Patent Court Orders a "Jo-Jeong" Rather than Rendering a Decision

The Korean Patent Court recently ordered a "jo-jeong" which is a mediation-like arrangement where a judge proposes settlement between two parties, in a cancellation case (2000 Hur 3392, May 31, 2002) against an invalidation decision of a patent registration of the Intellectual Property Tribunal, a first for the Patent Court since its foundation in 1998.

Submission of cases to arbitration and/or mediation are common in civil cases where it has been recognized that arbitration and/or mediation is more economical and reasonable although administrative trials involving patents, utility models, designs and trademarks are impossible in reality to be resolved by way of arbitration and/or mediation. However, civil-oriented patent cases are more realistic to be solved by means of arbitration and/or mediation such that the Patent Court has come to select cases to be settled by way of this so-called "jo-jeong" method.

The present cancellation case was initiated by a Plaintiff Mr. Yang, who is a representative of a water purifying manufacturing company. The Defendant Mr. Koo co-developed with Mr. Yang a pressurized water supplying device for dental treatment on which a patent was taken out. Mr. Koo later retired from the company to independently manufacture and market the device, which has become the issue in contention.

Mr. Yang petitioned for a preliminary injunction on account of the patent infringement. Mr. Koo in return requested an invalidation trial of the patent registration with the Intellectual Property Tribunal. The Intellectual Property Tribunal held that the patent registration was invalid because it determined that the invention should have been co-applied in the first place and Mr. Yang took out a patent without proper compensation given to Mr. Koo.

The Judges of the Patent Court, heard the arguments from both parties, allowing both parties to speak out to their hearts' contents for more than forty minutes. The Court then ordered a "jo-jeong" to the effect that both parties shall not file any civil, criminal and/or patent suits in the future, Plaintiff shall pay per month a sum of five million Korean Won to Defendant, and Defendant shall fully cooperate with Plaintiff in obtaining foreign patents. Both parties agreed to the Judges' proposal.

This case sets a new precedent paving the road for future patent cases to be settled by the so-called "jo-jeong" mediation-like method.

A Revised Patent Act to be Implemented Later this Year Regarding the Improvement of the PCT

(1) Reflection on Amended Articles of the PCT

Reflecting on the recently-amended articles of the Patent Cooperation Treaty (PCT), the Korean Intellectual Property Office (KIPO) is to amend and unify the national entry time limit to 30 months regardless of the international preliminary examination request as a measure to provide convenience to applicants.

(2) Others

Registration fees previously paid will be refunded to applicants if a utility model application fails to pass the fundamental requirement test.

In order to clarify the articles regarding cancellations of PCT application and invalidation trials, patents will only be granted to applications having the same technical contents of the PCT application as those of the translation submitted in the course of national entry.

Further, an opportunity to amend will be given to an applicant even where the registration fee is not paid in full.

The KIPO is to implement the above-mentioned amendments in the latter half of this year.

On-line Patent Management by KIPO

The Korean Intellectual Property Office (KIPO) has announced that it will introduce an electronic management system for patent applications, trial requests and other clerical works in early July 2002. All patent-related documents covering applications, examinations, opposition filings, registrations and trials can be submitted electronically.

As a result, all patent-related documents can be submitted via the Internet and all notices from the KIPO can be received on-line. With the establishment of the electronic system, all documents are to be digitally circulated within the KIPO for utilization in electronic examination, authorization and all other processes involving clerical works.

In retrospect, in January 1999, the KIPO opened an on-line application system running the whole gamut of industrial property rights, the first to implement such an electronic application system in the world. In March 2000, an on-line fee payment system was opened. In March 2001, a patent information mobile service system and a customer support center was introduced, and an on-line trial system was established.

The Korean Trade Commission Sets Up Trial Guidelines for Parallel Imports for the First Time in the Republic of Korea

In its 175th session held on June 27, 2002, the Korean Trade Commission (KTC) handed down a decision barring any imports of the popular "Starcraft" and "Diablo" by B&T Co., Ltd. and Newington Interactive, Inc., and devised a list of trial guidelines for parallel imports for the first time in Korea.

