Tips for Saving Cost in Korea

There are several ways to save the cost of prosecuting a patent application and maintaining once it has been granted. And the key to considerably lowering the expense is to reduce the number of claims by incorporating multiple claims.

There are three ways in which reducing the number of claims can help save cost. First, an applicant can save cost during substantive examination, where the applicant must pay the total amount of US$37 multiplied by the number of claims in addition to the official fee of US$121. Second, once the patent has been granted, the applicant can reduce the amount of annuities, where they are charged based on the basic fee of US$36 multiplied by the number of granted claims in addition to the official fee of US$42. Lastly, the applicant can save the cost of translating the claims and the costs of prosecution and maintenance.

Much like EPO and JPO, multiple dependent sub-claims are permissible under Korean patent law. And for PCT route applications, it is recommendable to redraft claims to reduce the number of claims by using multiple dependent claims before starting the international phase.

But the Korean Rule of claim dependency is different from that of the EPO and the USPTO. According to the Korean Regulation, “No claim referring to two or more claims shall refer to another dependent claim to which two or more claims are referred.” This is to avoid high complexity caused by limitless dependent sub-claims. Therefore, the number of claims must be reduced within the limitation of the Rule in Korea.

In closing, an applicant can effectively reduce the number of claims without altering the scope of claims, and accordingly is able substantially to cut the cost of prosecuting an application and maintaining the granted patent.

Check Points & Actions Must Be Considered Before Enforcement Actions

Patented claims must be valid and infringed in theory. However such claims are not common in reality. Accordingly a patentee must check strength of his patent before enforcing his patent against accused infringers. To be a valid patent claim, it should be strong enough to sustain invalidity challenges. The scope of the claim must be narrow enough to be novel and non-obvious over the prior art. On the other hand, a claim should be infringed by the competitor’s product or process. For this purpose, the scope of a claim must be broad enough to cover competitor’s product or process. These are contradictory and it is really hard to achieve desirable balance between two opposites.

Before filing a patent infringement lawsuit, it is desirable for a patentee to check strength of each patented claim based on thorough prior art search. Usually, it is necessary to fix any errors in issued patents, protect claims from possible invalidity challenges through amending claims to be novel and non-obvious over the prior art; and further pursue claims directed to competitor’s products or process if possible.

Two ways are available to amend patented claims after granting a patent in Korea. Before a patent infringement action, a patentee may amend claims as precautionary measure through ex parte proceeding at the IPT of KIPO. Namely, the first way is an independent petition to request amendment as like re-issue request in the U.S. Actually, Korea use a different terminology of “correct” for granted patents rather than “amend” for pending application before grant. It is to differentiate from each other because two terms do not have the same meaning.

The second option to amend a patented claim is correlated with an invalidity proceeding. During invalidity proceeding, a patentee may request to amend granted claims as a defense. It is very common to file a motion to correct patents during invalidity proceeding. This is inter partes proceedings between a patentee and a challenger and consolidated in invalidity proceeding. Both parties may argue whether or not such amendment to be allowed.

A patentee may amend granted claims of a patent within the scope of original disclosure and within the scope of protection of the patent as granted. In reality, post grant corrections of claims are allowed within a very limited scope. The correction must be made to (1) narrow a claim, (2) correct typological errors, or (3) clarify ambiguous description. The correction must not broaden or alter the scope of the patent right.

Recent Developments of KIPO Examination Capability

According to WIPO statistics, Korea has been ranked No. 4 in the number of patent filings with KIPO, and No. 5 in the number of PCT application filings in the recent several years. KIPO announced that they achieved one of the fastest examinations in the world. KIPO has over 1,000 members including about 700 patent examiners. Among the patent examiners, nearly 40% of the examiners have doctorate degrees and the others are well qualified as they passed a high standard national examination.

KIPO has been serving as both an international search authority and an international preliminary examination authority for international applications under the PCT since January 1, 2006. The USPTO, which files the largest number of PCT applications in the world, has designated KIPO as a competent international searching and examination authority for international applications filed at the USPTO under the PCT. The USPTO decision can be interpreted as recognition that KIPO’s examination capabilities meet world standards. According to KIPO, their fees are much less than those of the USPTO and the EPO.

Applicants can compare the quality of examination, costs and conveniences of each patent office to conduct international searches and preliminary examinations of PCT applications. According to KIPO, Microsoft, Intel, Hewlett-Packard, Google, 3M and Kimberly-Clark have used KIPO as their PCT International Search Agency.

Under the circumstances, foreign applicants may obtain a search or examination report within ten months after filing a patent application in Korea. We believe that the applicant, like Microsoft Corporation, might benefit from KIPO’s highly qualified and speedy examination capabilities.

