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.

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[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.

Roche v. Celltrion re: Herceptin Patent Infringement Lawsuit over Biosimilar Herzuma

Celltrion, a Korean company developed a biosimilar Herzuma to Herceptin (trastuzumab) and obtained market approval (MA) for a biosimilar Herzuma (trastuzumab) from KFDA on January 16, 2014. It has been approved for treatment of early and advanced (metastatic) HER2-positive metastatic breast cancer as well as advanced (metastatic) stomach cancer.

Roche has marketed Herception for the treatment of HER2-positive metastatic breast cancer in 150 mg in Korea. However, for high strength of 440 mg, Roche obtained MA just January 26, 2014. Celltrion obtained MA of the first trastuzumab biosimilar for two strengths, 150 mg and 440 mg at the same time and will launch them soon.

Roche filed lawsuit against Celltrion alleging that Herzuma infringes Roche’s patents. More details will follow soon after they are available.

Menarini’s Priligy (Dapoxetine HCl) Use Patent held Not Valid as being Obvious

Menarini launched Priligy in Korea. Dapoxetine HCl is the active ingredient in Priligy tablets. Korean patent No. 719, 977 covers the branded products and is listed in Green List of KFDA. The patented invention is “Methods of Using Rapid-Onset Selective Serotonin Reuptake Inhibitors for Treating Sexual Dysfunction.” The patent at issue is not for a compound invention but for the second use invention. The Korean patent for the second use invention will expire on June 5, 2021. Several Korean generic companies filed invalidity proceedings to challenge the second use patent. Menarini will face generic companies’ challenges soon.

On August 23, 2013, the IPT of KIPO held that the patent in issue is not valid because the compound and its use have been disclosed in the prior art. There has been no challenge to the compound patent so far. The key issue for the second use patent was a new limitation of “on as as-needed basis” in claim language. The patentee argued that such a new limitation was not found in the prior art and made the claimed use invention being novel and nonobvious over the prior art. However, the IPT rejected the argument on the ground that such limitation is related to a method of administering a drug and thus such limitation may not be regarded as an element for a patent claim under Korean patent law.

The patentee appealed the IPT decision to the Patent Court and the case is pending.

EV Battery Patent Infringement Lawsuits – LG Chem vs. SK Innovation

Two Korean companies, LG Chem and SK Innovation are major suppliers for EV batteries to top 10 global car makers including GM, VW, Renault, etc. In 2012, LG Chem filed a patent infringement lawsuit against SK Innovation at the Seoul Central District Court. The court for the first instance trial held last Friday that LG’s patent was not infringed by SK Innovation.

The patent in issue is directed to the inorganic material-coated separator that is a key part of large rechargeable batteries for EV battery. The court held that SK Innovation’s inorganic material-coated separator has a different structure from the porous structure of the active layer coating the separator of LG Chem’s patented invention.

On the other hand, under the bifurcated system in Korean patent law, SK Innovation challenged the validity of LG Chem’s patent and was successful in invalidity proceedings at the IPT of KIPO and further at the Patent Court. However, the Supreme Court revoked the lower court decision of invalidity and returned the case to the Patent Court. The invalidity case is pending at the Patent Court.

LG Chem announced to appeal the first instance court decision to the Seoul High Court immediately after they received the losing decision.

Low Dose Entecavir Formulation in Korean Patent held as being Obvious by the IPT of KIPO

Entecavir is the active ingredient in Baraclude tablets of BMS. The drug has been sold for the treatment of chronic hepatitis B virus infection in Korea. When Korean generic companies noticed that a US district court found that entecavir would have been obvious in light of the prior art, they filed an invalidity trial to challenge the validity of the corresponding Korean compound patent, too. The invalidity case is pending in the IPT of KIPO.

