Home Property Dealers Intellectual Property & Antitrust in South Korea

Intellectual Property & Antitrust in South Korea

Intellectual Property & Antitrust in South Korea

Under what statutes, regulations or case law are highbrow belongings rights granted? Are there regulations on how IP rights can be enforced, licensed or otherwise transferred? Do the rights exceed the minimum required by means of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?
IP rights are granted underneath the following legislative acts:
the Patent Act;
the Utility Model Act;
the Trademark Act;
the Design Protection Act;
the Copyright Act;
the Act on the Protection of New Varieties of Plants;
the Act at the Layout-Designs of Semiconductor Integrated Circuits; and
the Unfair Competition Prevention and Trade Secret Protection Act (the Unfair Competition Act).
Protection of geographical indicators can be afforded through the Trademark Act (if they’re registered trademarks) or via the Unfair Competition Act. There are numerous court instances recognising exposure rights, at the same time as there is no legislative act protective them.
IP rights which include patents, utility models, emblems, designs and semiconductor format layout rights are enforceable only after they’re registered with the Korean Intellectual Property Office (KIPO). Plant variety safety rights are enforceable upon registration with the Korea Seed & Variety Service. Copyright and alternate secrets and techniques do now not require registration to be enforced.


IP rights may be assigned (except for the moral rights) and authorized by using agreement between the events, on an exclusive or non-exclusive basis. Under the Patent Act, Utility Model Act and the Design Protection Act, an special licence is enforceable against a 3rd party if registered with the KIPO. A non-one-of-a-kind licence, if registered with the KIPO, might be enforceable against a successor of the patent proper or an distinct licensee after the non-distinct licence has been registered.
As a trendy rely, Korean highbrow property laws meet the minimal requirements hooked up by way of the TRIPs Agreement.
Responsible government
Which authorities are accountable for granting, administering or imposing IP rights?
The KIPO is responsible for granting and administering patents, logos, designs, software fashions and semiconductor format designs.
The Korea Copyright Commission, distinctive by the Minister of Culture, Sports and Tourism, handles copyright registration and dispute decision procedures. The Korea Seed & Variety Service is liable for administering (together with granting applicable registrable IP rights) the Act at the Protection of New Varieties of Plants.
The Intellectual Property Trial and Appeal Board (IPTAB) is an administrative tribunal beneath the auspices of the KIPO, and manages administrative moves relating to IP rights. Administrative actions earlier than the IPTAB include: (i) appeals in opposition to KIPO’s very last rejections of programs; (ii) invalidation moves; (iii) cancellation actions; (iv) scope affirmation moves; and (v) correction movements for patents, trademarks, designs, and software models.
All of these IP rights are enforced via judicial proceedings carried out via the court. In instances wherein importation or exportation constitutes an infringement of IP rights, the Korean Trade Commission (KTC) and the Korean Customs Service (KCS) might also put in force IP rights consisting of patents, emblems, designs and copyrights.
Proceedings to implement IP rights
What kinds of criminal or administrative proceedings are to be had for implementing IP rights? To the quantity your jurisdiction has each felony and administrative enforcement alternatives for IP rights, in brief describe their interrelationship, if any.
As for felony complaints for implementing IP rights, civil lawsuits are to be had (see question four). The first-example civil motion associated with patent proper, utility model right, designs, trademarks and plant range safety is heard via one of the following district courts, depending at the place of the defendant: Seoul Central, Busan, Daegu, Daejeon and Gwangju District Courts. A plaintiff may also report in the Seoul Central District Court at its discretion. An appeal towards the very last judgment of the district courts on a civil movement regarding a patent right, utility model right, designs, trademarks and plant variety safety rights are situation solely to the jurisdiction of the Patent Court.
Lawsuits regarding the infringement of IP rights apart from patents, application fashions, designs, logos and plant variety rights may be filed within the district court docket having jurisdiction over the location of the defendant, and appeals should be filed within the High Court in the equal jurisdiction.
