On July 20, 2011, the Intellectual Property Framework Act (IPFA) became effective in Korea, focusing government support for the creation, protection, utilization, and infrastructure of intellectual property (IP) in relation to technology and industry development. This is currently one of the top economic policy agendas of the Korean government.
It was my good fortune to have been deeply involved in the enactment and implementation of the IPFA. Since July 2011 I have worked as a member of the Presidential Intellectual Property Council (PIPC), the highest-level government organization that discusses IP issues and policies, and as Chairman of the IP Protection Committee under the PIPC.
It is from this perspective and knowledge base that I would like to introduce the core of the Korean IP Framework Act, starting by briefly setting the stage.
Painful Experience in Intellectual Property
Korea’s story is one of rapid economic development. Currently Korea is 7th in the world in terms of overseas trade volume, and is a member of the OECD. In 2012, Korea exported US$547.9 billion (including exports from semiconductors, cellular phones, and automobiles), imported US$519.6 billion, and the personal GNP was USD$23,000. In 1964, Korea exported US$100 million and personal GNP was just US$100. Much has changed in a relatively short period of time.
The turning point in opinion about IP in Korea came in 1986 in the form of a case involving Texas Instruments and Samsung. Texas Instruments ended up being awarded compensation of US$85 million. This came as a shock to Korean manufacturers and drew attention to the importance of IP. Shortly after, the Korean government led a nationwide campaign emphasizing IP across the entire spectrum of industry, art, and culture.
Many business owners in Korea now believe IP is quite important, because they see it can be used as an asset and a strategic tool.
Inefficient Policy Administration by Korean Government
The responsibility for IP policy is divided between various Ministries and Agencies.
The Korea Intellectual Property Office is responsible for inventions, utility models, designs, trademarks. The Ministry of Health and Welfare is responsible for medicine, drugs, and pharmaceuticals. The National Science and Technology Council oversees all IP related to science and technology. The Korean Communications Commission is responsible for computer programs. The Ministry of Trade, Industry and Energy is responsible for semiconductor chips. And the Ministry of Agriculture, Food and Rural Affairs is responsible for new varieties of plants, and the geographical origins of agricultural products.
Each Ministry or Agency follows its own IP policy and strategy. Not surprisingly, there are sometimes conflicts between the policies and strategies of these bodies. Particularly, when there is a conflict, it is very difficult for a company to know which policy has priority in an enforcement situation.
History of IP Framework Act
On August 30, 2005, about 400 people, including many nationwide leaders in various areas, had the inaugural meeting of the Intellectual Property Forum (IPF) with the goal of increasing the awareness of the importance of IP, and improving the IP system of the time in several areas.
The following organizations and associations were represented: the Korean Federation of Science and Technology Societies, Federation of Korean Industries, Korean International Trade Association, Ministry of Culture and Tourism, Federation of Artistic & Cultural Organizations, and the Korea Chamber of Commerce & Industry.
All of the members shared the views that IP is a national competitiveness issue. They also agreed that a key aspect of IP lies in the combination and harmonization of culture, art, science, and technology, and an important way for Korea to grow is through IP.
I participated in this forum as a founding member of the Intellectual Property Forum.
Under this belief, the IPF started by hosting seminars, symposiums, and meetings in order to rally public support for the IPFA. In due course, a bill for the IPFA was presented to the Korean National Assembly as a Parliamentary Bill. It was necessary to present the Bill twice, once on July 7, 2006 and again on Nov. 4, 2009. The second time around, the Bill received the signatures of 102 out of 298 Congressmen, which was the most support a bill has received in the history of the Korean National Assembly.
On Dec. 1, 2009, the IPF appealed the necessity of the IPFA to the Office of the President. The President ordered the preparation of an IPFA bill after having a joint meeting of 13 Administrative Ministries and Agencies. On April 16, 2010, the Prime Minister opened the governmental bill, and thereafter the President presented it to the National Assembly.
On April 29, 2011, the National Assembly discussed and reconciled the two bills, and finally passed the resulting combined bill.
Main Structure of the IPFA
The bill set up the PIPC, which reports directly to the president, and to which the IP Strategy Planning Office reports to. The PIPC includes the Prime Minister and a representative of the private sector in IP as co-chairs. The members are the 13 ministers concerned and a selection of IP experts in Korea.
