Korea, China, and Japan Prepare for a Patent Community

On December 1. 2005, at the fifth “Korea China Japan IPO Commissioner Meeting,” held at the International Intellectual Property Education Center in DaeJeon Metropolitan City, Korean Intellectual Property Office (KIPO) Commissioner Kim Jong-Kap, Chinese Commissioner Tian Lipu, and Japanese Commissioner Makoto Nakajima discussed the possibility of unifying the patent systems of the three nations and establishing a patent community through a joint effort.

At the meeting, Commissioners of the three nations agreed that a speedy grant of patent rights and the increase in value-added creations are very important in accelerating the trade and investments among the three Northeast Asian nations. In 2004, the aggregate number of the three nations’ patent applications accounted for 43% (650,000 cases in 2004) of the total worldwide patent applications (1.5 million cases in 2004). To this end, the three nations have agreed to continue to discuss implementation measures for the establishment of a patent community.

As one of the foremost agendum topics, the promotion of a new take-off of patent cooperation, the three nations agreed to review the possibility of expanding the ‘Korea-Japan Patent Examination Highway’ (preferential examination system between the two nations) to the three nations.

At the same time, the Commissioners agreed that they will jointly seek to harmonize the different patent laws and examination procedures, and to develop and link the three nations’ patent information systems in order to expedite the exchange of examination documentation and sharing of patent information.

Already, between Korea and Japan, more than 20,000 cases of international patent application documents are being exchanged on-line each year, and the remaining technical review is almost complete, to further implement this on-line exchange among the three nations. Furthermore, a joint project, on prior art and comparative analysis to provide a foundation for a reciprocal usage of the patent examination result, among three nations is being carried out

At present, the three nations’ trade volume lists as the fifth largest in the world and the number of patent applications account for half of the world patent applications that are filed. Accordingly, this meeting was significant in light of the fact that it has provided a foundation for a new discourse on patent cooperation among the three nations whose leadership in Northeast Asia is be based on their strong capacity in intellectual property.

Korea-Japan Patent Examination Highway

On November 30, 2005, at the “17th Korea Japan IPO Commissioner Meeting” with Japanese IPO Commissioner Makoto Nakajima at the KIPO Multimedia Center in the Daejeon Government Complex, Commissioner Kim Jong-Kap signed a MOU to establish a “Korea-Japan Patent Examination Highway,” which aims to accomplish speedy and accurate patent examinations, and also, which would provide a preparatory stage toward unifying both nations’ patent systems.

“Patent Examination Highway” is a system devised to facilitate the patent examination process. In other words, once a patent application has been filed in both Korea and Japan, and one of the nations have granted the patent right, the other nation is to examine the application preferentially by means of simple procedures.

At present, both nations are in the process of establishing a reciprocal acknowledgement system for the examination result. Therefore, if both systems mentioned above are combined, the complex procedures of patent examination will be simplified and at the same time, will facilitate the obtainment of patent rights in either nation.

The MOU includes the establishing of a system which allows for the electronic viewing of the examination-related documents for the mutual utilization of the examination results between the two nations.

Accordingly, the Korea-Japan Patent Examination Highway will increase its convenient and beneficial services to the applicants through simplified and rapid processing, and also accurate examination, through the establishment of mutual utilization of examination results between the two nations, should be anticipated.

Further, both Commissioners agreed to accelerate patent cooperation between the two nations in terms of reinforcing the cooperation through mutual utilization of examination results and jointly seeking unification of the patent systems in Korea, Japan, and China.

The MOU for the “Korea-Japan patent examination highway” of the two nations will accelerate the unification of the patent law between the two nations and additionally, reinforce the cooperation between three nations of Korea, Japan, and China. It will be a step towards the total unification of patent law among three nations.

U.S. designates the KIPO as its International Preliminary Examining Authority (IPEA) and International Search Authority (ISA).

As of January 1, 2006, Korea will be able to export its patent application examination service, which has already acquired an international reputation for quality service, to the U.S.A.

On December 22, 2005, the KIPO Commissioner Kim Jong-Kap finalized an agreement with Director of the USPTO Jon Dudas to designate the KIPO as the USPTO’s International Search Authority (ISA) on prior art and as its International Preliminary Examining Authority (IPEA). This agreement goes into effect as of January 1, 2006, and the KIPO will provide the USPTO with international search and international preliminary examination service on international patent applications filed with the USPTO under the Patent Cooperation Treaty (PCT).

According to the Patent Cooperation Treaty (PCT), when a corporation or an inventor files an international patent application, the application should be examined on prior art and the patentability at International Searching Authorities and International Preliminary Examining Authorities of twelve (12) national offices in developed countries, and the individual national offices shall appoint an international searching authority for its residents or nationals.