As for administrative complaints, the KCS has the authority to capture and keep imported goods which might be suspected of infringing IP rights, such as patents. In addition, the KTC has the executive authority to impose administrative fines and sure corrective measures. Specifically, the KTC may also check out the import or export of products that infringe a Korean patent as an unfair alternate practice. Available remedies include: (i) corrective measures (eg, seizure and withholding of infringing goods on the border, or destruction of the infringing goods); (ii) administrative fines; and (iii) criminal penalties in case of noncompliance.
What treatments are available to a celebration whose IP rights have been infringed? Do those remedies vary depending on whether one utilises judicial or administrative review or enforcement?
Damages, permanent injunction and destruction of infringing items are to be had in a major motion for infringement of IP rights. The quantity of damages is constrained to real damages and punitive damages are not acknowledged. Instead of real damages, however, a copyright holder may declare statutory damages of up to ten million Korean gained consistent with violation (50 million Korean received in keeping with violation if intentionally infringed for earnings), and a hallmark owner may additionally declare statutory damages of up to 50 million Korean won. A everlasting injunction almost always attaches upon an infringement selection.
A initial injunction may difficulty while there is instant or present hazard of irreparable damage to the right holder. A preliminary injunction movement is a separate and awesome criminal proceeding from the primary movement. A initial injunction motion is brought earlier than the district courtroom having jurisdiction over the place of the defendant or in which a related foremost movement is pending. Preliminary injunction movements are nearly constantly inter partes.
See question three for the to be had administrative treatments.
Criminal actions can also be pursued in opposition to an IP proper infringer. An IP proper holder can also record a criminal grievance with the government (ie, police or a public prosecutor’s workplace) regardless of whether a civil action has been initiated.
Nexus among competition and IP rights
Do any statutes, rules or case law to your jurisdiction address the interaction among competition regulation and IP regulation?
The Monopoly Regulation and Fair Trade Act (MRFTA) simply states in relation to IP rights in article 59 that, ‘this Act shall not follow to lawful enforcement of rights beneath the Copyright Act, Patent Act, Utility Model Act, Design Protection Act or the Trademark Act’.
The Korea Fair Trade Commission (KFTC) defined on this regard in its Review Guidelines on Unfair Exercise of Intellectual Property Rights (IP Guidelines) that IP right enforcement may be restrained whilst such an act of imposing IP rights undermines loose and honest marketplace competition.
In addition, below article 107, paragraph 1 of the Patent Act, the KIPO Commissioner has the authority to supply a obligatory licence if it’s far deemed necessary to practice the patented invention to correct acts determined to constitute unfair competition in a felony or administrative proceeding.
Patent cooperation treaties and different agreements
Does your jurisdiction take part in any patent cooperation treaties or other comparable agreements?
Korea participates in, amongst others, the following patent cooperation treaties or different similar agreements:
the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs);
the Convention Establishing the World Intellectual Property Organization (WIPO);
the Paris Convention for the Protection of Industrial Property;
the Patent Cooperation Treaty (PCT);
the Universal Copyright Convention, as revised at Paris on 24 July 1971;
Protocol 1 Annexed to the Universal Copyright Convention as Revised at Paris on 24 July 1971 Concerning the Application of that Convention to Works of Stateless Persons and Refugees;
Protocol 2 Annexed to the Universal Copyright Convention as Revised at Paris on 24 July 1971 Concerning the Application of that Convention to the Works as Certain International Organizations;
the Universal Copyright Convention;
the Convention for the Protection of Producers of Phonograms towards Unauthorized Duplication of Their Phonograms;
the Budapest Treaty at the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure;
the Berne Convention for the Protection of Literary and Artistic Works;
the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks;
the Strasbourg Agreement Concerning the International Patent Classification;
the Trademark Law Treaty;
the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks;
the WIPO Copyright Treaty;
the WIPO Performances and Phonograms Treaty 1996;
the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisation;
the Locarno Agreement Establishing an International Classification for Industrial Designs;
the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks;
the Singapore Treaty at the Law of Trademarks, Regulations Under the Singapore Treaty on the Law of Trademarks and Resolution via the Diplomatic Conference Supplementary to the Singapore Treaty at the Law of Trademarks and the Regulations thereunder; and
the Marrakesh Treaty to Facilitate Access to Published Works for Persons who’re Blind, Visually Impaired, or otherwise Print Disabled.
