A. General Aspect To Contrary Normal Understandings
There actually are not very many patent infringement actions involving foreign companies which are instituted in Korea. This may be due to actual as well as perceived difficulties in the litigation of such actions in a Korean court against Korean companies.
While it cannot be denied that there has been some tendency to give the benefit of the doubt to local parties, the courts are now much better prepared to review the matter more objectively. The recent trend in the recognition of intellectual property rights in Korea is very positive. For some time, the Korean courts have begun to recognize that these rights, whether held by a domestic or a foreign person, must be protected to ensure continued growth and development of the Korean economy. Therefore, it can be said with confidence that in most cases, if well-prepared, and well-documented, cases of infringement can be easily defended even where the plaintiff is a foreign party. In this vein, the interpretation of the scope of claim for patent matters by both the Korean Industrial Property Office (KIPO) and the court is found to be objectively made, regardless of the nationalities of the respective parties.
As a first step, it is required to confirm the information in patentee's possession and to obtain more information, if necessary, regarding the infringer's identity, assets, size of infringing operations, location, etc. in order to determine the most effective course of action.
2. Issuance of Warning Letters
Upon conclusion of the investigation and an analysis thereof, a strongly-worded letter may be sent to the infringer. Such a letter may include ordering the infringer to cease and desist the infringing activity, demand an accounting thereof and a public apology, along with the surrender of all infringing goods by a specified date. A warning letter has, on its own, no legal effect since it is meant to merely coerce the infringer in an amicable manner. However, it is recommended that a well-drafted warning letter will put the infringer on notice that a patentee will not hesitate to take any legal actions against it should it continue its infringing activities. Furthermore, failure to stop the infringing activities after receipt of patentee's warning letter(s) serves the purpose of establishing the infringer's negligence and intention to infringe.
The issuance of a warning letter is an option available to the patentee that is more effective against infringers of relatively small scale. In addition, a hastily dispatched warning letter may be counter-productive since the infringer, provided it is able to, can simply disappear and continue to produce infringing goods from an unknown location, or abandon altogether the infringing activity.
3. Prevention of Infringement
The patentee does not have to wait for the outcome of a full-blown hearing to obtain cessation of the infringing acts since a preliminary injunction is an available speedy remedy in patent infringement actions.
Under the Korean Patent Act (KPA), the remedies available for patent infringement are a permanent injunction and a preliminary injunction. A permanent injunction is a final and conclusive judgment in favor of a patent right holder, entitling him/her to compensation for damages and restoration of reputation. A preliminary injunction is a temporary court order issued to prevent further injury to a patent right holder and may be issued before a final and conclusive judgment is rendered. With a preliminary injunction, only the cessation of the infringing act can be demanded of the defendant.
In practice, it is generally recommend to file a preliminary injunction action for three major reasons: it is considerably faster than obtaining a permanent injunction; legal expenses are therefore proportionately less; and the most important remedy, the cessation of infringing acts, can be obtained. Although the preliminary injunction is a temporary remedy, the court's order has the same practical effect as that of permanent injunction.
A brief outline of the proceeding of a preliminary injunction and a permanent injunction is as follows:
a) Preliminary Injunction
As the rightful patent owner, patentee may apply to the court for a preliminary injunction to stop the infringement. If and when granted, a preliminary injunction is the fastest civil action and the most powerful tool available to patentee to stop the patent infringement. As such, please note that in order to obtain a preliminary injunction from the court, patentee does not have to establish intention to infringe or negligence on the part of the infringer. Consequently, patentee may apply for a preliminary injunction without first sending a warning letter.
In this action, the court first determines whether to hold hearings or simple conferences when an application for preliminary injunction is filed. These hearings and simple conferences are the same to the extent that both parties can attend and present their respective arguments and evidence to the court. The main difference between them is that hearings require stricter formalities than simple conferences. In practice, it is customary for the court to hold simple conferences for preliminary injunctions. Moreover, the court is not required to state the reasons for its decision on the preliminary injunction applications if the court holds simple conferences.
The court usually takes from three to six months in conducting the examinations and rendering a judgment. If the court rejects the preliminary injunction application, the plaintiff (patentee) can appeal to a higher court. If the higher court upholds the original court's decision, then a final appeal to the Supreme Court is available. On the other hand, if the court grants a preliminary injunction, the defendant (alleged infringer) may either (I) file an objection to the decision with the issuing court, or (ii) file with the same court, a petition demanding that the plaintiff file for a permanent injunction. In the latter case, the plaintiff must then file for a permanent injunction. Otherwise, the preliminary injunction granted by the original court will become null and void.
b) Permanent Injunction
As noted, the court's grant of a permanent injunction provides a patent right holder with a final and conclusive judgment from which compensation for damages and restoration of reputation can be claimed. The restoration of reputation comes in the form of a public notice of an apology and the cessation of any infringing act(s). Since KPA does not clearly provide for a method of calculating the amount of damages due to patent infringement, and if the plaintiff fails to sufficiently prove the amount of damages, the amount of damages is usually deemed to be an amount equivalent to the royalties which the plaintiff might ordinarily expect to obtain.
In general, the action which is claiming compensation for damages incurred as a result of the infringement, must be initiated within three years from the date on which the patentee learned of both the damages and the infringer. However, in no case can the patentee bring such action more than ten years after the date of infringement.
Upon the filing of a permanent injunction, the court is required to hold hearings and to render a judgment stating the grounds therefor. The court usually takes six months to one year to examine and render a judgment in the first instance. An appeal can be filed with a higher court which considers the case de novo. A final appeal to the Supreme Court is also available, but only on points of law.
4. Criminal complaint for violation of KPA (Korean Patent Act)
Under the KPA, a violator is subject to a maximum of five years imprisonment or a maximum fine of 50 million Korean won. Criminal investigation commences upon the filing of a criminal complaint by an injured party. Such a complaint must be made within six months after the patentee learns of the infringer concerned. A criminal action coupled with a preliminary injunction against an infringer generally creates more than sufficient pressure on the infringer to accept plaintiff's demands without much resistance.
Accordingly, such aggressive actions against an infringer of a patent may significantly reduce the pressure the patentee is experiencing in their business activities.
5. Seizure of Infringing Products
The KPA does not specifically provide for a seizure of infringing products. However, the KPA does provide that the patent right holder can demand the prevention or cessation of the infringing acts. The KPA also provides that it shall, if it deems the patent right holder's request to be reasonable, order other appropriate measures to protect the patent right holder against the infringement. In practice, one of the measures granted by courts is seizure of the infringing product.
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