WORKSHOP 1: IP INFRINGEMENT AND INTERNATIONAL FORUM SHOPPING

Transcription

1 43 rd World Intellectual Property Congress Seoul, Korea WORKSHOP 1: IP INFRINGEMENT AND INTERNATIONAL FORUM SHOPPING October 21, 2012 John Kim* Admitted to practice in Maryland, the District of Columbia, California and before the USPTO

2 Agenda Overview of the Korean Legal System Bifurcated Adjudication of Patent Disputes Patent Infringement Actions Remedies Patent Invalidation Proceedings Interplay Between Patent Invalidation and Infringement KTC Unfair Trade Practices Investigations IP Enforcement in China IP Enforcement in Japan 2 / 19

3 Samsung v. Apple Global Litigation Campaign US (N.D. CA) US (Delaware) US (ITC) The Netherlands UK Germany France Italy Korea Japan Australia Samsung Offensive Apple Offensive 3 / 19

4 Overview of the Korean Legal System In contrast to common law jurisdictions, Korea follows the principles of civil law, or continental law, through a codified system of comprehensive rules that are interpreted and applied by judges With no trial by jury in Korea, judges preside over local courts and render verdicts No U.S.-style full discovery process Because Korea adopted its civil law from the German Civil Code at a time when Germany was a rising power, there are many common traits in IP enforcement between Korea and Germany Like Germany, Korea has a dual-track approach to the resolution of patent disputes where the interplay and timing of invalidation proceedings and infringement actions is critical 4 / 19

5 Overview of the Korean Legal System Available Remedies for Patent Infringement Civil Action at the District Court Preliminary Injunction Main Infringement Action Administrative Proceedings Invalidation at Intellectual Property Tribunal (IPT) Criminal Action Raid on Defendant s Premises Seizure of Infringing Goods Korea Trade Commission (KTC) Prohibition of export/import of infringing goods 5 / 19

6 Bifurcated Adjudication of Patent Disputes Korea has a dual-track approach for the resolution of patent disputes Patent infringement actions are tried exclusively in the regional district courts Patent invalidation proceedings are tried exclusively before an administrative body, the Intellectual Property Tribunal, within the Korean Intellectual Property Office ( KIPO ) For purposes of appeal, District Court decisions are appealed to the High Court and then to the Supreme Court The Intellectual Property Tribunal s decisions are appealed to the Patent Court and then to the Supreme Court 6 / 19

7 Patent Infringement Actions In Korea, an injured party (patent owner or registered exclusive licensee) may file: a preliminary injunction action; or a main action for damages and/or a permanent injunction (concurrently or following PI) Main actions for patent infringement: No jury system, no U.S.-style discovery (limited discovery through court) No Markman hearing A hearing is held every 4 weeks and at least one technical presentation is held Composition of the panel: 3 judges and 1 technical advisor (dispatched from KIPO) 7 / 19

8 Remedies for Patent Infringement A successful Plaintiff may be entitled to the following remedies in a Patent Infringement Main Action: Monetary damages; Injunctive relief; and Destruction of infringing goods and/or equipment used in making the infringing goods. The patentee s monetary damages may be determined in one of the following measures: The infringer s profits gained as a result of infringement; The patentee s lost profits due to Defendant s infringement; A reasonable royalty; or Reasonable amount of damages based on the judge s discretion 8 / 19

9 Patent Invalidation Proceedings In Korea, an interested party may file an invalidation proceeding to challenge the validity of a registered Korean patent Unlike U.S. practice, although invalidation defenses (such as lack of novelty, lack of inventiveness, or insufficiency of disclosure) are allowed during an infringement action, an alleged infringer can only obtain nullification of a registered patent through invalidation proceedings In response to an invalidation proceeding, the patentee may file a request for correction of the specification and/or claims simultaneously with, or prior to, the filing of an answer Like in Germany, while an invalidation proceeding is pending, the district court has the discretionary power to stay an infringement action In practice, the district court usually proceeds to review the infringement claim first and waits for a decision in an invalidation proceeding when reviewing the infringement claim 9 / 19