Remedies for deceptive practices
With admire to emblems, do competition or consumer safety laws offer remedies for deceptive practices?
Under the Unfair Competition Act, anybody whose business is or may be damaged due to misleading use of a trademark may document an action searching for an injunction against such misleading exercise, destruction of the articles concerned and related facilities, and damages. A character who’s found to have engaged in such deceptive use of an indicator may be challenge to imprisonment of up to three years or a high-quality of up to 30 million Korean received.
Technological safety measures and virtual rights management
With appreciate to copyright protection, is WIPO protection of technological safety measures and virtual rights control enforced in your jurisdiction? Do statutes, regulation or case law restriction the ability of producers to incorporate TPM or DRM safety restricting the platforms on which content can be played? Has TPM or DRM protection been challenged beneath the competition legal guidelines?
TPMs and DRM are both covered by means of the Contents Industry Promotion Act and the Copyright Act. Both the Contents Industry Promotion Act and the Copyright Act restrict deactivation of TPMs with out lawful authorisation, and permits claims for injunction and damages in opposition to such acts. Any person who violates those laws can be difficulty to imprisonment or a exceptional.
There are not any express statutes or regulation proscribing the capability of manufacturers to contain TPM or DRM protection limiting the systems on which content can be played. In 2006, but, the KFTC imposed a corrective order and a exceptional on SK Telecom, a prime cellular telecom enterprise and MP3 tune issuer, for implementing an unique DRM coverage that changed into deemed to represent an abuse of its dominant market position. Specifically, SK Telecom adopted an special DRM strategy that handiest allowed MP3 documents downloaded via its very own track site, Melon, to be played on cell phones serviced with the aid of SK Telecom. The court docket reversed the KFTC’s selection, however, with the aid of figuring out that there has been no violation of opposition regulation as there has been no clean damage to purchasers and it turned into inevitable for the corporation to undertake an extraordinary DRM coverage whilst DRM requirements had not but come to be mandatory.
Industry standards
What consideration has been given in statutes, law or case law to the impact of the adoption of proprietary technologies in industry standards?
There isn’t any statute, regulation or court docket precedent expressly addressing the effect of the adoption of proprietary technologies in enterprise standards or the compulsory licensing of standard technologies.
The KFTC’s IP Guidelines mention the unfair enforcement of fashionable era and widespread crucial patents (SEPs) as an example of unfair exchange practices. In addition, the KIPO Commissioner can also supply a obligatory licence under the Patent Act to cope with unfair exchange practices determined by way of the KFTC.
The IP Guidelines set forth the subsequent as examples of unfair alternate practices, concerning the abuse of standardisation method or enforcing unfair terms or situations after a era has been adopted as the standard:
unfair agreement all through the negotiation technique for popular era selection referring to the transaction charge, extent, territory, counterparty or limit on development of the technology;
unfairly failing to disclose data regarding patent packages or registered patents to boom the probabilities of being adopted as the standard technology or avoid early negotiation of licence phrases;
unfairly circumventing a licence on FRAND phrases to increase monopolistic electricity in the market or exclude competitors;
unfair refusal to grant a licence to apply standard essential patents;
unfair discrimination of SEP licence phrases or imposition of unreasonable royalties; and
implementing licence phrases that unfairly limit the licensee of a SEP from implementing its patents which are related to the SEP or unfairly require the licensee to grant the SEP licensor a licence to the licensee’s non-wellknown vital patents.
