The Doctrine of Equivalents (DOE) in Korea

The rationales of the doctrine of equivalents in Korea are basically similar to those of the U.S. Namely, when an 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 product or process infringes the patent right. 

In particular, the Korean 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. 

On July 24, 2014, the Supreme Court further clarified the scope and meaning of the above (1) requirement of DOE; the technical concepts or principle to solve the objective of the patented invention and the accused invention must be the same or common. 

The patent claimed a cutter for dry seaweed. The seaweed cutter has cutting blades laid out in a grid pattern. Seaweed is placed on top of the cutting blades and pressed from top to down and then sliding down into a container through a grid-patterned box attached to the bottom of the cutting blades. The patented invention can achieve a cutting and storing of seaweed in a single process.

The accused cutter is different from the patented cutter in which the accused cutter has moving blades that move from top to down and cut seaweed. Instead, the patented invention does not have moving blades. Except the position of blades, other technical features of the two devices are the same. Two cutters perform the same function in the substantially same way and achieve the same result. 

However, the Seoul High Court denied patent infringement under DOE because the accused cutter did not meet the (1) requirement of DOE. The accused cutter cut seaweed in a different way from the patent technology; there is no the same technical principle of resolving the technical problem. 

The Supreme Court vacated the lower court decision. The Court held that the "essence or core of the technical idea" must be determined between two cutters in order to apply DOE and then found that two cutters used the same technical idea because it should be the incline of the grid patterned box that allowed seaweed to be automatically stored after being cut and it is found in two cutters although two cutters employed different embodiments. The Court found that the change to position of the cutting blades was obvious. The Supreme Court decision clarified (1) requirements of DOE under the Korean patent law. In practice, patentees may have higher chance to apply DOE under the recent decision.

Practical Points Under Korean Patent law on Joint Ownership of Patent in Korea

Under the Korean patent law, when there are joint inventors of a single invention, each inventor is entitled to be a joint owner in the right to obtain a patent of the invention. Or anyone may obtain the joint ownership through buying a portion of a patent ownership.

The joint owners of an invention before a registered patent must file an application for a patent together. Otherwise, the application shall be rejected or the granted patent shall be invalid.

In the absence of an agreement to the contrary, each joint owner has an equal partial interest in the invention as a whole. When a company is an employer of an employee inventor and the employee is a co-inventor, the company shall be a joint owner of the invention through assignment.

The Korean patent law provides that joint owners of a patent may freely make, use and practice the patented invention without consent to the other joint owners. In this regard, each co-owner does not have the duty to account profits to the others.

However, each co-owner may not assign his right of the patent in part to a 3rd party without consent of the other co-owners. Namely a joint owner may sell his own interest in the paten only when the other joint owners consent such an assignment.

Furthermore, under Korean patent law, a joint owner may not license the patented technology to a third party based on his co-ownership of the patented invention unless he has obtained consent of the other joint owners about the license.

The Korean Patent Act has specific provisions for such restrictions of joint ownership. This principle of the Korean patent law is to protect each co-owner from an unreasonable change of co-ownership.

For example, in case a joint owner may freely assign or license the jointly owned patent, other co-owners may be at the mercy of the co-owner. For example, in case a co-owner assigned his co-ownership to a large company and the other co-owner is a very small company and then a new co-owner large company may use and practice the patented technology as a whole independently without any duty of account profits to the other co-owners, the new joint may have the whole value of the patent and the small company does not have any profit.

 

However, joint owners may determine and vary their rights by contract. The statutory default rule under the Korean patent law controls unless there is an agreement to the contrary.

 

Reverse Payment Agreement between patentee and generic company violates Korean Antitrust Law

Recently KFTC announced to watch license agreements between patentees and generic companies under the patent and drug MA linkage system. That is a Korean version of the Hatch-Waxman Act system from March 15, 2015.

Under the new system, the first generic company may obtain 9-month market exclusivity. Such exclusivity may cause motives or incentives for reverse payments between the patent owner and the first generic.

In order to avoid antitrust violation issue, it is recommendable to closely review the first decision of the Supreme Court on the reverse payment case in Korea that was rendered on February 27, 2015 by the Korean Supreme Court. For information, the GSK vs. KFTC case is summarized in the below.

1. Background

GSK owned a Korean patent for Ondansetron, antiemetic drug and sold with a tradename as Zofran. Dong-A Pharmaceutical Co. developed a generic version of ondansetron and received a cease and demand letter from GSK. Both parties started lawsuits but soon signed a settlement agreement and withdrew lawsuits.

2. Settlement of Patent Infringement Litigations

By a Sale & Supply Agreement for Ondansetron between both parties, GSK granted Dong-A to sell the product to large sized hospitals. Instead, Dong-A shall neither make nor sell any competing medications including ondansetron to Zofran. GSK agreed to pay large amount of money to Dong-A by cash every year for 5 years. Further GSK promised to offer additional significant amount as incentive for high sales performance.

3. KFTC investigation and lawsuits

KFTC investigated GSK/Dong-A patent settlement case and decided that the settlement was a reverse payment agreement that violated the Antitrust Act of Korea. In particular, KFTC found them violating Art. 19 of the Monopoly Regulation and Fair Trade Act (MRFTA) and fined GSK about US$2 million and Dong-A US$1.5 million.

4. The Supreme Court Decision

GSK raised an appeal to KFTC's decision to the Seoul High Court but the court confirmed the KFTC decision. And GSK further appealed the case to the Supreme Court.