Data Exclusivity (DE) in Korea

In pharmaceutical industry, data exclusivity (DE) is an important IP right. DE is to protect the value of extensive pre-clinical and clinical data that establish a drug’s safety and efficacy, clinical indications and uses.

KFDA provides such DE through PMS (Post Marketing Surveillance) system. Before the expiry of PMS period, no generic drug is allowed to market. During PMS period, third parties cannot obtain approval for generic versions of the same product unless they can submit data that are (1) different from the data submitted for the first approval; and (2) equivalent to or exceeds the scope of data submitted for the first approval. There is no real case to obtain before expiry of PMS in Korea so far. Therefore, such PMS system has played an effective Data Exclusivity for drug developers.

Two categories of DE exist as follows:

1. New Drug – 6 years from marketing

    A. New Chemical Entity (NCE)
    B. Ethical Drugs different from already licensed drugs in terms of active ingredients or mixture ratios
    C. Ethical Drugs different from already licensed ones in the route of administration, while containing the same active ingredients

2. Improvement Drug – 4 years from marketing

    A. Ethical drugs which are identical to already licensed drugs in terms of active ingredients and route of administration but distinctively different in added indications.
    B. Ethical drugs which are modification of the structure, formulation, or indication of existing drugs. It is generally an improved version of the original drug in terms of safety, efficacy or convenience.

KFDA Guidance on Mobile App for Medical Use

KFDA* announced that the Safety Guidelines for Mobile Medical Applications should be applied on December 31, 2013. The gist of guideline is summarized as follows:

1. Subject App

All mobile platforms including smartphone, tablet PC and smart watch for the medical use may be subject to the guidelines. But the scope shall be limited to the Apps whose use meets the definition of a medical device under Article 2 of the Medical Device Act.

According to KFDA, the guidelines would be applied to the apps below:

   A. Apps that remotely control medical devices
   B. Apps that display, store or analyze data acquired from medical devices
   C. Apps that transform the mobile platform into a medical device by using attachments such as electrodes or sensors
   D. Apps that act as a medical device by using sensors within the mobile platform
   E. Apps that perform patient-specific analysis and provide diagnosis or treatment recommendations.

2. Required Marketing Approval

Before launching a mobile medical app, the publisher shall obtain market approval from KFDA. It is required as like a medical device. It must meet the safety requirements of KFDA guidelines; i.e., Criteria and Standards for the Electrical and Mechanical Safety of Medical Devices, Criteria and Standards for Electromagnetic Safety of Medical Devices, Standard of Medical Device Software Validation, etc.

Furthermore, the applicant must meet the guidelines about the activities to collect, store and process personal medical information. He or she must protect personal information properly pursuant to the KFDA Guidelines of Approval and Examination of U-Healthcare Medical Devices.

* KFDA officially changed its name to the Ministry of Food and Drug Safety (MFDS) in March 2013.

Litigation Costs and Attorney Fees

Official fees for a preliminary injunction action or a permanent injunction action would be small rather than significant. Those would be about US$400. A lawsuit to the Patent Court is an administrative lawsuit that seeks to review the decision of the IPT of KIPO. Official fee for such action to the Patent Court would be small, too (about US$400).

As to a lawsuit for damage compensation, official fees are correlated with the amount of claims. For the first instance lawsuit, a plaintiff must pay 0.5% of claimed amount as official fee. Accordingly, it could be considerable amount.

In terms of attorney fees, two options are usually used in Korea; Flat fee in lump sum or hourly charge based on actually spent time. Considering the unpredictable nature and complexity of patent infringement litigation, it is extremely difficult to estimate the total cost of litigation. Just as a rough estimate, it would be approximately US$150,000 ~ 300,000 for a district court action for a straightforward litigation case. In a big case with complex and difficult technology issues, it may cost much more. In addition, translation of court documents into English will increase costs accordingly.

Korean laws allow the prevailing party to claim court costs and legal fees from the losing party. Official fees and legal costs paid to a court are usually reimbursed in full to the prevailing party. As to attorney fees, however, the Supreme Court has a regulation that limits the reimbursement of actual attorney fees. For instance, for a PI case, a prevailing party may recover about US$3000 per instance from a losing party; not more than US$10,000 in total. However, the amount for damage lawsuit is correlated with the amount of claim and ration of winning. That may be quite different. At any way, it is safe to assume that the amount as a reimbursement of legal fees could be substantially less than the actual cost.

Appeal Procedure

Appeal to High Court

The losing party may appeal the district court decision to a high court (a court of appeal). A notice of appeal must be filed within 14 days of the receipt date of the court decision. The appeal period cannot be extended. When a notice of appeal is filed, the district court will send all documents to the court of appeal, which dockets and schedules the case. Then, the court of appeal orders the appellant to submit an appeal brief.