To save you patent keep-up, the Guidelines deem the act of looking for injunction in opposition to a willing licensee to represent a ability restrict on marketplace competition. As opposite hold-up may want to occur if the licensor is against the law from filing an infringement action against even an unwilling licensee, the Guidelines nation that the following acts are not going to constitute an unfair trade exercise:
if a potential licensee refuses to comply with the selection of a courtroom or an arbitration body, or refuses to go into right into a licence settlement beneath the FRAND phrases when the specific information of the FRAND phrases had been objectively demonstrated in a court or arbitration proceeding and so on; or
if injunction against infringement is deemed to be the most effective treatment because of a capacity licensee’s approaching financial disaster or other motives for which the capacity licensee can not be anticipated to pay damages.
Competition regulation
What statutes set out opposition regulation?
The number one opposition regulation is the MRFTA. It changed into enacted on 31 December 1980, and have become effective on 1 April 1981. The MRFTA in particular prohibits:
abuse of marketplace dominance;
anticompetitive mergers;
unlawful cartels; and
unfair change practices
IP rights in opposition rules
Do the opposition legal guidelines make specific mention of any IP rights?
Article 59 of the MRFTA affords that the MRFTA shall not follow to any conduct that may be a valid exercising of rights underneath the Copyright Act, Patent Act, Utility Model Act, Design Protection Act or the Trademark Act.
Regarding the translation of article 59 of MRFTA, the IP Guidelines give an explanation for that ‘the valid exercising of IP rights approach exercising inside the scope of the highbrow belongings rights granted beneath the relevant laws’. Even in instances in which there may appear to be a legitimate exercise of IP rights in shape, if in substance it goes past the purpose of the IP gadget and in opposition to its essential purpose, then the MRFTA may be carried out.
Review and research of aggressive effects from exercise of IP rights
Which government might also evaluate or check out the aggressive effect of behavior related to exercise of IP rights?
The KFTC was mounted pursuant to article 35 of the MRFTA and is in price of imposing the MRFTA. The KFTC accordingly evaluations or investigates the competitive impact of conduct associated with the exercise of IP rights below the MRFTA.
The KFTC’s tendencies may be challenged via filing an objection or an administrative healthy to the Seoul High Court, whose decision may then be appealed to the Supreme Court.
In addition, if an infringer increases the defence of an abuse of rights or violation of MRFTA in an infringement motion introduced by using a IP proper holder, the courts can also evaluation the aggressive effect of the behavior related to the exercise of IP rights.
Competition-related remedies for private parties
Can a personal party recover for opposition-associated damages caused by the workout, licensing or transfer of IP rights?
A non-public birthday celebration can claim damages against a commercial enterprise entity or commercial enterprise business enterprise under MRFTA article fifty six(1) for any damages sustained because of the commercial enterprise entity or organization violating the MRFTA, except in the case in which the business entity or employer verifies that the violation turned into made neither deliberately nor negligently.
A non-public birthday party can also claim damages underneath article 750 of the Civil Act, wherein case the non-public party ought to prove intent or negligence with the aid of the enterprise entity or enterprise company. Under article 56(1) the MRFTA, the load of proving that there has been no intent or negligence is transferred to the business entity or business enterprise.
Competition guidelines
Have the competition authorities, or every other authority, issued recommendations or different statements regarding the overlap of competition regulation and IP?
The KFTC issued the IP Guidelines as noted above on 30 August 2000.
The IP Guidelines apply to the workout of IP rights, which includes patents, application models, designs, trademarks and copyrights. Although the provisions of the IP Guidelines are targeted on the exercise of patent rights, they also can be applied to other IP rights.
The IP Guidelines also are applicable to a overseas business entity which affects the domestic marketplace via an agreement, resolution or different act done domestically or across the world.
The IP Guidelines provide standards for reviewing an workout of IP rights associated with the following:
obtaining IP rights (transfer, furnish-again);
implementing IP rights via litigation;
granting of licences to IP rights;
IP rights pooling;
exercise of fashionable technology IP rights;
agreement agreements; and
exercise IP rights of a Non-Practising Entity (NPE).
Exemptions from opposition regulation
Are there factors or makes use of of IP rights that are specially exempt from the application of opposition law?
