Korean Court Makes Efforts to Create a More Patent-Friendly Environment.

Although Korea has been very active in the development of intellectual property, Korea has a reputation for being relatively unfriendly to foreigners utilizing the Korean patent system. Korean courts have been trying to rectify this situation by changing the environment for patent protection and patent litigation.  Specifically, they have implemented an improved discovery process and they have established international panels that will provide more foreigner-friendly patent litigation procedures.

Changed Discovery Procedures in Patent Infringement Suits

Under the Korean Code of Civil Procedure, discovery is generally not permitted.  Therefore, proving infringement or damages can be difficult where an accused product or process is not publicly available or where key evidence is exclusively in the possession of an alleged infringer.  In such cases, the Korean Civil Procedure Code allows a party to ask the court to order an adverse party to produce certain specifically-identified relevant materials.  However, under the pre-revised Patent Act, even when the court ordered an adverse party to produce such materials, the ordered party could typically avoid producing them by asserting that the requested items contain trade secret information.

Under revised Article 132 of the Patent Act, if certain evidence is deemed necessary to verify infringement or damages, the alleged infringer is no longer permitted to refuse production by asserting that the evidence requested is a trade secret. If the alleged infringer does not respond to the court’s order to submit such evidence without a justifiable reason, the requesting party’s arguments that could be proved based on the requested evidence may be deemed to have been proven.  The court will, however, attempt to prevent trade secrets from being disclosed to the extent possible by limiting the scope of the evidence to be disclosed and limiting who will have access to the evidence.

Additionally, the revised Patent Act expands the type of evidence that the court can order to be produced in a patent infringement action from “documents” to “any materials.”  Thus, it now captures digital materials and inventions themselves.

The revisions to the Patent Act are expected to ease a patentee’s burden of proving patent infringement and in assessing damages in patent infringement actions.

New International Panels Established for IP Cases in the Korean Courts

As the number of lawsuits involving foreign parties has been continuously increasing in Korean courts each year (i.e. over 40% of cases filed in 2016), there has been a recognized need to establish international panels to resolve international patent disputes.

On June 13, 2018, international panels were established in the Korean courts for intellectual property actions. Under the revised Court Organization Act, which was passed on November 24, 2017, the Seoul District Court, which tries initial patent infringement actions, and the Patent Court, which tries the second level of such cases including appeals of patent infringement actions and appeals of Intellectual Property Trial and Appeal Board (IPTAB) decisions, each will have an international panel to hear international disputes in English.

Before the revision, the Korean language was the only language used in Korean courts. However, the revision will now allow parties to submit briefs and evidence, as well as make oral arguments at hearings, in English upon consent of the parties. As the official language of the International Division is still Korean, simultaneous interpretation service is available through court-appointed interpreters. Judgments will be prepared in Korean, but official English translations thereof will also be provided. So far English is the only language allowed at the International Division, but the door will be open to expanding to Japanese, Chinese, and other languages after the courts gain experience with the procedure.

This new panels are expected to provide foreign entities with smooth and fair trial proceedings and reduced trial expense, including lower translation costs.  With this change the Korean government anticipates that there will be an increasing number of intellectual property disputes brought to Korean courts by foreign IP holders, and that Korean courts will become a popular venue for resolving international IP disputes.

The International Division of the Patent Court is now in the process of hearing its first case conducted in the English language. Under the new procedure, Blue Scope Steel Ltd., an Australian steel company, requested the Patent Court to permit hearings in English in its appeal of an IPTAB Decision (Patent Court Case No. 2017Heo3720). On July 20, 2018 the Patent Court approved the request. This case will be closely followed to evaluate the new system and make adjustments as needed.

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