There is no limit on grounds of appeal. The court of appeal will review the case on de novo basis including factual errors and legal errors. An appellee will submit an opposing brief to an appeal brief. Both parties may submit new arguments and new exhibits during the appeal procedure. After exchanging briefs, the court set oral hearings. Usually it takes less than 1 year to a judgment in an appeal court.

Final Appeal to the Supreme Court

The losing party in an appeal proceeding may appeal the decision of the appeal court to the Supreme Court. The notice of re-appeal to the Supreme Court must be filed with the appeal court within 14 days from the receipt date of the high court decision, which is not extendible. Again, the court of appeal will send the documents of the case to the Supreme Court.

The court dockets the case and order the petitioner to submit a final appeal brief within 20 days from the receiving date of the court order. The period cannot be extended and the case will be dismissed if the final brief has not been filed within the period. The opposing party will be served the final brief the Supreme Court, and then can submit a rebuttal brief within 10 days of the date of the service. Exempting extraordinary circumstances, there is no oral hearing in the Supreme Court.

After briefs, the Supreme Court will review the final brief of the petitioner and the opposing brief of the respondent, and will decide whether the case will be fully reviewed by a panel of 3 or 4 justices.

The Supreme Court reviews only matters of law and therefore a matter of fact cannot be appealed to the Supreme Court. In case the appeal is based on factual errors of the low courts, the case will be dismissed within 4 months. Even though the appeal is directed to legal errors of the low courts, due to the excessive number of appeals to the Supreme Court, the Supreme Court can dismiss the appeals if the decision follows the statutes and precedents. It is called a refusal of further consideration in the Supreme Court.

The Supreme Court has given deference to the decisions of the Patent Court, and the Korean patent court plays the final decision maker as a matter of practice like the CAFC in the U.S.

Defenses of Defendant

Invalidity Defense

It is well settled that in case the patented invention lacks novelty over the prior art, the patent is unenforceable. Even before the patent has been invalidated through the separate invalidity proceeding, the patent shall be regarded as being void.

As for non-obviousness challenge within an infringement lawsuit under bifurcated system, the Supreme Court has maintained their firm position for a long time that the patent is enforceable before the invalidity based on the ground of being obvious over the prior art. However, the Supreme Court changed their position through en banc decision in 2012. Therefore, a defendant raise an affirmative defense based on obviousness of the patented invention.

The Korean Supreme Court en banc decision in 2012 is that in principle, (1) an issued patent is presumed to be valid; (2) an infringement court may not decide the validity of a patent; (3) arguing invalidity of a patent in suit shall not be a defense in an infringement action; but, as detour as a practical solution, (4) in case the patent in suit is clearly to be invalid due to lack of inventive step as well as lack of novelty, it is an abuse of patent right to seek the injunction and damages based on the patent. Therefore, in order to determine such abuse of a patent right, the infringement court may examine the validity of a patent due to lack of inventive step as well as lack of novelty.

As for standard of proof, presumption of validity is not strong. The challenger can meet his burden by preponderance of evidence, not by clear and convincing. For example, obviousness arguments will be in favor of invalidity where there is inevitable combination, no synergistic effect from combination, no unexpected result.

Other Affirmative Defense

An accused infringer may assert that his practice falls in the scope of publicly known technology in which he is entitled to freely use it. Under the Korean patent law, it might be a mirror image of obviousness arguments.

Further, prosecution history estoppel, experimental use, pharmaceutical clinical test, prior user right, intervening right can be used as defense. For instance, the patent right does not extend to acts done for experimental purposes relating to the subject matter of the patented invention. Further, clinical tests for the purpose of KFDA approval of generics does not infringe a patent right. Unlike the U.S. patent law, a declaratory judgment or inequitable conduct before the PTO defense is not available.

Defendant’s Motion Practice: Deposit Cost in Advance

When a plaintiff is a foreigner having neither a residence nor a business office in Korea, a defendant can file a motion that the plaintiff has to deposit the cost of suit in advance. In this situation, a defendant is not required to respond to a plaintiff’s complaint until a plaintiff deposits the estimated cost of the lawsuit. If the foreign party does not deposit by the date the court specifies, the court may dismiss the suit. In the case where the plaintiff is a foreigner and the defendant is a Korean, the Korean defendant usually file this motion to obtain enough time for considering defense and counterclaim. The foreign party may deposit a bond.

Cease and Desist Letter – Warning Letter

When a patentee finds his patent right being infringed by a third party, he may send an alleged infringer a cease and desist letter. It is to warn the infringer of legal responsibilities and demand the cessation of infringement activities. Furthermore, the accused infringer, at least from the day of receiving the warning letter, will not be able to deny his intent or negligence in the infringement activities.