The MRFTA, in principle, prohibits resale price upkeep (RPM) sports underneath article 29(1) and sets out in article 29(2) the necessities for RPM of copyrighted works. There is an exemption, but, applicable to published copyrighted works (consisting of digital courses) selected by way of the KFTC via consultation with the applicable imperative administrative organisation.
Copyright exhaustion
Does your jurisdiction have a doctrine of, or corresponding to, ‘copyright exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine interact with competition legal guidelines?
Article 20 of the Copyright Act incorporates a provision that limits the copyright holder’s right of distribution under the doctrine of ‘copyright exhaustion’ or ‘first sale’.
Article nine(2) of the Act on the Layout-Designs of Semiconductor Integrated Circuits and article fifty eight of the Act at the Protection of New Varieties of Plants also are interpreted as implementing the doctrine of exhaustion or first sale.
In addition, the doctrine of exhaustion or first sale applies despite the fact that there may be no statutory provision.
The IP Guidelines provide an explanation for that, in which IP rights have been exhausted, an IP rights holder’s act of implementing a circumstance that restricts subsequent enterprise activities (eg, by means of enforcing conditions on the resale of products) will be deemed to fall outside the scope of justifiable exercising of IP rights.
International exhaustion of trademark is seen to were known while the Supreme Court ruled that parallel imports of actual merchandise did no longer infringe the trademark right (Supreme Court Decision No. 2002 Da 61965, nine June 2005). In addition, the Notification of Unfair Trade Practices related to Parallel Imports launched through the KFTC states that parallel imports of authentic products are accepted in precept, at the same time as unfair deterrence of parallel imports by trademark owners is unlawful.
With the exception of a lower courtroom ruling that regarded worldwide exhaustion of patent rights, however, there are no installed precedents for patent rights, so it still remains unclear whether parallel import is allowed.
Import manage
To what extent can an IP rights holder save you ‘grey-market’ or unauthorised importation or distribution of its merchandise?
According to the KTFC’s Notification of Unfair Trade Practices associated with Parallel Imports, which applies to trademarks, (i) if the parallel imported items are counterfeit goods, or (ii) if the parallel imported goods are trademarked goods with special specifications and high-quality, but there may be difficulty that those goods will misinform the consumers to accept as true with that the products are the same goods as those provided via an exceptional importer, because of a false indication of source, and so on, the trademark proprietor can also take important measures to limit the parallel importer from the usage of the trademark. Such actions will no longer represent a violation of the MRFTA.
The following acts of a trademark proprietor will represent unfair trade practices underneath article 23(1) of the MRFTA:
stopping the acquisition of actual items from an foreign places distribution channel;
placing regulations on dealers inside the managing of parallel imported goods;
discriminating in opposition to sellers managing parallel imported items;
rejecting or discontinuing product deliver from dealers handling parallel imported goods; and
limiting the sale of one-of-a-kind imported goods via shops handling parallel imported goods.
Jurisdictional interplay among opposition legal guidelines and IP rights
Are there government with unique jurisdiction over IP-associated or opposition-related topics? For instance, are there occasions wherein a competition declare is probably transferred to an IP court docket to meet concern count jurisdiction? Are there occasions wherein the resolution of an IP dispute will be treated by a courtroom of preferred jurisdiction?
Competition-related subjects are investigated and reviewed via the KFTC, whose choice may be appealed to the High Court and the Supreme Court. In different words, if the KFTC undertakes an investigation concerning an alleged violation of the MRFTA and imposes a disciplinary degree, the birthday party issue to the disciplinary measure may also file a cancellation healthy with the Seoul High Court. The Seoul High Court’s choice can also through appealed via either the difficulty birthday party or the KFTC. These opposition-related matters are not heard by way of the IP courtroom although they are associated with IP rights (see questions 2 and 3).
Merger overview
Powers of opposition authority
Does the opposition authority have the equal authority with admire to reviewing mergers regarding IP rights because it does with admire to every other merger?
