South Korea: Prospective Changes In The Korean Intellectual Property Law Pursuant To The Korea - US Free Trade Agreement

Last Updated: 23 April 2008
Article by Eui In Hwang, Ji Hyun Kim and Yoo Geun Lim

1. Introduction

After an extensive negotiation period, Korea has finally entered into a Free Trade Agreement with the United States of America ("KORUS FTA") on April 2, 2007. Following a request from the US for supplemental discussions, additional terms were discussed and entered on June 30, 2007. Currently, both nations are waiting for the Congress (US) and the National Assembly (Korea) to ratify the KORUS FTA. In the KORUS FTA, many topics related to the Intellectual Property ("IP") were included and significant portion of the Korean IP law is expected to undergo reconstruction. The Korean government has already developed a new proposal and presented it to the National Assembly for review. In this article, details of some of the major prospective changes in the Korean IP law pursuant to the KORUS FTA will be discussed.

2. Patent Law

  1. Extension of Patent Term for Examination Delays

    Under the current Korean Patent Law, patent term extensions are only permitted for inventions pertaining to pharmaceutical products and agricultural chemicals, where the criteria for obtaining patent term extension is outlined by another area of law (i.e. Korean Pharmaceutical Affairs Law) - it provides that a patentee who fails to enjoy patent rights for more than two years due to the governmental approval process of ensuring the safety be given up to a five-year term extension. However the revised bill allows extensions of patent terms for all patents that suffered delays during examination. Where the patent grant was delayed "more than four years after the filing date" or "three years after the filing of a request for examination", whichever is longer, the patentee may apply for a patent term extension for the delayed period.

  2. Extension of Grace Period

    While the current law allows 6 months grace period during which an inventor may file for a patent application after his voluntary publication of the invention, the new bill extends such period to 12months. This revision would allow inventors with sufficient time to make their invention public, determine its value and file for the patent application.

  3. Abolition of Cancellation Action for Patents

Current Patent Law Article 116 stipulates that a patent invention which has not been continuously worked in Korea for a period of more than two year after falling under certain specified conditions may be cancelled by the KIPO or by the request of any interested party. This cancellation action would be entirely abolished by the new revision. However, considering that there had never been a case brought under Article 116 Cancellation, no great disturbance is expected to arise from such abolition.

3. Trademark Law

  1. Abolition of Requirement for Recordation of Exclusive Licenses

    The current Trademark Law Article 56, Section 1 requires an exclusive license to be registered before the KIPO to take effect. However, in real practice, there are many exclusive licensees, whowere given the authority from the trademark holder through a valid contractual agreement, but have not recorded the exclusive license before the KIPO. Under the current law, without recordation, these exclusive licensees could not proclaim their exclusive licensee status and rights against third parties. By the revision, the recordation requirement for validity of such exclusive license will be entirely abolished (though such recordation will be continuously required for protection against bona fide third parties), thus rendering greater authority and power to exclusive licensees in Korea. Through this change, non-registered exclusive licensees can readily and directly enter into legal suit against infringers.

  2. Recognition of sound and scent trademarks

    In addition to the recognition of color trademarks, as revised in the recent Trademark Law, the new bill proposes to include sound and scent trademark to the scope of trademark protection. Also, certification marks, which demonstrate certain quality or receipt of a certification by a particular authority, will be recognized under the new revision.

  3. Legal compensation for Trademark Infringement

Under the current Trademark Law, the basis for the calculation of damage on a trademark infringement suit lies on the actual damages suffered by the trademark holder. When such calculation is not feasible, unjust profits gained by the infringer or reasonable royalty may also be used to calculate damages. However, in actual practice, it is difficult for the trademark holder to demonstrate damage figures in an infringement case. According to the revision, a trademark holder may have the option to request for a statutory damage award, which would not exceed KRW 50,000,000 (Approximately USD 50,000). Therefore, the trademark owner can readily file for a suit for infringement without the need to prove exact damages.

4. Copyright Law

  1. Extension of Protection Period

    Currently, copyright may be protected for 50 years after the author's death (or 50 years from publication for corporate authorship). This copyright and neighboring right shall be extended to 70 years after the author's death (or 70 years after publication for corporate authorship). However, neighboring right on broadcast shall expire at 50 years after broadcast.