This warning letter plays an important role in proving the claim of damage compensation as well as the criminal liability for infringement. For criminal action, it is required to prove the intent of an infringer regarding infringing acts of a patent without doubt. In particularly, infringer’s intent in the infringement shall not be presumed even if a patent marking is present on the patented product. With a warning letter, it is easy and convenient to prove the infringer’s intent beyond reasonable doubt. Therefore, a patentee has often sent warning letters to infringers to point out the ownership of the patent and their infringing activities.

Patent Marking

A patentee may obtain a preliminary or permanent injunction against infringers without patent marking. Unlike the injunction remedy, however, the patentee must prove the intent or negligence of infringers in order to obtain damage compensation from the infringers. There are several ways to prove intent or negligence of an infringer. Patent Marking is not required but really effective and convenient in proving the intent or negligence of infringers. The Korean Patent Act allows patent marking on a container or packages, and there is no specific format required. For a process-patent marking, the patentee should specifically indicate that the patent is a process patent, e.g., "Korean Process Patent No. xxx."

Indirect Infringement - Contributory Infringement

Korea does not have inducement clause within the Korean Patent Act. Thus, an inducement is outside the indirect infringement stipulations under the patent law. However, if one actively induced someone to infringe the third party patent, the active inducer might assume responsibilities for torts under civil law.

There is a specific provision regarding contributory infringement in the Korean Patent Act. Section 127 of the Patent Act stipulates that the act to make or use a non-staple part to construct a patented invention can amount to infringement of a patent right. According to the Supreme Court, a patentee assumes burden to prove that an alleged product is only for practicing the patented invention and is non-staple. In case the accused person is found to have knowledge of infringing behavior; commits a contributory act for direct infringement; and the accused product has no substantial non-infringing uses of the accused products, the accused person is liable for contributory infringement. The liability is the same as a direct infringement.

Criminal Sanction on IPR Infringer

Criminal Sanction on IPR Infringer

Infringement of IP is a crime of trespass of personal property. An infringer may be punished up to 7 years in imprison and/or about US$100,000 fine. It is not uncommon that infringers of IP rights, especially trademarks and trade secrets, have been punished under the Korean criminal law.

To prosecute an infringer of IPR as criminal, an accusation by a proprietor is required. According to the Criminal Procedure Act, the proprietor must accuse an infringer within six months of the date of knowing the infringement and the criminal. The beginning point of the limitation starts from the moment of infringement. Also, the accusation to an infringer will be effective to a corporation as a vicarious liability. An infringer of IPR has been often prosecuted in Korea.

Vicarious Liability on Company

The Patent Act stipulates that the court can punish not only a person who committed an infringement but also a legal entity by imposing fines. The separate accusation against a legal entity is not required because it is not a separate crime from the personal infringer’s. The Supreme Court held that even if the patentee’s request applies only to a person, not to the legal entity, the legal entity may be punished without the expressed accusation of the patentee. This is because the legal entity is liable for the infringement done by its employee.

The Korea Trade Commission

Like the ITC in the U.S., the Korea Trade Commission ("KTC") has authority to take border measures against unfair trade. The KTC can stop products infringing IP from being imported and exported. Anyone can request the KTC to survey. And the KTC may investigate on its authority. The KTC can decide to investigate within 30 days of being commissioned. The KTC may stop export and import of infringement products and further destroy the infringing products in the possession of Customs. If an infringer violates the KTC’s decision, the KTC can sanction the infringer by imprison up to 3 years and/or fine. If the losing party wants to appeal against the KTC’s decision, he can bring an action to appeal before to the Seoul Administrative Court or a District Court within 30 days of receiving the KTC decision. The action is an administrative lawsuit and reviewed by a panel of 3 judges.

Damage Compensation

It is tort to infringe an IP right in Korea, too. As a civil law principle, damage of torts will be awarded for those which have been the direct and natural consequence of the defendant’s infringing activities.

Unlike U.S. courts, Korea courts never award "punitive," "exemplary" or "aggravated" damages for infringement of IP rights. No treble damage award is possible. It is same to all cases no matter how serious infringements are. And there is no willful infringement clause and thus intent or negligence is treated as being same. There are 3 ways to calculate damage.

1. Lost Profit

Where a patentee and an infringer compete, lost profit award is an appropriate remedy. Lost profit is the sum of profit that a patentee would have gained if the patent had been not infringed. According to the Korean patent act, lost profit of a patentee can be calculated by multiplying the patentee’s profit per product unit by total numbers of product that could be sold but for infringement.