The classic case of "parallel imports" is where someone other than the designated exclusive Korean importer purchases genuine trademarked goods that are manufactured outside the country and imports them for sale in Korea in competition with the exclusive Korean importer. Parallel imports, also known as gray market goods, are not the same as pirated or counterfeit goods.

Hanbit Soft Inc., a Korean digital entertainment company, called upon the KTC on February 19, 2002 to take action against unfair trade acts committed by B&T Co., Ltd. and Newington Interactive, Inc., which had allegedly infringed upon the exclusive license of Hanbit Soft Inc. Hanbit Soft Inc. is the exclusive Korean licensee to the U.S. trademark owner, DAI, with respect to "Starcraft" and "Diablo," titles of computer software games which are popular among Korean youngsters. DAI manages the intellectual property of Blizzard Entertainment, the maker of "Starcraft" and "Diablo".

Not until now has there existed any substantial guidelines or any established precedents from the Korean Courts regarding parallel imports. The KTC set a new precedent by articulating a five-part test: (1) whether a valid Korean trademark (including a valid Korean exclusive license, if any) has been registered; (2) whether the foreign trademark holder and local trademark holder is the same business entity; (3) whether the trademark holder or exclusive licensee is manufacturing or marketing the goods; (4) whether the quality between the local products and the imported products are identical and meet the same standards; and (5) whether the trademark holder or exclusive licensee has established itself as having accrued goodwill on its own.

Applying the five-part test, the KTC determined as follows:

(1) Hanbit Soft Inc. registered the license to exclusively use the Starcraft and Diablo trademarks for computer game softwares on January 22, 2002 with the Korean Intellectual Property Office for the duration up to the end of 2002.

(2) Hanbit Soft Inc. is neither the same entity nor a subsidiary of Blizzard Entertainment.

(3) Hanbit Soft Inc. utilizes master CDs provided from Blizzard Entertainment to manufacture and market the Starcraft and Diablo computer game softwares for domestic consumption at LG-LCD Chung-ju factory via an OEM method.

(4) The quality of the parallel imports are inferior to that of Hanbits licensed products.

(5) To establish goodwill and recognition of its computer game softwares, Hanbit Soft Inc. invested a lot of money since April 1998 in areas such as establishing and managing exclusive web sites, extending exclusive servers and managing a customer support center.

 

Accordingly, the KTC concluded that an injunction against the parallel importation by B&T Co., Ltd. and Newington Interactive, Inc. was justified.

"ALFREDO VERSACE" Found Confusingly Similar to "GIANNI VERSACE" by the Supreme Court of Korea

Gianni Versace S.p.A, the trademark owner of "GIANNI VERSACE," brought a trademark infringement suit against a Korean firm, Sewook-Tongsang, Co., Ltd., contending that the latter's use of "ALFREDO VERSACE" without the former's authorization is likely to cause confusion among the general consumers of Korea.

The Supreme Court of Korea held that "ALFREDO VERSACE" and "GIANNI VERSACE" are likely to cause confusion because although "ALFREDO" AND "GIANNI" are different, the identical component "VERSACE" alone is sufficient to amount to trademark infringement.

The Court rejected Sewook-Tongsang's counterclaim, who argued that the general consumers of Korea would not be confused as to the source of origin because the relevant goods differ in terms of marketing channel, management system, and price.

Article 51(1) of the Korean Trademark Act provides that trademark infringement shall not extend to a person's own name. However, this shall not apply where, after registration of the trademark, such mark has been used with the intention of violating the rules of unfair competition.

Sewook-Tongsang contended that the above Article should apply to the mark "ALFREDO VERSACE". However, the Court rejected Sewook-Tongsang's arguments, stating that the "ALFREDO VERSACE" is not the name of a designer of Sewook-Tongsang but is the name of an American designer.