  2. Reproduction right for Temporary Storage

    There has been some controversy as to whether temporary storage on digital form (such as on Computer RAM) would constitute a copyright infringement and there has never been any rule adopted to regulate such temporary storage. However, in the revised bill, temporary storage would constitute unauthorized copying of a copyrighted work. In order to avoid any unfounded expansion of the definition with the development of technology, the bill sets forth exceptions such that if temporary storage is technically mandated during a normal operation, such temporary storage would not be considered an infringing activity.

  3. Prohibition of the Circumvention of Technical Measures

    Technical measures copyright holders may place to protect a copyright material may prohibit an authorized user from 1) accessing the material and/or 2) using the material. Currently, only the circumvention of technological measures for limiting use of thecopyrighted material is considered as a copyright infringing activity. However, the proposed revision extends the coverage to prohibit circumvention of technical measures for limiting access to the copyrighted material.

    Further, the revision further prohibits acts of incapacitating any protection placed on management of data, incapacitating a coded broadcast signals and manipulating or fabricating labels (such as on music records).

    With such enforcement measures on the circumvention of Technological matters, greater barriers would be placed against unauthorized circulation of copyright infringing products.

  4. Limitations on the rights of Internet Service Providers (ISP)

    Under the current Copyright Law, the same rules apply to all Internet service providers, regardless of the types of services each provide. In the revision, ISP's activities are categorized to include: (i) transmitting or allowing access to the copyrighted materials without modifying the contents thereof or allowing temporary storage thereof during the process, (ii) caching occurring during automatictransaction, or (iii) copying, or storing copyrighted materials on the computer of the ISP according to the command of the users. By such categorization and placing detailed exceptions to each of activity, a clearer standard has been set to scrutinized and regulate different activities of ISP.

  5. Statutory Damages

    Similar to the revision on the Trademark Law, copyright infringement provides statutory damages, which could be set at the maximum value of KRW 10,000,000(Approximately USD 10,000) and purposeful, commercial infringement would be set at KRW 50,000,000(Approximately USD 50,000).

  6. No recordation at movie theatre

The revision prohibits any recording activities during the showing of a movie film.

5. Judicial and Administrative Procedures related to protection of IP

  1. Confidentiality Order in IP litigation

    Most litigations involving IP issues involve disclosure of a party's trade secrets or proprietary information. However, there is no procedural protection currently in place to protect such disclosed information, and thus the parties were reluctant to submit any proprietary information to the courts, even if it were critical for the suit in issue. Accordingly, in the proposed revision, during any litigation of Patent, Utility Model, Trademark, Design Protection, Copyright, Unfair Competition Prevention and any other IP related issues, the court can issue a confidentiality order to the parties in the suit, respective attorneys and anyone else who became aware of the proprietary information during the suit. The Confidentiality Order would prohibit any of the involved persons from disclosing the proprietary information for any other use other than the suit in progress and in case of a breach of the order, the person may be criminally punishable. With such revision, the parties would be encouraged to actively participate and submit required documents and the courts could readily request for submission of necessary documents, which would promote fair trial to be heard in IP cases..

  2. Changes in Rules of Customs Office

    Currently, trademark holders or recorded exclusive licensees may record the relevant trademark with the Customs Office so that the Customs Office may monitor import/export activities of goods bearing the trademark and when suspected infringing goods are found, the Customs Office may confiscate them and notify the trademark holder (or recorded exclusive licensee) for clearance. While the Customs Law also stipulates such right to be conferred upon copyright holders, in practice, there has been no procedure in place to allow copyright holders to enjoy the same kind of boarder control activity. With the revision, a copyright holder can also record and receive a notice from the Customs Office, when suspected infringing goods pass through customs (Customs Law Article 235).

    Also, Customs Law Article 235, Section 5 allowed the importer/exporter to remit surety bond to the Customs Office when faced with customs confiscation and suspension to allow the goods to pass through customs. However, in the revised bill, importer/exporter of counterfeit goods and copyright infringing goods (copyright, neighboring rights, software copyright), no longer has such option to place bonds in order to clear the goods through customs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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