Lost profit is not presumed and a patentee has the burden of proof. A patentee must show reasonable probability that it would have made infringer’s sale. Patent infringement can reduce patent owner’s profit in a number of ways. First, the infringer may divert sales from the patent owner. Second, competition from the infringer may cause the patent owner to reduce his price, and thus earn lower profit on those goods he continues to sell. A third possible effect is that the infringement causes the patentee to suffer additional costs, such as increased advertising and marketing expenditures.

Courts have considered awarding damages for such asserted harms as lost future profits, injury to the patent owner’s reputation resulting from the sale of poor-quality infringing goods, and the infringer’s accelerated entry into the marketplace once the patent expires. For diverted sales, a patent owner must show demand for the patented products, absence of acceptable non-infringing substitutes, manufacturing capability to exploit demand, and profit.

A patentee may seek lost profit for convoyed sales but the functional relationship between a patented invention and convoyed sales must be established.
The total amount of damage is largely correlated with the profit per unit. When incremental profit (so called marginal profit or contributory profit) is used for the computation of damages, the total amount will be large. Incremental profit is the profit that the patentee could have made when he sold just one more patented product, and is the amount excluding only the variable cost from the sale price of a product. Based on the incremental profit, the patentee may receive the greatest amount of monetary remedy that he could have gained through the use of a patent.

The Korean Patent Act added another manner of presumption. When the patentee is capable of supplying products competing with the infringing product, he may presume that his lost profit is equal to the amount calculated by multiplying his profit per unit by the number of units sold by the infringer. As a rule, lost profit is measured as the difference between the profit that the patentee would have earned but for the infringing sales and the profits the patentee actually earned. Profitability should be calculated using incremental cost, which excludes the costs that would be incurred in both the actual and but-for markets. The difference in costs, whether expressed on a total or per unit basis, is the incremental-cost concept.

The major pitfall when measuring incremental cost is that many firms allocate both fixed costs, e.g., depreciation, and common costs, e.g., marketing and administration, to their internal accounts that might be used to calculate incremental costs. Accounting and statistical analysis are often required to remove these allocations to calculate profits properly.

2. Infringer’s Profit

A patentee may recover damage based on the infringer’s profits. Under Korean practice, it is the most common for a patentee to seek damage compensation based on the profit of infringer. It is well settled that the meaning of profit for this purpose means the actual profit. In principle, there might be three ways to compute the profit of the infringer in case of the presumption of the profit of the infringer to be the damage: (1) total sales minus the cost of production (2) total sales minus the cost of production, the distribution cost, general management expenses, and taxes, and (3) total sales of the infringer minus the variable cost according to the increase of production. The actual profit here means the amount of money in which all costs are subtracted from the sale price.

Courts have often used statistic data published by the Korean Customs. The data is used for levying income tax through calculating profit by sales x standard profit ratio in a specific business. The data are published every year and accessible on the website.

Usually the infringer defends himself by proving the actual profit is small. A patentee may not complain that the infringer operates his process inefficiently or unprofitably and should have generated greater profits by taking an alternative course. The patentee must take the infringer and actual profits made as he finds them. The maximum payment is the total profit made by the infringer. Thus, if different patentees seek accounts of profits for different infringing activities within the single business of the infringer, the total amount payable cannot exceed the total profits made.

3. Reasonable Royalty

This is based on a hypothetical method treating the patentee and the infringer of the patent as if they had signed a license agreement. The licensee, i.e., that infringer, has to pay the license fee that would have been agreed for such a license by reasonable contractual partners. The position of the infringing party is fundamentally no worse than that of a contractual licensee. He does not have to pay a particularly high license fee as punishment for the infringement, but instead is treated not as though he had infringed the patent but as if he had signed a license agreement with the patentee for the use of the invention.

Legal rulings have always turned away from adding "penalty surcharges" to the license fee as a sanction in response to the infringement of the patent. For this reason it is not material whether the party committing the infringement has done so willfully or only by negligence. This meant that the infringement of a patent represented only a minimal risk for the party committing the infringement. The least fortunate infringer, judged guilty of infringing a patent, would pay the license fee that he would have had to pay if he had initially sought to obtain the approval of the patentee for the use of the invention. However, the royalty rate applied to the infringer is lower than or the same as the ones agreed upon without litigation and there is little incentive to be an honest licensee. Therefore, the conservative approach taken by the courts has been the target of severe criticism.

The reasonable royalty functions as a minimum compensation for infringement, although the Korea law does not expressly provide for this. The formula concerning the calculation of reasonable royalty is the total sales of defendant with respect to the infringing product multiplied by the reasonable royalty rate. Factors to be considered when determining a reasonable royalty rate depends upon whether plaintiff has granted similar license to third parties and at which specified rate of royalty.