On the other hand, Baraclude is covered by another patent for low dose formulation of entecavir. Several companies including those want to launch generic versions of Baraclude after expiry of extecavir compound patent, filed separate proceedings to challenge non-obviousness of law dose formulation over the prior art. The subject Korean patent is No. 757,155 that claims low dose entecavir formulations of 0.5mg or 1.0 mg for the treatment of chronic hepatitis B virus infection. The prior art discloses enetcavir compound, its use, a range of doses and animal test data, but did not disclose claimed doses.

On April 30, 2013, the IPT held that low dose entecavir formulations of 0.5mg or 1.0 mg should be regarded being obvious over the prior art. To the IPT decision, the patentee BMS appealed to the Patent Court and argued that a person of ordinary skill could have neither anticipated nor determined the claimed low dose formulations of 0.5mg or 1.0 mg entecavir from the prior art. Oral hearings were held two days for expert witness examination and BMS’s expert argued at the Patent Court that determining specific doses for human required numerous trials. The panel of 3 judges in the Patent Court will decide the case on March 14, 2014.

Canon v. Baiksan OPC – Patent Owner Canon Awarded US$14 million Damage for Patent Infringement in Korea

The patentee Canon filed many lawsuits against Korean companies. Canon alleged that local companies’ manufacturing and marketing of several printer cartridges for use in Canon and other branded printers infringed Canon’s patents. While local companies challenged validities of Canon’s patents, Canon saved their patented claims from invalidity challenges finally.

On June 7, 2013, the district court of Seoul Central District held that Canon’s patents were infringed and ordered that the defendant, Baiksan OPC must stop manufacturing and selling cartridges and further destroy infringing finished or half finished products. Further, the court awarded Canon about US$14 million as damage compensation.

There are 3 ways to compute damage amount under Article 128 of the Korean Patent Act. Among 3 ways of lost profit of the patent owner, infringer’s unjust profit and a reasonable royalty, the court applied the second method based on infringer’s unjust profit for Canon’s damage compensation.

According to Article 128, paragraph 2, it is possible for a patentee to seek damages based on the profit of infringer. The profit of infringer in the provision should be the actual profit that is the amount of money in which all costs are subtracted from the total sales. The cartridges were exported to foreign markets and the customs had records of sales. The patentee may obtain such data or real records through a court order. Accordingly, the only issue for computing damages in canon case is profit ratio of infringing goods.

In principle, a plaintiff can proves the profit with account data of an infringer. However, it is not easy to figure out accurate data because the infringer does not have a single item and thus can reduce the profit by allocating costs to the subject item. Sometimes the data produced by an infringer are not reliable, too.

Usually the patentee has used the balance sheets of infringers. However, the profit computed by such balance sheets cannot be accurate because the balance sheet of a company reflects final outcome of total business activities rather than a single subject product. As an alternative option, a patentee may use an official statistic number of the government. The tax department of the Korean government noticed an official data regarding an average profit ratio per each business area every year.

According to the official notices, average profits for periods of infringements were 10% for computer printer fields. Under the Korean patent law, courts have discretion to determine a moderate amount of damage to prevent non-compensation to a patentee even though the infringement is found but no sufficient evidence to prove an amount of damage exists. It eases the patentee’s burden of proof. Based on the provision, the district court computed damage of Canon’s patent infringement through the total sales of infringement x 10%. The total amount of US$14 million is a quite big number in the history of patent infringement litigation in Korea.

False Patent Marking

Many companies mark their products as patented by the patent number on the product or its packaging. Often they mark their products as patented by the patent application number on the product or its packaging before obtaining granted patent. It is false patent marking. More often many companies continue to mark their products as patented by the patent number on the product or its packaging after the expiry of the patent. That is false patent marking, too.

Patent marking may create consumer goodwill by suggesting that the product is innovative and further deter competitors to enter market with the same product. Even before patent granted, manufacturers may try to achieve similar effect through marking product with a patent application number. On the other hand, continued listing of an expired patent would continue to benefit the manufacturer, too.

