC concluded that Samsung's lawsuit was a legitimate act to protect its patent rights.