The Seoul Central District Court recently issued a decision that a patent holder was not liable for damages from a preliminary injunction even if the patent which was the basis for the injunction was invalidated after the injunction was imposed (Case no 2007 KaHap 43028). This decision is at odds with the current Supreme Court precedent that has strictly acknowledged the patent holder's liability in such cases.
The Supreme Court has previously held that the patent holder was presumed to be negligent for enforcing an injunction if the injunction was based on a patent that was later invalidated. Thus, the patent holder was liable to pay damages to the alleged infringer. In the previous lower court cases, patent holders usually rebutted this presumption by arguing that preliminary injunctions were issued by the lower courts after full review of both parties' arguments regarding the validity of the patent in question. However, the Supreme Court has not accepted such arguments.
In the present case, the lower Court has presented a new policy for reversing the negligence presumption if a case meets a test based on the following two factors: whether the patent holder knew or could have easily known of the prior art reference that was the basis for the patent invalidation and whether there were reasonable grounds for the patent holder to believe that the subject patent was valid.
In applying the first factor to the present case, the Court stated that a key prior art reference was not submitted during the proceedings of the preliminary injunction and initial patent invalidation actions. It was only later when the preliminary injunction had already been enforced that the reference was then submitted in a subsequent invalidation action and became an issue in the case. Further, the prior art reference was in Spanish, which was not easily understood and the reference insufficiently described the subject patent invention. For the above reasons, the Court judged that the patent holder neither knew nor could have easily known the existence of the prior art reference. The Court also ruled that the present case satisfied the second factor and in support, cited Supreme Court and lower court decisions recognising the subject patent's validity before the reference was ever considered.
The present decision is noteworthy because it is the first decision denying the patent holder's liability since the Supreme Court's ruling on this issue in 2002 (Supreme Court case no 2000 Da 46184). Although this is a lower court decision, it is still favourable to patent holders, and provides an important precedent in arguing for non-liability in similar situations.
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| Jung Yeon Kim and Kevin Lee |
Kim & Chang
Hungkuk Life Insurance Building, 9F
226 Sinmunno 1-ga, Jongno-gu
Seoul 110-786
Korea
Tel: +822 2122 3900
Fax: +822 2122 3800
all@ip.kimchang.com
www.ip.kimchang.com
