Statistics on New IP Applications Filed to KIPO in 2013


KIPO published the annual report of 2013 that includes statistics of filing numbers.

In 2013, KIPO received 204,589 new patent applications that is 8.3% increase to 2012 year; 10,968 new utility model applications that is 11.7% decrease to 2012; 66,940 new design applications that is 6.0% increase; and 147,667 new trademark applications that is 11.4% increase to 2012. 

In total, KIPO received 430,164 new applications with an 8.4% growth compared to the total number of 2012. 





Reverse Payment Agreement violates Antitrust Law in Korea: the First case decision by the Korean Supreme Court for GSK v. KFTC case on Feb. 27, 2014

1. Background


GSK owned a Korean patent for ondansetron, antiemetic drug and sold with a tradename as Zofran. Dong-A Pharmaceutical Co. developed a generic version of ondansetron and received a cease and demand letter from GSK. Both parties started lawsuits but soon signed a settlement agreement and withdrew lawsuits.

2. Settlement of Patent Infringement Litigations


By a Sale & Supply Agreement for ondansetron between both parties, GSK granted Dong-A to sell the product to large sized hospitals. Instead, Dong-A shall neither make nor sell any competing medications including ondansetron to Zofran. GSK agreed to pay large amount of money to Dong-A by cash every year for 5 years. Further GSK promised to offer additional significant amount as incentive for high sales performance.

3. KFTC investigation and lawsuits


KFTC investigated GSK/Dong-A patent settlement case and decided that the settlement was a reverse payment agreement that violated the Antitrust Act of Korea. In particular, KFTC found them violating Art. 19 of the Monopoly Regulation and Fair Trade Act (MRFTA) and fined GSK about US$2 million and Dong-A US$1.5 million.

4. The Supreme Court Decision


GSK raised an appeal to KFTC's decision to the Seoul High Court but the court confirmed the KFTC decision. And GSK further appealed the case to the Supreme Court.

GSK argued that the settlement was within the scope of his patent right. As they pointed out, Art.59 of MRFTA (Korean version of antitrust law) has provision that “This Act shall not apply to any act which is deemed as a justifiable exercise of the right under the Copyright Act, the Patent Act, the Utility Model Act, the Design Protection Act or the Trademark Act.”

However, the Supreme Court rejected GSK's argument. The court opined that a settlement with reverse payment violates antitrust law if a patentee may maintain his monopoly by the reverse payment and thus affects adverse effect on fair and free competition in the related market. In the decision, the court suggested several factors in finding any violation or liability. Those can include the amounts of reverse payment to the opposing party and anticipated profit of the patent owner, patent litigation cost, time span and period for non-compete, etc.

On the other hand, the Seoul High Court stated in their decision that when the subject patent is obviously invalid or the competing party has not infringed the patent, any settlement with reverse payment shall be regarded as being anticompetitive and shall be violation of antitrust law.

Korea is scheduled to implement the patent and drug MA linkage system that is a Korean version of the Hatch-Waxman Act system from March 15, 2015. Under the new system, the first generic company may obtain 12-month market exclusivity. Such exclusivity may cause motives or incentives for reverse payments between the patent owner and the first generic. In order to avoid antitrust violation issue, accordingly, it is recommendable to closely review the first decision of the Supreme Court on the reverse payment case.

Patent Marketing Approval Linkage

The FTA between Korea and USA includes provisions regarding the patent drug market approval (MA) linkage. Pursuant to the KORUS FTA, Korea has to fully implement patent drug market approval linkage from March 15, 2015. The key changes are summarized below.

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 regarding 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 an NDA holder and a 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. 12-Month Stay on Generic Drug Entry


Within 45 days from the receipt date of the notice, the Patentee may file: a patent infringement action or a scope confirmation trial before the Korea Intellectual Property Tribunal (KIPT) against the generic drug. Further, the patentee/NDA holder may request KFDA to take an action stay generic drug entry for 12 months from the receipt date of the notice from an ANDA applicant. Such stay shall y apply only once to each generic applicant.

5. First Generic's 12-Month Marketing Exclusivity


The first applicant may obtain first generic marketing exclusivity for 12 months over other generics. The first applicant for this marketing exclusivity means : (a) to be the first filer of ANDA application or skinny (paper) NDA applications that are similar to 505(b)(2) applications in USA; and (b) to be successful in obtaining an IPT decision or a court decision from challenging actions against listed patents including a scope confirmation trial or invalidation action. The actions must be filed before filing a generic approval application.

6. Forfeiture of 12-Month Marketing Exclusivity


The first generic's marketing exclusivity shall be forfeited if the ANDA applicant failed to obtain MA within 12 months from the filing date; or failed to launch generic within 2 months from the date that the generic may be marketed.

7. Substantial Differences from the HWA system of USA


The patent MA linkage system in Korea may share basic principle with the HWA system of the U.S. Upon reviewing the Bill to the Drug Act and the draft of KFDA regulations, however, we can find that many details will be quite different from those of HWA. In order to grasp practical implications, it is better to compare two systems in detail after the Korean version has been fixed. The FTA of Korea and U.S. set the deadline to implement a full system of patent MA linkage in Korea: March 15, 2015. Therefore, we will certainly have final versions of law provisions and regulations within this year. We will provide you with them when they are available.