The Korean Supreme Court in an unanimous en banc decision held
that Korean civil courts (that is, the District and High Courts) could
dismiss a patent injunction or damages claim for lack of inventive step
even before a patent is formally invalidated by the Intellectual
Property Tribunal of the Korean Intellectual Property Office (Supreme
Court decision 2010 Da 95390 on January 19 2012). While patent
enforcement in Korea is bifurcated into two forums where questions of
infringement are handled by the civil courts, and questions of novelty
and inventive step are handled by administrative tribunals, the Court's en banc
decision opens the door for civil courts to consider questions of
inventiveness when dismissing a patent infringement action, and thereby
opening the door for more fierce battles in civil court actions.
The bifurcated system
The Korean patent litigation system is a bifurcated system where
questions of infringement are handled by the civil courts and questions
of validity are handled by the administrative tribunals in the Korean
Intellectual Property office (KIPO). The Intellectual Property Tribunal
(IPT) within KIPO decides whether a patent is valid when there is a
formal challenge.
Under this dual track system for patent enforcement, the Korean Civil
Courts have encountered a rather natural question: whether to grant an
injunction or award damages for patent infringement when a patent is
likely to be invalidated? Like elsewhere in the world, a defendant is
likely to challenge the validity of a patent that is being asserted, and
invalidity is a commonly raised defence by defendants in Korean cases.
Under the bifurcated system in Korea, only the IPT is empowered to
decide the validity of a patent but not the civil courts. There is a
presumption that a patent remains valid in Korea unless or until there
is a final and conclusive invalidation of the patent through an
invalidation action, so a civil court is required to treat a patent as
valid.
Traditionally, when a defendant raises a patent invalidity defence
and the invalidation decision is still pending, then the civil courts
could only review the infringement issues or stay the infringement
action pending a decision from a patent invalidation action. The Courts,
however, recognise certain situations where it would be unfair to
enforce a patent or delay the infringement action for a period of time
when a patent is likely to be invalidated. In order to resolve this
conflict, the Supreme Court allowed the civil court to dismiss the
infringement action when the patent lacks "novelty" (Supreme Court
decision 86 Do 51147 on December 9 1986). Since this decision, there
have been many discussions and disputes about whether the civil courts
should be empowered to also review the inventiveness issue, or whether
this issue remains solely under the realm of KIPO. Some scholars and
jurists opined that novelty is a matter of fact while inventiveness
involves complex legal questions and considerations that should be
examined by the administrative tribunal at KIPO. There were some Supreme
Court decisions that denied the civil court's review of the
inventiveness issues. Contrary views also developed arguing that it is
not clear how to distinguish between novelty and inventiveness issues.
Inventiveness issues
After many years of controversy on the issue, the Supreme Court rendered a unanimous en banc
decision (that is, all eleven Supreme Court Justices reviewed and
decided this case) in January 2012 that the Korean Civil Courts can
review inventiveness issues and dismiss an injunction or damages action
on the grounds that the patent lacks inventive step.
The subject case was a patent infringement action between two Korean
companies involving an invention related to a drum washing machine. A
patent invalidation action and confirmation of scope action (an IPT
action to confirm whether a product or method falls within the scope of
the patent claim) were also pending between the parties. The High Court
reviewed the inventiveness issue and dismissed the patentee's petition
to bar infringement during the appellate trial. The Supreme Court merely
affirmed such power, but reached a substantively different conclusion
and found that the patent did not lack inventiveness. The case was
remanded back to the High Court.
While the specific case details may not be directly relevant to the
Supreme Court's new holdings as the High Court already conducted the
inventiveness review, the Supreme Court put forth various rationales to
arrive at its new holding. The Supreme Court especially emphasised the
purpose of the patent system and Patent Act (to contribute to the
development of industry by protecting the public welfare and the
inventor's interests). The Supreme Court reasoned that, if a patent
lacks inventiveness, the patent does not make any contribution to the
development of industry and should be part of the public domain where
anyone is free to use it. Accordingly, if an exclusive right is granted
to an invention which lacks inventiveness, and thus should have been
part of the public domain, and is erroneously granted a patent without
any special restriction, the public interest would be harmed and such a
grant would be contrary to the purpose of the patent system. In
addition, since a patent is a form of intellectual property right, it
should be exercised according to its substantive value in the spirit of
justice and fairness. Allowing a patentee of a patented invention which
lacks inventiveness to obtain an injunction or damages award against a
person practicing the invention would give the patentee unfair advantage
and do harm to the person practicing the invention, and would therefore
be an injustice to the parties.
