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.