The USPTO receives the highest number of PCT international applications (43,400 cases in 2004) worldwide and until now, it had designated the EPO as the only International Searching Authority and International Preliminary Examining Authority. The addition of the KIPO as its Search and Examining Authority reflects the USPTO’s recognition of the KIPO’s quality service.

The U.S. designation of Korea as its Search and Examining Authority reflects the international validation that the KIPO offers top-quality examination, and also, the fact that Korean patent documentation has been included in the minimum documentation of the PCT International Examination Authority as of October 2005, together with USPTO’s designation can be seen to raise Korea’s status in the field of world intellectual property.

As of 2004, Korea was ranked fourth in the number of industrial property applications filed, seventh in PCT applications and fourth in applications filed with the USPTO.

According to the announcement by the Swiss IMD in May 2005, Korea’s national competitiveness ranked the second in terms of patent productivity (the number of patent registration per 1000 research and development personnel) and ranked fourth in terms of domestic patent grants. Korea is continuing to maintain its advanced status in the intellectual property field.

Until 2004, Korea had performed as an International Searching Authority and International Preliminary Examining Authority only in regional Asian countries, such as the Philippines, Vietnam, Mongolia, and Indonesia. Further in 2005, Korea had agreed to provide said service for New Zealand and Singapore.

Taking the opportunity of the USPTO designation of Korea as a stepping stone, the KIPO will move forward with its plan to further expand its international designations by other major countries including Japan, China, Australia and Russia and to aspire to increase its influence in the global field of intellectual property even further.

Introduction of the Intensive Examination System into Patent Trial Proceedings.

The KIPO announced detailed enforcement procedures for an intensive examination system that will be introduced into patent trial proceedings as of 2006.

The intensive examination is a system devised to facilitate a prompt ruling of a trial by requiring both arguments and evidence to be submitted timely by each party without additional extensions, and thus examining them intensively in a reduced time period. This system will become effective as of January 2006 and it will be applied to trials to confirm the scope of patent rights and to expedite trials.

According to the detailed enforcement procedures for the intensive examination announced by the KIPO, once a patent trial is requested, an evaluation on formality, as to whether all required information has been described in the written request, will be conducted within fifteen (15) days. Also, within a month, the KIPO will notify the parties of a decision on whether the expedited trial will be held, thereby facilitating a written reply to be submitted promptly.

In order to enforce the two-month deadline for the submission of a reply, an extension of the due date for the reply generally will not be allowed more than once, except in unavoidable circumstances.

The KIPO issues orders of requests for supplements in situations where a request has not been made by an interested party and where the subject invention has been incorrectly specified in the written request.

By the third month after a reply has been submitted, it is examined as to whether additional trial proceedings should be carried on, and, if necessary, an oral hearing should be held requiring both parties to be present at the tribunal, thereby promptly resolving the issues. In the fourth month, the ruling on the patent trial will be rendered.

By virtue of the introduction of the intensive examination system, any attempt by a party in a disadvantageous position to willfully delay the process will be prevented and the patent trials will be brought to conclusion within six months on average. Also, the credibility of the ruling will be heightened by the reinforcement of the ex officio examination.

The KIPO will expand the applicability of the intensive examination system to additional procedures based on its observation of the implementation in 2006.

Along with the introduction of the above intensive examination, a plan is in the progress of implementation seeking to heighten the validity of the trial to confirm the scope of patent rights in an infringement dispute.

Until now, in an infringement case, when the Korean Industrial Property Tribunal (KIPT) rendered a ruling through a trial to confirm the scope of patent rights, the courts or the prosecution could not uphold the KIPT ruling and then apply it to their cases because it was difficult for the court or the prosecution to readily discern whether the subject invention in the suit was identical to that being conducted in the KIPT. Therefore, the validity of the KIPT trial to confirm the scope of patent rights was questionable.

To resolve this issue, as of 2006, the KIPO requires that when requesting a trial to confirm the scope of a patent right, the requesting party must describe, on the request for a trial form, whether an alleged product/method to be compared with the patented invention is actually identical to that pending in the suit. Based on KIPT’s positive scrutiny of all such assertions, KIPT rulings can be readily applied in courts or for the prosecution.

If a trial is promptly concluded by the introduction of the intensive examination into a patent trial proceedings, and if the validity of the trials to confirm the scope of patent rights is increased through KIPT’s scrutiny as to whether the alleged product/method in a pending suit and the patented invention is identical, it is expected that a customer’s satisfaction of the patent trial will be raised remarkably.

