Patent Term Extension (PTE) Based on MA for Drug Inventions in Korea

1. History of Changes

The patent term extension system was first introduced in Korea on July 1, 1987. Under the 1987 Act, a petition for patent term extension may be filed only during the last three (3) years of the original term of the patent. Under the new 1990 Act, however, a petition for patent term extension may be filed within three (3) months from the date of the approval and six (6) months prior to the expiration date. The current law is basically the same as that of 1990.

Some Changes to the current patent term extension system went into effect on April 3, 2013. The key change to the current system is limiting the number of PTE instances from multiple available chances to only one. Under the current PTE system in Korea, PTE may be available only to the "first" regulatory approval for "a new chemical entity."

2. Subject Patent and Procedures

A patent is eligible for term extension if the patent is related to an approved medicinal or agricultural product, if the patent was unable to be practiced after grant due to pharmaceutical or agricultural regulatory approval requirements. Such a patent should claim a compound, composition indicating use, process of manufacturing, formulation for (1) an invention relating to a drug which requires a product approval under the Pharmaceutical Affairs Act ("PAA"); or (2) an invention relating to an agrochemical which must be registered under the Agrochemical Management Act ("AMA"),

Only registered patentee may apply for patent term extension to KIPO. If the patent right is jointly owned, all the patentees must jointly apply for an extension of the term.

An application for patent term extension must be submitted within three months from the date of the approval under the PAA or from the date of the registration under the AMA. The application, however, may not be submitted less than six months prior to the expiration of the original patent term. Also, a petition for patent term extension may not be filed after the expiration of the patent term. An application for patent term extension should be supported with evidence to show the reason for the extension.

3. Period and Number of Patent Term Extensions

The term of a patent can be extended only once. In case a product approval (or registration) is sought for multiple patents, the term is extended for each patent. However, in case multiple product approvals (or registrations) are sought for a single patent, the term is extended only for the first approval (or registration).

Prior to the current law, even an approval for a combination product whose components had been previously approved by KFDA could be the basis for PTE. In addition, the approval for a second use of an approved drug could also be the basis for PTE, since the approval was regarded as the "first" approval for the new use. Further, in some cases, even an approval for a new formulation comprising an approved active ingredient could be the basis for PTE, if the new formulation was not simply different in the dose of the active ingredient but was a different administration form compared to the previously approved drug (e.g., injection vs. tablet). However, under the current PTE regulation, PTE may be available only to the "first" regulatory approval for "a new chemical entity."

The period of PTE shall be the total length of non-working time to obtain authorization or registration under provisions of the PAA or AMA to work a patented invention. For example, for drugs, the period commencing from either the approval of a protocol for clinical testing from the government authority after obtaining a conditional approval to manufacture for clinical testing or the date the patent is registered, whichever is later; to the date that the final approval to market.

The maximum patent term extension obtainable is five (5) years regardless of whether the actual period of non-working caused by the statutory requirements under the relevant Act exceeds five years.

4. Appeal to the IPT and the Patent Court

If an examiner of KIPO rejects the petition or application for patent term extension, the applicant or petitioner may appeal to the IPT of KIPO. The appeal must be filed within thirty days from the date a certified copy of the rejection is served to the applicant or his agent. On the other hand, a 3rd party may challenge PTE through Invalidation Trial at the IPT of KIPO. If a losing party in the IPT proceedings wants to appeal against the decision of IPT, the party may bring a lawsuit to revoke the IPT decision to the Patent Court within thirty days from the date of receiving the decision.

Benefits on Prior Art Search to Korean Language Documents

Korea becomes one of the largest pools of patent publications in the world. In every year, KIPO receives over 350,000 domestic patent applications with specifications written in Korean. Furthermore, Korea already had the largest number of patent applications per year in the world in several technology fields. For example, Korea is the leading country in semiconductor chip area and LCD or OLED display panels. The table below shows the statistic of LCD panel market shares in 2012.

Accordingly, it is necessary to search and review patent materials in Korean for prior art searches. Nonetheless, it is really difficult to fully understand Korean texts because Korean is a language far remote from English. Usually it has been our experience that we can often find a critical prior art written in Korean that was never considered during patent examination in EPO or USPTO.

Search is not simple. Rather it requires expertise in strategy and deep understanding of technology. We have been entrusted for prior art search by large companies who have multinational patent litigations. Our experienced experts can provide high value-added search strategy and results for analyzing and compiling of patent database information.

While there are a lot of search and analysis experiences in smart phones, semiconductor, video data processing, auto parts, just as an example, we listed up technology areas in detail regarding Display technology.

1) LCD

i) TFT: TFT structure, metal wiring, LTPS polysilicon semiconductor, Oxide semiconductor, Organic semiconductor,
ii) Pixel layout (patterned pixel)
iii) Organic/inorganic insulating layer, C/F, BM, column spacer, Color filter on array, Black matrix on array
iv) Liquid crystal mode: TN, VA, SVA, IPS, PLS, OCB, PDLC
v) Timing controller, Data/Gate Driving IC, COG, ASG, Backlight dimming
vi) LED, optical film (LGP, prism, diffuser, microlens), polarizer
vii) 5 mask/4 mask/3 mask process, nanoimprint, inkjet, Roll print

2) OLED

i) TFT: TFT structure, metal wiring, LTPS polysilicon semiconductor, Oxide semiconductor, Organic semiconductor, buffer layer
ii) Emitting material: EL, Quantum Dot, HITL, HIL, HTL, EITL, EIL, ETL
iii) PDL(pixel defined layer), Spacer, anode/cathode, Top/bottom emission display
iv) Encapsulation, polarizer
v) Fine metal mask, nanoimprint, inkjet, Roll print
vi) Protection Window

3) Miscellaneous

i) Touch screen panel
ii) Flexible display
iii) Digital Information Display
iv) Rounded display
v) 3D display
vi) Liquid crystal lens
vii) Smart watch

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.