Yes, the KFTC has the same authority with recognize to reviewing mergers related to IP rights as in other mergers. According to the KFTC’s IP Guidelines, article 7 of the MRFTA, which provides restrictions on commercial enterprise combination, similarly applies to mergers concerning IP. The IP Guidelines additionally offer that article 7 of the MRFTA can observe to any transfer or acquisition of IP rights which can be considered a fabric a part of the commercial enterprise, or to any exclusive licence agreement that has the equal impact as the switch or acquisition of such IP rights.
Analysis of the aggressive impact of a merger involving IP rights
Does the competition authority’s analysis of the aggressive impact of a merger concerning IP rights differ from a traditional analysis in which IP rights aren’t involved? If so, how?
No. The equal preferred for overview applies regardless of whether or not or no longer the merger involves IP rights.
Challenge of a merger
In what situations would possibly the competition authority challenge a merger concerning the transfer or awareness of IP rights? Does this range from the instances in which the opposition authority may mission a merger in which IP rights were now not a focal point?
The KFTC might also venture a merger concerning the transfer or concentration of IP rights if such switch or attention has full-size anticompetitive consequences. The standards governing mergers stay the identical, regardless of whether or not this kind of switch or attention entails IP rights.
Remedies to cope with the aggressive results of mergers regarding IP
What treatments are available to cope with aggressive results generated by means of a merger when those effects revolve across the transfer of IP rights?
The KFTC may first order the divestiture of IP rights or the mission of a related commercial enterprise, but if such measures are not able to relieve the anticompetitive outcomes, the proposed merger can be suspended or nullified. A obligatory licence will also be imposed. The KFTC has formerly imposed a treatment to enter into a licence agreement with certain content material to a patent proprietor that had refused to grant a licence or had offered unfair licensing terms constituted an unfair change exercise.
Specific competition regulation violations
Can the exercise, licensing or switch of IP rights create price-fixing or conspiracy liability?
Yes, the exercise, licensing or transfer of IP rights might also create antitrust liabilities if it goes above and past the scope and phrases of the IP rights. The Supreme Court has determined that a agreement settlement that reaches beyond the protection afforded by IP rights might also supply rise to antitrust legal responsibility. The IP Guidelines additionally discover the following forms of conduct as unfair conspiracy:
unfairly determining, retaining or altering the royalty rate in collaboration with different organisations;
refusing to supply a licence to certain businesses with out justifiable cause in collaboration with competing establishments;
moving into an agreement primarily based on unfair transaction phrases on trading volumes, territory and different terms even as also proscribing the scope of licence rights with recognize to the applicable product or era;
unreasonably refusing to provide a licence to businesses which are non-participants within the patent pool or concluding a licence settlement with such enterprises on discriminatory situations;
unreasonably pooling invalid or non-vital (replacement) patents;
pass-licensing to exclude third-celebration competition; and
settling patent disputes for the purpose of delaying competition from entering the marketplace.
The Supreme Court has carried out the ‘rule of reason’ wellknown in reviewing the exercising IP rights. According to the KFTC’s Guidelines for Review of Resale Price Maintenance (Resale Price Guidelines), but, forcing the opposite celebration or parties to the subsequent levels of transactions to conform with the lowest rate is deemed unlawful.
Reverse charge patent settlements
How have the competition legal guidelines been carried out to reverse fee patent settlements for your jurisdiction?
In 2011, the KFTC determined that a patent settlement settlement among pharmaceutical companies violated the MRFTA. The settlement among the patent owner and a ordinary company supplied that the usual organisation shall now not promote the commonplace product or such similar products till nicely after the patent expired in exchange for the patent owner granting the universal business enterprise an specific distributorship for the unique drug as well as other merchandise that were outside the scope of the disputed patent. The patent owner additionally promised to pay the time-honored corporation sales incentives that a ways surpassed normal commercial enterprise practices.