Continuous Increase of PDP-related Patent Application Filings.

In 2005, the competition between Japanese companies and Samsung Electronics and LG Electronics was at its peak as they lodged Plasma Display Panel (PDP) related patent lawsuits against each other; during the midst of such a competition, patent applications filed for PDP-related technologies (excepting the driver circuit field) has continued to increase since 2004 and steadily into 2005.

The PDP TV, which is fabricated by connecting a driver circuit to a PDP, is a display device that achieves light-emission using the generation of plasma through electricity discharge. It is one of the representative digital flat panel display devices, along with the LCD TV.

The KIPO announced that the number of patent applications filed in Korea for the PDP-related technology was 423 cases in 2002, 687 in 2003, 1,386 in 2004, and 1,132 through the end of October 2005. This growth represented an increase of 22.4% compared to the same period in 2004.

The “big three” PDP manufacturers in Korea and Japan, which are Samsung SDI of Korea, LG Electronics of Korea, and Matsushita of Japan, filed 90.3% of the total PDP-related patent applications with the KIPO. The Korean filings accounted for 95.4% of the total applications and Japanese filings made by, Matsushita, Pioneer, Fujitsu and others, accounted for 4.3% of the total applications. As for the top filing companies, Samsung SDI represented 47.3% of the total applications with LG Electronics as the runner-up with 41.2% of total applications.

An official at the KIPO stated, "such an increase in PDP-related patent application filings is a result of Korean companies’ consistent investment in research and development to prepare for the future patent disputes because they have realized that, in such disputes, it is important not only in quality but also in quantity of a patent," and added, "the KIPO is preparing for the increase in patent applications by augmenting the number of patent examiners in charge of the PDP-related technologies from 1 to 3.”

The Opposition System is Effective in Deterring Registrations of Designs that Copy Well-known Designs.

According to the analysis of data on oppositions against design registrations between 1998 and the last quarter of 2004 by the KIPO, the opposition system has proven to be very effective for invalidating design registrations that had copied well-known designs.

The number of opposition filing has been, each year, five (5) cases in 1998, 45 in 1999, 31 in 2000, 31 in 2001, 105 in 2002, 48 in 2003, and 41 in 2004; the big increase in opposition filing of 2002 was analyzed as a result of the increase in the general interest for well-known design marks influenced by the exposure to foreign brands through the 2002 World Cup in Korea.

According to the analysis of the results of the above opposition cases, 226 design registrations, which accounted for 74% of the total 306 opposition cases, were cancelled and 80 design registrations, which accounted for 26% of the total opposition cases, remained valid.

Based on the high cancellation rate of 74% in design registrations above, it is believed that the opposition system disarms those, who attempt to get a free ride on the goodwill of well-known designs and seek unjust profits, by sending out a message that even if the copied designs are registered, their registrations can be easily cancelled by way of oppositions.

The underlying basis for the cancellations by said oppositions in 150 cases, which accounted for 66% of the total 226 cancelled cases, were copying well-known foreign designs and 76 cases were for copying domestic designs.

The cancelled copied designs had imitated designs of famous brands, such as Louis Vuitton, Gucci, and Salvatore Ferragamo. Specifically, the top five brands that were most copied were Louis Vuitton (66 cases), Gucci (14 cases), Celine (13 cases), Salvatore Ferragamo (11 cases), and Chanel (8 cases). Designs of other well-known brand names, such as Fendi, Coach, Burberry, MCM, and Aigner were also imitated although not as frequently.

Designs of the French brand names, Louis Vuitton, Celine, and Chanel accounted for the majority of the copied designs in 91 cases out of the total cancellations. Designs of the Italian brand names, Gucci, Salvatore Ferragamo, and Fendi, accounted for the second most copied designs of 33 cases and designs of the U.S. brand names, such as Coach and Disney, rank third with 14 cases.

Based on the data regarding the 226 cases of cancelled designs, 70% were for textile designs, or 157 cases, packaging related product designs accounted for 39 cases, clothing designs for 12 cases, bedding designs for 10 cases, and stationery designs for 8 cases.

According to an official at the KIPO, it is recommended that product designs that have short life cycles and are fashion-sensitive will be effectively protected by way of the non-examination design application system, periodic market investigation, and monitoring the KIPO publication of design registrations. If design registrations have been infringed upon or are in danger of infringement, proactively submitting informational briefs with the KIPO and utilizing the opposition system is strongly recommended.

Disclaimer: This newsletter is meant to inform our clients of IP developments in Korea. While every care has been taken to ensure the accuracy of this newsletter, it should not be relied upon before individual advice is obtained.