GSK argued that the settlement was within the scope of his patent right. As they pointed out, Art.59 of MRFTA (Korean version of antitrust law) has provision that “This Act shall not apply to any act which is deemed as a justifiable exercise of the right under the Copyright Act, the Patent Act, the Utility Model Act, the Design Protection Act or the Trademark Act.”

However, the Supreme Court rejected GSK's argument. The court opined that a settlement with reverse payment violates antitrust law if a patentee may maintain his monopoly by the reverse payment and thus affects adverse effect on fair and free competition in the related market. In the decision, the court suggested several factors in finding any violation or liability. Those can include the amounts of reverse payment to the opposing party and anticipated profit of the patent owner, patent litigation cost, time span and period for non-compete, etc.

On the other hand, the Seoul High Court stated in their decision that when the subject patent is obviously invalid or the competing party has not infringed the patent, any settlement with reverse payment shall be regarded as being anticompetitive and shall be violation of antitrust law.

Patent Term Extension (PTE) Disputes on Period and the Scope of Protection in Korea

Many generic drug companies challenged the validity of PTEs on period and the protection scope of extended patent rights.

The first issue for PTE disputes in Korea is whether the extended period is valid or not because certain periods of time included within the PTE should not have been included under the relevant statutes. The second issue is on the scope of the patent right protection for an extended term after the expiry of an original term.

1. Recent Decisions of IPTAB and Patent Court on Period Issue  

In principle, the "time period during which the patented invention could not have been worked" of the Patent Act starts on the date on which the test for safety and efficacy is initiated or the date on which the patent is registered (whichever is later) and ends on the date on which the regulatory approval is reached to the MA applicant. It is not the date of MA issuance.

Under the Patent Act, the "time period of delay attributable to the patentee" must be deducted from the total delay period. The period is periods for which the patentee is responsible for delay in the regulatory approval.

The IPTAB of KIPO and the Patent Court affirmed the above principle. In practice, The IPTAB and The Patent Court appear to recognise and confirm the present status of the granted PTE periods according to KIPO's practice.

Because many cases are still pending, the issue has not been settled yet. The Supreme Court shall decide the issue in not too distant future.

2. Recent Decisions of IPTAB and Patent Court on the Scope of an Extended Patent Right

 The Korean Patent Act Article 95 (Effects of Patent Right with its Term Extended by Permit, etc) “The effects of a patent right, the term of which has been extended pursuant to Article 90 (4), shall not extend to any other acts except the working of the patented invention with respect to such products for which approval, etc. was the basis for registering the extension (or where approval, etc. was obtained for any specific use of the product, with respect to the product adapted for such specific use).”

What is the effective scope of an extended patent right through PTE registration? Article 95 of the Korean Patent Act specifically limits the scope of the extended patent right to be effective within working of the patented invention with respect to the 'approved product.'

Accordingly, there has been disputes over how the terms "product" and "usage" in the above clause should be interpreted. However, there are as yet no definitive criteria or court decisions issued as to the interpretation of this issue.

Before the IPTAB of KIPO and the Patent Court rendered their decisions, the IP Courts of Japan issued their decisions. Because the corresponding provisions on PTE of the Japanese Patent Act are really similar to those of the Korean Patent Act, the interpretations of IP courts of Japan were closely watched by Korean patent practitioners.

For information, Article 68bis (68-2) of the Japanese Patent Law is described as follows: “a patent right the term of which is extended via PTE registration "shall not be effective against any act other than the working of the patented invention for the product which was the subject of the disposition designated by Regulation in Article 67, paragraph 2 of the Patent Law that constituted the reason for the PTE registration (when the specific usage of the product is prescribed in the disposition, the product used specifically for that usage)".

The Tokyo IP High Court stated in their opinion that "in light of the purpose of the PTE registration system and that of a patent infringement action, it is reasonable to understand that in the case of a patented invention relating to an ingredient of a medicine, a patent right whose duration was extended and by 'effectiveness/efficacy'and 'dosage/regimen' as the 'usage'." For example, the scope of an extended patent right based on a specific salt of API shall cover other salts of API.

Unlike the IP court’s decisions of Japan, the IPTAB of KIPO and the Patent Court of Korea held that the scope of an extended patent right based on a specific salt of API shall NOT cover other salts of API. Thus it was totally different interpretation. Namely, the scope of an extended patent right based on a specific salt of API only covers the approved Drug Product itself.

At present, the IPTAB of KIPO and the Patent Court maintain really strict interpretations on the scope of an extended patent right. Again, several cases are pending before the Supreme Court, this issue has not been settled yet. The Supreme Court shall decide the issue relating to the effective scope of a patent right extended via PTE registration in not too distant future, too.

 

Data Exclusivity (DE) Protection in Korea

In pharmaceutical industry, data exclusivity (DE) protection 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 in Korea as follows:

1. New Drug (NCE) – 6 years from marketing approval
   1. New Chemical Entity (NCE)
   2. Ethical Drugs different from already licensed drugs in terms of active ingredients or mixture ratios
   3. Ethical Drugs different from already licensed ones in the route of administration, while containing the same active ingredients
       
2. Improvement Drug (NCI) – 4 years from marketing approval
   1. Ethical drugs which are identical to already licensed drugs in terms of active ingredients and route of administration but distinctively different in added indications.
   2. 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.