If the plaintiff has not provided license to third parties, then the reasonable royalty rate will be determined by the court based on assertions and evidence provided by the parties, including the official industry statistics. In sum, reasonable royalty will be determined based on the rate of other existing license contracts, the established customs of the field of commerce field that the patent pertains to, and others.

4. Court’ Discretion

In practice, it is really hard to prove an exact amount of manage caused by infringing a patent. Considering such difficulty, the Korean patent law allows that courts have discretion to decide a moderate and adequate amount of damage when the infringement has been found. In theory, it is possible not to award damage compensation to a patentee in case there is no sufficient evidence to prove an amount of damage, even though infringement has been found. Court desertion may prevent such unreasonable results. It eases the patentee’s burden of proof.

5. Apportionment

Apportionment is one of controversial issues. An infringer only has to account for profit from the infringing products or processes. Where only part of a product infringes, profits are apportioned between those which were caused by or attributable to the use of the patented invention and those which were not. However, where the invention is the essential ingredient in the creation of the infringer’s whole product or process, it may be appropriate not to apportion.

Before apportionment the infringer may deduct from revenues allowable costs. The following costs may be deducted: relevant research and development costs; costs of construction or operating the plant or process; and for direct costs such as manufacturing and distribution costs. Income from the exploitation of any other technology results from the research and development must be deducted from the overheads.

Injunction

Permanent Injunction

An IP right owner will seek to enjoin an infringer at the beginning of a lawsuit through preliminary injunction. The nature of a patent right is the right to exclude others. Once the patent has been held valid and infringed, the patentee is entitled to the full enjoyment and protection of the patent right. The infringer shall not be allowed to continue his infringement.

Under Korean patent law, when the infringement of a patent is found, a permanent injunction shall be automatically granted. Only in extraordinary circumstances like patent misuse or substantial injury to the public interest may a court deny a permanent injunction.

Preliminary Injunction (PI)

Preliminary injunction is drastic and extraordinary remedy. Thus, a court allows preliminary injunction only in extraordinary circumstances. PI may be allowed when the circumstances are met by showing a reasonable likelihood of success on the merits, the existence of irreparable harm to the patent owner if a PI is not granted; the balance of hardship between the patent owner and the infringer. Further, a PI should not be against the public interest.

PI is often granted to a patentee in Korea. Under Korean patent law, the validity of a patent and its enforceability are presumed and further irreparable harm is presumed where there is reasonable likelihood of success. Therefore, preliminary injunction shall be granted when the accuser’s infringement is proved.

In contrast, in case a patentee has not practiced the patented invention within Korea, preliminary injunction will not be allowed because no irreparable harm is presumed. Further, in case it is probable that the subject patent will be invalid through invalidation proceeding, it will be hard for the patentee to obtain PI. Preliminary injunction may give full and final satisfactory remedy in advance before a main lawsuit, and can cause significant suffering to the other party. Accordingly, a PI case shall be carefully decided by a panel of three judges.

Patent Infringement Litigation Procedure

1. Complaint and Answer

A patentee may initiate a lawsuit by filing a complaint that includes the parties’ information, prayer of remedy and grounds why the defendant is liable to the plaintiff. The plaintiff may seek a court granting an order of barring the opposing party’s infringing manufacturing, marketing and selling activities; the seizure or destruction of all finished or half-finished infringing products in the opposing party’s possession and compensation for damages.

The defendant may submit a written answer to deny or accept the complaint within 30 days of being served the complaint. Furthermore, the defendant may file a counterclaim. But, due to bifurcated system about independent invalidity action, the defendant may not file a counterclaim to invalidate the subject patent.

2. No Discovery like the US type is available.

3. Briefs and Evidence as Exhibits

After the court has served the answer to the plaintiff, the parties are required to exchange briefs and exhibits. Each party may object to those exhibits that are irrelevant or inappropriate. The plaintiff ordinarily files his briefs at first, and then the defendant files his briefs in turn. A court may allow the parties having another opportunity to exchange briefs before a preparatory oral hearing which is a kind of scheduling meeting. The court usually permits a 3~4 weeks period for each brief filing. The court usually rules on the admissibility of the objected exhibits in the oral hearing.

4. Oral Hearing

In the first oral hearing, the court will allow parties submitting their arguments and evidence and then will arrange the disputed facts and issues between parties. Through briefs, parties will provide the court with the nature of the controversy, evidence, legal contentions that the parties believe support their positions. The court will decide what issues are presented by both parties and how the case will proceed. It is likely for parties to have two or more oral hearings in patent infringement case.

5. Evidence

Korea does not have discovery procedures and jury trials. All lawsuits are tried by judges. Because judges are skilled in the rules of evidence, judges are usually lenient in allowing evidence to be introduced.