The purpose of the PIPC is to establish mid and long term policy goals and directions for facilitating the creation, protection, utilization and enhancing the base of IP. It also should adjust the IP policies of each administrative Ministry and Agency. It is to screen the bills to be enacted or to amend related IP laws and regulations. Also, it must establish a system for the evaluation of IP, and approve the budget for governmental R&D in connection with IP policies of Ministries and Agencies. And, finally, it must approve the appointment of IP policy officers of central and Local government.
Implementation of the IPFA
On Nov. 22, 2011, the Korean Government set up a basic IP development plan for 2012 to 2016. Also, the National Assembly approved a governmental R&D budget for 2013 of US$14.4 million. With these funds the IPFA began to carry out its mission.
One main purpose of the IPFA is to focus government effort on simplifying litigation procedures such that IP disputes can be resolved more quickly and fairly, considering the needs of IP owners.
There is presently a two-track system for IP litigation in Korea, one for patent invalidation cases and one for patent infringement cases. Patent invalidation cases are first brought before the Intellectual Property Tribunal organized under the Korean Intellectual Property Office, and then before the Patent Court, which is the High Court level, and finally before the Supreme Court. On the other hand, patent infringement cases are brought before the District Court, then the High Court, and finally the Supreme Court. The judges on one side monitor the decisions and judgments of the judges on the other side. This makes the process time-consuming, to say the least. For example, it took 11 years and 8 months for a diaper patent case to reach a signed compromised agreement in 2006. The rights of the IP owner are obviously not being well protected when they must wait almost twelve years for satisfaction.
On Nov. 13, 2013, the PIPC made a recommendation to change jurisdiction for patent infringement cases. Specifically, they recommended that a patent infringement case be handled first by the Seoul Central District Court or Daejeon District Court, then by the Patent Court, and finally by the Supreme Court. And, that at the District Court level, the parties have the option of bringing an unfair competition case, business secret case, or copyright or computer program case before the Seoul Central District Court or Daejeon District Court other than the usual District Court.
The major merits of this change would be that IP owners could then have access to more capable judges with a wider and deeper knowledge of IP, and that the process would be more streamlined since at the high court level both patent and invalidation cases would be handled by the same high level court – the Patent Court. The Ministry of Justice and the Korean Intellectual Property Office will discuss this issue in due course.
Also, Korea agreed through the Free Trade Agreement with the U.S. that the legal power of judges shall be strengthened, especially for a patentee, because Korea does not currently use the discovery system.
In the future, the IPFA plans to deal with a variety of issues. On the agenda is cooperation between IP related organizations, a counter-plan against the unwarranted attempts to invalidate patents, reasonable compensation for damages, delay of litigation and abuse of patent rights, fair protection of patents for small and medium size companies, an IP evaluation system, financing based on IP, fair transactions of IP, and reasonable compensation for employee inventions.
To recap, the IPFA is the highest IP-related law in Korea and is referenced for all other IP-related laws, including the Patent Act, Utility Model Act, Design Act, Trademark Act, Copyright Act, Computer Program Protection Act, Unfair Competition Prevention & Trade Secret Protection Act, Seed Industry Act, Internet Address Resources Act, Agricultural and Marine Products Quality Control Act and Semi-Conductor Integrated Circuit Layout-Design Act.
It is expected that relatively soon the Court Organization Act will be changed with respect to which courts have jurisdiction in patent infringement cases, and that the Presidential IP Council will focus on the hot issues such as, compensation for damages, IP evaluations, financing based on IP, and compensation for employee inventions.
In closing, I would like to say that I feel privileged to have been able to participate as a member of the PIPC and as Chairman of the IP Protection Committee in the establishment of a nationwide legal and administrative system, which has made it possible for me to share certain knowledge with the IP community. With respect to IP, it is my hope that the information in this article at least gives the reader a sense of what is transpiring in Korea and the positive effects it will have for IP owners.
Kim Myung-shin is a member of the Presidential IP Council and a Managing Partner at Myung-shin & Partners, Seoul, South Korea. He can be reached at email@example.com.