In Korea, false patent marking can be charged as a crime. The person or company who did such false patent marking shall be imprisoned not more that 3 years or fined not more than KRW20million (about US$22,000). Several cases law show around US$5,000 fines for false marking.

The Korean Patent Act provides a cause of action against those who falsely claim that their products are patented. A company that falsely marks or advertises a product as patented can be held liable. However, it usually is not a cause of action for civil lawsuit including damage compensation. Without exceptional circumstances, false patent marking is within criminal sanction in Korea. Furthermore, under the Korean patent law, it does not require to falsely mark “for the purpose of deceiving the public” as like in the U.S. The intent or knowledge on false marking is enough.

Basically patent marking is not required by the Korean patent law. Without patent marking, a patentee may obtain a preliminary or permanent injunction against infringers. Unlike the injunction remedy, however, the patentee must prove the intent or negligence of infringers in order to obtain damage compensation from the infringers. Marking is an effective and convenient method to prove it and has been used ordinarily in practice.

Expedited Examination for Green Technology Patent Application

KIPO provided accelerated examination system for green technology patent application. It is to examine green technology patent application more expeditiously than normal track examination as well as accelerated track for other technology patent applications.

Korea enacted the Low-Carbon Green Growth Basic Act to promote new developments with low carbon and green growth. Under the new law, the government issues certification of green tech or financial aid to companies who are involved in green technology. Any inventions generated by such projects are eligible for the expedited examination. These include solar, wind, geothermal, tidal, wave energy, biofuels, energy storage technologies such as advanced batteries, other renewable energy techs. Also, it includes carbon capture and storage technologies, LED lighting, etc.

According to KIPO, an application may obtain examination result as the first office action within Ione (1) month from the request. It is really short time while it takes about 17 months on average to have the first OA for an ordinary application. In case an application is finally rejected and an applicant has appealed, the case will be processed as an accelerated appeal proceeding as well. The outcome of appeal will be provided within four months. Under normal appeal trials, it takes about ten months to be decided.

In order to request such expedited examination for green tech patent application, an applicant must submit a search report to KIPO. The prior art search report should be made from one of the official prior art search organizations designated by KIPO that includes Korea Institute of Patent Information, WIPS and IP Solution.

So far, examination results have been given within one month in all but a few cases that failed to satisfy the super-accelerated examination prerequisites. The fastest case to date took only 11 days from application to registration.

Pfizer’s Victory in Lyrica® Patent Infringement Lawsuit in Korea

Based on Pfizer’s Lyrica patent, Korean courts granted preliminary injunctions for patent infringement against two Korean pharmaceutical companies. The local companies launched a generic version of Lyrica last year. The active ingredient of Lyrica is pregabalin that is a known chemical compound and a derivative of GABA (gamma-aminobutyirc acid). Further, the pharmacological effect of pregabalin is known as a depressive neurotransmitter and has been sold as an anti-convulgent drug for a long time. Pfizer discovered a new medicinal use of pregabalin. The subject Korean Patent No. 491282 is directed to a new use of pregabalin for treating pain. It is a second use invention that is one of the main indications of Lyrica.

Korean companies challenged validity of the subject patent on the ground that the new use of pregabalin for treating pain can be anticipated or is obvious over the prior art. They alleged that the pain killing effect might be in the scope of anticipation of an ordinary skilled person because the prior art discloses the compound and its neurotransmitter depressing effect. Also, the blocking of certain neurotransmitter flow may be correlated with anti-pain effect. The IPT of KIPO and the Patent Court, however, maintained the patent by rejecting non-obviousness challenge. The invalidity proceeding has been reviewed by a separate authority rather than a civil court under bifurcation system and is pending before the Supreme Court as a final stage now.

In the meantime, the patentee brought lawsuit for seeking preliminary injunctions against generic companies before the Seoul Central District Court. Recently Pfizer won the cases and was successful in blocking selling generic version of Lyrica in Korea.

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.