  A. Document Request

Each party can request the court to order the other party to submit relevant documents in issues. The party having the document must submit the document to the court. The court can enforce this order by monetary sanctions and evidentiary sanctions. Evidentiary sanctions include not allowing responding party’s submission of the evidence for his benefits, and more importantly may regard the requesting party’s assertion as true. The document request is not applicable to attorney client privilege documents, attorney work products and confidential information.

  B. Protective Order

In case a party insists the document is private, trade secret, or others, the court may order the party to submit the document and then examine without the other party’s participation. Hence it is not permitted for a respondent to refuse document submission for trade secret reasons. Only the party may seek court’s protective order on his information.

  C. Expert Opinion

The parties can retain experts to testify on their behalf. The party applying for expert opinion should submit expert candidates and manner of expert opinion, and further should pre-pay the cost. If the party applying for expert opinion wins the case, the prevailing party will recover the cost from the losing party. Patent cases need prudent expert opinions that usually need considerable time and cost.

  D. Court Inspection

Court inspection is adopted for judges to examine and analyze actual objects using the five senses of judges. The court inspection can be the most powerful means for proof if judges recognize the nature and contents of the subject evidence adequately. For example, judges may compare patent’s product with infringer’s product through watching experimentations or seeing or touching by themselves. Though ordinarily it is not easy for judges to comprehend the technical peculiarity through court inspection, the court often allows parties court inspection.

  E. Special Hearing for Technical Issues (Markman Hearing)

A court usually set an oral hearing for examining technical features. Both parties may present technical issues including background technology, claimed inventions, elements of the invention and comparison of elements between the patented invention and the accused product or process. Parties are permitted to use drawings, documents, power point presentations, models, real products, demonstrations, and others. It is one of the most important proceedings for parties to be able to have an influence on judge’s decision.

  F. Witness Examination

The party who calls a witness will conduct the first examination of the witness. The direct examination shall be done by using open-ended questions. For instance, any leading questions, which allow only for a “yes” or “no” answer, are not allowed. The opposing attorney has a chance to cross examine the witness and he is allowed to use leading questions: cross examination. But the cross examination shall be limited to the subject matter raised during the direct examination. When the opposing attorney has finished his cross examination, the attorney who did direct examination has an opportunity to conduct redirect examination. The attorney again cannot use leading questions.

Parties may submit an affidavit as documentary evidence for direct examination of a witness. In the oral hearing, only crucial points of the affidavit are examined and other details can be omitted in that direct examination. Accordingly, sufficient time is allotted for cross-examination. When a witness is hostile and is not under the influence of the requesting party, the party may file a motion that the witness must be summoned and when the motion is accepted the party must submit main contents for direct examination in advance.

Basics on Claims under Korean Patent Law

1. Description requirement

Article 42, paragraph 4 of the Patent Act stipulates: "claims shall be supported by the detailed description of the invention and shall define the invention clearly and concisely." Claims must be supported by the detailed description of the invention. That means that the scope of each claim must be identical or equivalent to the subject matter described in the detailed description. Thus, an applicant should draft a specification to include a wide variety of examples with respect to the claimed invention.

KIPO maintains a rather strict attitude towards the support requirement through its narrow interpretation of the scope to be supported. As a practical strategy, a divisional application rather than an amendment of claims may be used to secure the broader scope of the protection and avoid prosecution estoppel. But, because it is required that the scope of a divisional application be within the scope of the original specification, in order to secure a broad scope of protection the original specification should include sufficient examples and the descriptions of its equivalents to support the claimed subject matter.

2. Claim Interpretation

  All Elements Rule

The scope of a patent is defined by the elements of a claim. It is well settled that each element in a claim is deemed material to defining the scope of the patented invention. Therefore, only when every element defined in a claim is found in an accused product or process, the accused product or process literally infringes the patent right.

  Doctrine of Equivalents

It has been long time for the Patent Court and the Supreme Court to adopt the doctrine of equivalents as a part of Korean patent law for interpreting claims.

The rationales of the doctrine of equivalents in Korea are similar to those of the U.S. Thus, it is true that if the accused product or process performs substantially the same function in substantially the same way to obtain the substantially same result of the patented invention, the accused infringes the patent in Korea.

In particular, the Supreme Court held that the accused product or process infringes a patent where an element of the patented invention is substituted with another element and, if (i) the technical concepts or principle to solve the objective of the patented invention and the accused invention are the same or common; (ii) the substituted element in the accused invention performs substantially the same function in substantially the same way to obtain the substantially same result of the patented invention; (iii) such substitution is obvious to an ordinarily skilled person in the art. However, the doctrine of equivalents shall not be applicable to the circumstances that (iv) the accused substitution was already known to skilled persons in the art at the time of filing an application and (v) the accused element was excluded from the claimed invention during prosecution.