How civil courts will change
As many patent practitioners know, challenging the validity of an
asserted patent is a very common defence strategy. Furthermore,
invalidity challenges are more frequently based on a claim of lack of
inventiveness rather than lack of novelty.
Defendants in past patent infringement actions encountered certain
barriers when raising inventiveness invalidity defences. While the lack
of inventiveness defence was raised in many cases in the past, most
court panels were reluctant to hear the arguments and make a
determination on these defences without official guidance from the IPT.
The Supreme Court's recent en banc decision now changes the
landscape and allows civil courts to hear issues relating to
infringement, novelty and inventiveness much like civil courts in the
United States. Korean courts will still maintain the validity of a
patent until a final administrative patent invalidation action decision
even when the civil court finds the patent invalid. However, as a
practical matter, one might expect significant difficulties in bringing
another or related infringement action once the previous infringement
action is dismissed due to the lack of novelty or inventiveness.
Before the new Supreme Court holding, when patent validity was
challenged based on lack of inventiveness and this was the only disputed
issue in an enforcement action, then a great deal of focus was given to
the invalidation action. For some cases, the infringement action simply
remained pending without substantive developments for a significant
period while parties expended great resources and efforts in the
invalidation action. The new Supreme Court decision will help to change
the balance between the civil court and invalidation actions. Since the
civil courts reviewing the infringement action can now review the
inventiveness issue, it is expected that disputes regarding patent
validity issues will likely be more vigorously argued during
infringement actions. Civil courts may even begin to render decisions
without waiting for the first instance decision from the patent
invalidation action.
Also note, civil courts may be more inclined to grant an injunction
or damages award by finding inventiveness without awaiting a final
decision in the invalidation action (as the conclusion by the Supreme
Court for the subject case).
A patentee who plans to file a patent infringement action will need
to be well prepared on all patent invalidity defences prior to
initiating an action, and should review all prior art before filing an
infringement action in order to formulate the most effective enforcement
strategy.
| Ji Eun Kim |
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Ji Eun Kim is a patent attorney in the chemical practice group of Kim
& Chang. She has extensive experience in handling diverse IP issues
with particular emphasis on pharmaceuticals, chemistry and
biotechnology. A substantial part of her practice involves handling IP
issues in relation to pharmaceutics, pharmacology, medicinal chemistry,
polymers, generic engineering, DNA technology, vaccines, plants and
other related technologies.
Ji Eun's practice involves prosecution of patent applications,
various ex-parte and inter-partes patent actions and litigation before
the Korean Intellectual Property Office and the Korean Courts in the
areas of pharmaceutical and chemical technologies. She has been involved
in many complex patent infringement disputes, and has played
significant roles in the disputes with her keen understanding of the
interplay between patent law, pharmaceutical regulatory law and
competition law.
She has also provided patentability, infringement and validity
opinions and has performed due diligence evaluations in connection with
patent licensing, product marketing and investments.
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| Gregory B Kang |
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Gregory B Kang is a US-licensed attorney in Kim & Chang's
electrical department of the IP group and is also registered to practise
in front of the USPTO. Gregory's practice focuses on the protection of
his client's IP rights and effectively utilising their IP to achieve
their goals.
Gregory joined Kim & Chang in 2009 from Samsung Electronics where
he served as in-house counsel for the LCD division. Before coming to
Korea, Gregory was the partner in charge of managing the electrical and
mechanical practice group of an IP boutique law firm located in the
Washington, DC area of the United States.
In Gregory's more than 10 years of experience as an attorney in the
US, he worked on International Trade Commission (ITC) patent
infringement actions, assisted on multiple other IP-related litigations,
was responsible for overseeing IP issues for mergers and acquisitions,
and wrote and negotiated IP issues for multiple types of contracts.
In patent prosecution, Gregory was an examiner at the USPTO. In
private practice, he prepared and prosecuted patent applications in the
electrical and mechanical arts.
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