Showing posts with label patent enforcement. Show all posts
Showing posts with label patent enforcement. Show all posts

Protection of “Trade Dress” in South Korea

Although the definition of “trade dress” is not specifically found in any IP laws of Korea, trade dress is protectable under the Unfair Competition Prevention and Trade Secret Protection Act ("UCPA"). 

In particular, the UCPA catch-all provision, Article 2(1)(j) protects a party's right to profit from work and intellectual property that it has produced at considerable effort or investment by prohibiting the unauthorized commercial use of such work and IP by others in a manner that contravenes fair trade practice or competition order.

Under the UCPA's "catch-all" provision, a party may not interfere with another person's right to profit by appropriating for one's own business use, without authorization, anything which the other person produced through considerable effort and investment in a manner that contravenes fair commercial trade practice or competition order.

This is general and broad to define any acts of unfair competition such as imitating the appearance of another person's product (i.e., the product's shape, pattern, color, gloss, or a combination of these attributes).

On September 21, 2016, the Korean Supreme Court (Case No. 2016Da229058) affirmed that the below trade dress of bakery shop is protectable under the UCPA's "catch-all" provision. The Court held that a bakery shop's general appearance (including the logo, outdoor signage and indoor layout) and other trade dress elements should be protected under the UCPA's "catch-all" provision.

This case is the first case that the Supreme Court specifically recognized the protection of such rights in shop interior and outdoor decorations under Korean law. The defendants were enjoined from unfair business practices by free riding on Seoul Lovers' goodwill, thus meeting the requirements of Article 2(1)(x) of the UCPA. By affirming this decision, the Supreme Court has clearly signaled that the High Court's interpretation was correct, and that trade dress in shop decorations can be protected in Korea under the UCPA. The court ordered defendants a permanent injunction on the manufacture and sale of the infringing products and damages.



Criminal Procedure of South Korea

1. Initiation of Investigation


Investigation is initiated upon discovery of the possibility that a crime may have been committed. The ultimate responsibility in all investigative procedures is in the hands of the prosecutor. Based on collected evidences, the prosecutor assess the validity of the judgment that a crime has occurred, and take appropriate measures upon this ascertainment.

2. Booking, Arrest & Detention


Booking denotes the formation of a criminal case after initiation. An individual subject to investigation becomes a criminal suspect once a criminal charge has been determined by the investigation agency. In principle, prosecutors or police officers must obtain a warrant issued by a judge to arrest a suspect; however, there exist certain exceptions to these warrant requirements in cases that necessitate "Emergency Arrest" and "Arrest of Flagrant Offender". The prosecutor may detain the arrested suspect with a warrant of detention issued by the judge upon request by the prosecutor within 48 hours from the time of arrest. A suspect may request a preliminary hearing prior to detention, and an arrested or detained suspect may request a review of legality to the court. Through such process, the suspect may be released.

3. Prosecution


Suspects are indicted in cases when there is a prosecutor’s decision that such suspects must stand trial. On the other hand, prosecutors may dismiss a case without indictment. The ground such as ambiguous location of the suspect, in which case further proceedings are unfeasible, will lead to a stay of prosecution.

4. Trial and Sentencing


A judge hears trial upon motions filed by prosecutors. Sentencing occurs when defendants are found guilty of their charges. The punishment may include death penalty, imprisonment and fine, etc.

Basics on Preliminary Injunction Lawsuits in Korea


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

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

1. The Urgent Necessity to Preserve a Right


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

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

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

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

2. Oral Hearing


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

3. IP Owner’s Liability


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

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



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

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.

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.

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.