The Supreme Court therefore held that the agreement constituted an unjustifiable workout of patent rights in violation of the MRFTA. The Supreme Court emphasised that any anticompetitive consequences of pharmaceutical patent settlements should be determined on a case-by means of-case basis, thinking about the totality of occasions, along with the facts leading as much as the agreement, applicable time intervals, commercial phrases, and real and anticipated criminal costs of the underlying litigation, amongst others.
(Resale) price renovation
Can the exercise, licensing or transfer of IP rights create liability below (resale) fee renovation statutes or case regulation?
The IP Guidelines provide that restricting the sale fee or resale rate of a product beneath a licence agreement with out justifiable motive is a contravention of antitrust regulation. Thus, the rule of thumb of reason popular applies. The IP Guidelines also state that the restriction on resale fee upkeep additionally applies to IP rights. As referred to in query 23, the Resale Price Guidelines recall any act that forces a transactional birthday party or other events to the downstream transactional stages to comply with the bottom rate as unlawful. However, an exception can follow in which there may be a valid reason for maintaining the lowest rate, along with selling intra-emblem opposition and thereby increasing patron welfare. Setting the best fee is illegal if the best fee features as a cartel fee or if it has big anticompetitive consequences. If the exercising, licensing or switch of IP rights forces a celebration to keep the lowest rate or the highest rate, the above guidelines can also observe to such workout of IP rights.
Exclusive dealing, tying and leveraging
Can the exercise, licensing or transfer of IP rights create liability below statutes or case regulation relating to one-of-a-kind dealing, tying and leveraging?
Under the IP Guidelines, if a licensor unfairly coerces the purchase of a product or era that isn’t required for the production or use of the certified product, such act is seemed as an act this is above and beyond the scope of an IP right. In 2016, the KFTC determined that Qualcomm’s requiring a cell telephone manufacturer to buy modem chips as a circumstance to getting into a patent licensing settlement with Qualcomm constituted an abuse of its market dominance or an unfair change exercise and issued an order against Qualcomm, prohibiting such act.
Abuse of dominance
Can the workout, licensing or transfer of IP rights create legal responsibility under statutes or case regulation relating to monopolisation or abuse of dominance?
According to the IP Guidelines, if an entrepreneur in a dominant position refuses to furnish a licence to apply a wellknown crucial patent, demands discriminatory licence terms or impose definitely excessive royalties and so on, such acts may represent an abuse of dominance if such acts restriction competition. In addition, the KFTC’s Review Guidelines for the Abuse of Market Dominant Position discover the following conducts via an entrepreneur in a dominant function as an abuse of market dominance: (i) inflicting issue in every other entrepreneur’s business pastime by means of unjustly using IP-related infringement litigation, invalidity action or other judicial or administrative methods; and (ii) purchasing IP rights vital for every other entrepreneur’s persevered enterprise activities without a justifiable motive.
Refusal to deal and important centers
Can the exercising, licensing or transfer of IP rights create liability beneath statutes or case law regarding refusal to deal and refusal to furnish get right of entry to to important facilities?
The Enforcement Decree of the MRFTA expressly mentions as a kind of abuse of dominance unfair refusal to allow the use of or get right of entry to to an critical facility, or otherwise unfairly limiting such use or access. According to the KFTC’s Review Guidelines for the Abuse of Market Dominant Position, ‘critical facilities’ means tangible or intangible centers or infrastructure pleasant the subsequent necessities: (i) it’s miles not possible to participate in a certain change or an inferior market status is compelled to be maintained due to the fact it’s far not possible to manufacture, supply or promote services or products with out the use of such an element; (ii) a specific business exclusively owns or controls such an detail; and (iii) it’s far legally or economically impossible for a celebration looking to use or get right of entry to such an element to breed it or alternative it with something else.
The identical assessment standards follow with admire to IP-related conduct. The KFTC’s IP Guidelines specify unfair refusal to supply a licence to conventional essential patents for example of acts constituting an MRFTA violation.
Remedies for violations of competition law related to IP
What sanctions or remedies can the competition government or courts impose for violations of opposition regulation related to IP?
