■ Amendments to the Korean Patent Act, etc. (effective from July 9, 2019)  

On December 7, 2018, a legislative amendment to the Korean Patent Act, Trademark Act, Design Protection Act, and Trade Secret Protection Act finally passed a plenary session of the National Assembly.

This amendment will be effective from July 9, 2019, in order to redress distortions in the market and strengthen the protection infrastructure for intellectual property.

The main content of the amendments are as follows.

Outline

● Introduction of Punitive Damages System (Treble Damages)

- If an infringement of patent right, right to exclusive license or trade secret is regarded as deliberate (i.e., willful infringement), compensation for damages can be set up to three times the recognized damages amount; and

- In determining whether an infringing act is intentional or not, it should be taken into consideration whether an infringer is in a dominant position, the degree of the willfulness, the period and frequency of the infringing act, economic benefits that an infringer obtained from the infringing act, etc. Accordingly, the remedy for damages caused by the willful infringement will be strengthened.

Patent Act

● ​Standards for compensation of Royalty rates

- In the standards for compensation for infringement of patent right, the amount of compensation which can be claimed to the infringer will be changed from “normal” royalty to “reasonable” royalty, in order to expand the range of the compensation for damages.

● ​​Requirement to present specific working acts

- An alleged infringer denying the infringing act alleged by the patentees or exclusive licensees is required to present one’s own specific working acts.

- For example, in the case of the manufacturing process being a patented claim, even after the infringement is completed at the defendant’s factory, it will be possible for patentees to prove the infringement with the help of the new patent act.

Unfair Competition Prevention and Trade Secret Protection Act (UCPA)

● ​​​Relaxation of requirements for Trade secret

- Under the current UCPA, the information including a production method, sale method, useful technical or business information for business activities is considered as a trade secret only when it can be proved the information is maintained in secrecy with reasonable efforts. According to the Amendments, however, the requirements for trade secret will be relaxed to requiring only that it be maintained in secrecy even if there is no reasonable effort.

●​ Reinforce the penalties for infringement of Trade secret

- An act of infringement of trade secret, for purpose of obtaining an illicit profit or inflicting harm on the trade secret holder, such as taking trade secret outside of the designated area without authorization or continuously holding trade secret in disregard of trade secret holder’s request to delete or return the same, will be considered as infringement of trade secret and punished; and

- Penalties for infringement of trade secret will be increased as follows:

(For who use trade secret abroad or leak to any third party while knowing that the trade secret will be used abroad) Imprisonment for not more than 10 years or by a fine not exceeding about US$90,000 → Imprisonment for not more than 15 years or by a fine not exceeding about US$1,350,000

(For others) Imprisonment for not more than 5 years or by a fine not exceeding about US$45,000 → Imprisonment for not more than 10 years or by a fine not exceeding about US$450,000

●​ ​Increase the fines for attempt and conspiracy to infringement of Trade secret

- Fines for those who attempt or conspire to commit a crime of infringement of trade secret will be adjusted higher.​ 

 ■ Extent of patent right protection in Patent Term Extension (PTE)  

“Salt -problem”

Korean Supreme Court ruled new decision in ASTELLAS pharma (JP) vs. CorePharm (KR) that a new drug produced by changing/replacing a salt (solifenacin succinate) into/with other salt (solifenacin fumarate) but still comprising the same active ingredient (solifenacin) as a patented drug constitutes a patent infringement of the patent drug.

Previously, the Korean Patent Court ruled that the Korean Patent Act Article 95 extends only to the “subject product” for which permission of extension of the patent term is granted, i.e., solifenacin succinate.

However, the Korean Supreme Court ruled that the effect of the extended patent right shall not be restricted to the specific salt typed drug subject to the permission of extension containing the active ingredient of the patented drug.

It is considered that the above decision of the Korean Supreme Court expands the scope of patent right broader than before, considering the purpose of the Patent Term Extension.

●​ ​Extent of patent right protection in the case of Patent Term Extension (PTE)

- The protection scopes of extended patent right by permit/approval in Korea, Japan, U.S. and Europe are compared as follows. 

 ■ ​En Banc Decision of Korean Supreme Court  

Patent license-estoppel

Korean Supreme Court just rendered en banc decision, by which allows a licensee to request a cancellation (invalidation) of a patent registration against its licensor (patentee), and changed its previous decision that the licensee is not an interested party to file a cancellation (invalidation) request of a patent right.

 ■ ​Unification of the Exchange System of Priority Documents for Patent application  

As from December 1, 2018, the exchange system of priority documents with other foreign intellectual property (IP) offices, which differed depending on the country, was unified in Korea.

The Korean Intellectual Property Office (KIPO) is currently electronically exchanging patent priority documents with 19 countries. Conventionally, it was possible to exchange with the United States, Japan, China and European Patent Office (EPO) with the information of the application number and filing date of the first country application, but with the others*, a WIPO Access Code issued by the “first filing country” patent office was additionally required.

* Estonia, Spain, Sweden, Australia, UK, Denmark, Finland, India, Morocco, New Zealand, Brazil, Netherlands, Chile and Eurasian Patent Office

Starting December 1, 2018, WIPO Access Code is additionally required for exchanging priority documents with the United States, Japan, China and European Patent Office (EPO) in order to prevent the confusion of applicants and improve the consistency of the exchanged data. (The direct submission of a certified copy of priority document issued by the foreign IP office is still possible.)

In the following cases, the conventional method using the application number and filing date can be used until June 30, 2020, but after July 1, 2020, the applicant must provide the WIPO Access Code.

- a patent application filed in Korea (the second country) based on a patent application filed in United States, Japan, China and European Patent Office (EPO) (the first country)

- a patent application filed in Japan, China and European Patent Office (EPO) (the second country) based on a patent application filed in Korea (the first country)

However, when a U.S. application (the second country) is subsequently filed on or after December 1, 2018 based on a KR application (the first country), the applicant must additionally provide the WIPO Access Code issued by the KIPO to the USPTO.

In the case of PCT application, if the priority document is submitted at the time of filing the PCT application, there is no need to submit the priority document again at the time of entry into national phase, as before. 

 ■ ​Electronic Exchange of Priority Certificate Documents for Design Applications with USPTO  

The Korean Intellectual Property Office (KIPO) and the United States Patent and Trademark Office (USPTO) agreed to electronically exchange priority certificate documents for design applications starting December 1, 2018.

Accordingly, US applicant who files a design application in Korea or any foreign applicant who files the same in Korea, with a priority based on the US application may not submit directly a priority certificate document to the Korean Intellectual Property Office (KIPO) at the applicant’s selection.

Previously, it was necessary to submit a certified copy of priority document issued by the USPTO.

However now, when an applicant claims for a priority right based on a US Design application, if the applicant provides the WIPO access code and priority information (i.e., priority application number and filing date) only, without directly submitting the priority document, then the KIPO and USPTO will exchange the relevant priority document. (The direct submission of a certified copy of priority document issued by the USPTO is still possible.)

For your information, for the first time in the world, the KIPO and CNIPA has already begun the electronically exchange priority certificate documents therebetween for design applications since July 20, 2018.