  Prosecution History Estoppel

Based on the doctrine of equivalents, a patentee cannot regain his rights to any elements that were abandoned through an amendment or a response during prosecution. For example, when an element is excluded through an amendment in order to secure novelty and non-obviousness in response to the examiner’s rejection, an invention with an equivalent element is outside the scope of the patent.

The Supreme Court held that prosecution history estoppel should be applied in view of specification, opinions of an examiner from filing of the application to issuance of a patent and the intent of an applicant as indicated in the amendments and arguments during prosecution. Furthermore, in a patent containing more than one claim, the prosecution history of each claim should be independently reviewed to decide whether certain subject matter was intentionally excluded from the scope of the claim.

Basics of Patent Prosecution Process in Korea

Korea has the first-to-file rule. All unexamined applications are automatically published after 18 months from the filing date in Korea or the earliest priority date in a foreign country. In addition, after a patent application is granted and the patent is registered, the granted specification shall be published. As a third party observation, once an unexamined patent specification has been published, any party may submit any relevant information relating to the patentability of the application to KIPO in order to prevent granting a patent thereof. The third party may not reveal their indent through a straw man action.

In other side, an applicant may warn in writing an alleged infringer about possible infringement of the claimed invention after his application has been published. And the applicant may obtain reasonable compensation of damage from the alleged infringer. A reasonable amount of compensation will be determined from the date of receipt of the warning letter. The compensation, however, can be collected only after the registration of the patent application

A patent application will be examined only when an applicant requests the examination of the application within 5 years of the filing date in Korea or the international filing date for a PCT route application. If no request for examination is made by the deadline, the application is deemed to have been withdrawn.

A registered patent may be invalidated only through an invalidation proceeding in KIPO. Because the IPT in KIPO has exclusive jurisdiction on the invalidation trial, an infringement court case may not invalidate the subject patent.

Patent Prosecution Process 

Bifurcation – Separation of Infringement and Validity

Korea has bifurcated system that allocates decision power to separate authorities. Patent Infringement Issue and Patent Invalidity Issue must be decided by two separate and independent courts as shown below. Patent infringement and invalidity challenge may occur simultaneously but two proceedings are correlated. Invalidity defense is allowed in limited circumstances under patent Infringement lawsuits. A court may stay the infringement lawsuit proceeding on its discretion due to Invalidity proceeding.

Overview of Basic Structure

Legal System in Korea

There are three tiers of courts in Korea: the District Courts, the High Courts and the Supreme Court. The Supreme Court located in Seoul consists of a Chief Justice and 13 Justices. Korea follows civil law tradition. Accordingly, a decision of the Supreme Court does not have binding authority but since the lower courts follow the Supreme Court’s interpretation of a law, the effect of a Supreme Court decision amounts to a binding force on the lower courts. Neither the jury system nor punitive damage compensation exists in Korea.

The District Courts and its Branch Courts hear the first instance of cases. For example, a patentee must bring a patent infringement lawsuit before a District Court or a Branch Court of a District Court that has jurisdiction over the case. The High Courts are appellate courts. A panel of three judges hears patent infringement cases.

The Patent Court

The Patent Court is the court that specializes in IP, and is located in Daejon which is a city 200 km south of Seoul. The Patent Court is a high court having exclusive jurisdiction over all appeals of the IPT and KIPO. There are 5 panels of 3 judges and 17 technical experts assisting judges of the Patent Court as law clerks. They have different technical expertise, and thus ensure a broad coverage of technology. Further, most of them are former ex-examiners having at least 10 years experience examining patent applications at KIPO.

KIPO and the IPT

The Korean Intellectual Property Office ("KIPO") is located in Daejeon. Within KIPO, the Intellectual Property Tribunal ("IPT"), as Board of Appeal, handles appeals, invalidity proceedings, and proceedings to determine the scope of patent rights. Invalidation Petitions must be brought to the IPT, which has exclusive subject matter jurisdiction for the validity of patents, utility models, industrial designs and trademarks. KIPO has four examination bureaus: Trademarks & Design, Machinery & Metals, Chemistry & Biotechnology and Electric & Electronic.

Bifurcated System

Invalidity must be reviewed by IPT. The district court may not decide invalidity of a patent. Any party interested in the validity of a granted patent may initiate an invalidation proceeding by filing an invalidation petition to the IPT. The invalidation petition may be filed even after the expiration of the subject IP rights. A panel of 3 board examiners reviews the case and may allow oral arguments hearing for both parties.