The KFTC can also impose an administrative nice inside the restriction prescribed by means of statute and problem an order prohibiting the anticompetitive hobby, depending on the sort of opposition law violation worried. In addition, the KFTC can also trouble corrective orders to address the resulting anticompetitive impact. If a celebration found to have violated restrictions associated with enterprise aggregate fails to comply with a corrective order, the KFTC may additionally impose consequences of up to zero.03 consistent with cent of the relevant transaction price for every day during which such failure continues.
Competition regulation remedies unique to IP
Do unique remedies exist below your competition legal guidelines which might be precise to IP topics?
Scrutiny of agreement agreements
How could a agreement settlement terminating an IP infringement dispute be scrutinised from a opposition perspective? What are the important thing factors informing such an evaluation?
As stated in question 24, the Supreme Court observed a settlement settlement terminating a patent dispute can represent an unfair collusion, and that any antitrust outcomes of pharmaceutical patent settlements should be determined on a case-by way of-case basis, thinking about the totality of occasions, along with the facts leading to the settlement, applicable time intervals, economic phrases and real and anticipated criminal expenses in the underlying litigation, amongst others. Considering the Supreme Court decision, the subsequent acts may also represent illegal collusion: agreements to delay marketplace access until the patent is expired, maintaining the patent proper in a way that exceeds the scope of the patent, retaining a patent with the aid of getting into an agreement with a 3rd birthday celebration to withdraw a patent invalidation action to discourage such 0.33 celebration’s marketplace access while knowing the patent is invalid etc.
Economics and alertness of competition regulation
What role has opposition economics played within the application of competition law in instances regarding IP rights?
Conduct related to IP rights may additionally represent a violation of competition regulation if such behavior has sizable anticompetitive results. Economic analyses with the aid of specialists are an increasing number of utilised as proof of a restrictive effect on competition and consumer welfare. The KFTC has additionally started to undertake an outcomes-based method in figuring out whether to take enforcement movements, and increasing its use of economic analyses. The KFTC established the Regulations at the Submission of Economic Analysis Evidence in 2013 and posted a guidebook entitled Understanding and Utilizing Economic Analysis in April 2017.
Recent cases and sanctions
Recent instances
Have there been any latest high-profile instances coping with the intersection of competition law and IP rights?
In 2009, the KFTC decided that Qualcomm violated the MRFTA for having engaged in: (i) a royalty discount programme discriminating against export-version cellular phones the usage of non-Qualcomm chips – where Qualcomm charged a five.Seventy five in keeping with cent royalty price for those users even as offering a reduction of up to 5.Zero per cent royalty rate for Qualcomm chip users; (ii) a royalty cap programme implementing a US$30 cap on non-Qualcomm chip customers at the same time as implementing a US$20 cap on Qualcomm chip customers; and (iii) a charge-netting programme discriminating towards home-version cell phones the usage of non-Qualcomm chips by way of offering for Qualcomm chip customers handiest a deduction of the chip cost from a telephone fee whilst accounting the royalty. The KFTC issued an order towards Qualcomm prohibiting such licensing practices.
In 2016, the KFTC once more determined Qualcomm chargeable for abuse of its dominance by enticing inside the following three conducts: refusing to license its fashionable critical patents (SEPs) to competitor chip providers or restricting those licences; refusing to sell its modem chips to handset groups that had been no longer certified to Qualcomm patents that cover the ones chips; and licensing collectively as a single patent portfolio its SEPs and non-SEPs with out fairly negotiating the licensing phrases and requiring unfastened go-licences to handset organization patents. The KFTC imposed on Qualcomm a high-quality of 1,030 billion Korean received for the violations and ordered three corrective measures: (i) conducting a licence negotiation to be able to bring about an exhaustive licence settlement if asked by using modem chipset producers for a licence to Qualcomm’s SEPs; (ii) selling modem chips to handset businesses even if they’re now not licensed to Qualcomm’s patents; and (iii) now not coercing comprehensive licence situations and loose move-licences etc.