10 Interplay Between Patent Invalidation and Infringement Korean patent invalidation proceedings at the Intellectual Property Tribunal generally take between 6 months to 12 months for resolution A hearing is usually held every 3 to 4 weeks Korean patent infringement actions are generally resolved at the following pace: Preliminary Injunction Actions: approximately 4-6 months Main Actions for Patent Infringement: approximately 12 to 18 months Interplay between patent invalidation and infringement: The district court will give deference to an invalidation decision from the Intellectual Property Tribunal A district court will generally proceed to review the infringement claim first and wait for a decision in an invalidation proceeding Invalidation decided by the infringement court on prima facie basis only 10/ 19

11 KTC Unfair Trade Practices Investigation Initiation of investigation Anyone who discovers unfair international trade practices (e.g., import or export of products that infringe on intellectual property rights, including patents, trademarks, copyrights) may file a complaint with the Korea Trade Commission requesting an investigation The KTC may institute an ex officio investigation on reasonable suspicion of unfair international trade practices Within 20 days after the complaint, the KTC must decide whether to initiate an investigation KTC will send a Questionnaire to Respondent Investigation term In principle, cases must be decided within 6 months from the date the KTC initiates an investigation term may be extended twice (generally, a 1 year time frame) If a patent related lawsuit or proceeding is brought during the term of the investigation, the investigation may be suspended until the lawsuit or proceeding concludes 11/ 19

12 KTC Unfair Trade Practices Investigation Investigation method The investigation is handled by the Unfair Trade Investigation Division Generally, a KTC investigation is litigated on the papers where the complainant and respondent may each file 3 briefs leading up to 1 technical presentation and hearing A KTC official may carry out an on-site inspection to analyze the alleged infringing product The KTC may appoint an outside expert to assist in determining infringement and validity of the asserted patents No U.S.-style discovery process like in the U.S. International Trade Commission Enforcement measures If the KTC determines that an unfair trade violation has occurred, then the KTC may issue a correction order and/or impose an administrative fine. Correction order - may consist of a prohibition against import, export, sale, manufacture, and distribution of the infringing product. The KTC seeks assistance from the Korea Customs Service to enforce the prohibition against import/export. Administrative fine may be imposed in any amount up to 30% of the transaction price 12/ 19

13 KTC Unfair Trade Practices Investigation Complaint or ex officio Action Decision on Initiation within 20 days Investigation Determination Corrective Measure Objection to the KTC within 30 days Investigation Timeline (1) Exchange of 2 or 3 briefs by each side (2) Technical presentation (3) On-site investigation (4) Consultation between KTC and outside expert (parties restricted from accessing substance of the consultation) Generally, a 6-month target date after Initiation of Investigation with possibility of two consecutive two-month extensions resulting in a Determination within 10 months of Initiation 13/ 19

14 IP Enforcement in China Significant recent moves toward IP education and IP policy reform Offers a two-pronged system of enforcement: (i) administrative actions; and (ii) court actions Administrative action: faster & lower threshold of proof (e.g., customs) Remedies include an injunction, seizure of illegal income, confiscation/destruction of infringing goods, and fines Court action: most popular choice is IP Branch of Intermediate People s Court (remedies include an injunction and damages award (with possible punitives) Potential Pitfalls: limited number of experienced judges, possible inconsistent application of legal standards, lack of transparency, low damages awards Invalidity not decided by the courts of first instance invalidity arguments must be brought to Re-Exam Board (infringement actions typically stayed during the pendency of invalidity actions) No formal discovery procedures Plaintiff has the burden to collect evidence and court may actively collect evidence 14 14/ 19

15 IP Enforcement in China Importation Bans Unlike the U.S. and Korea, no importation ban option at the Chinese Trade Commission Customs procedures for Soft IP infringement (not effective against stopping importation of infringing patented products at the border but often used in trademark and copyright infringement matters) Registration of rights at Customs Import declaration by an importer Infringement Suspicion Notification to the rights holder No infringement Import permit/cargo released Application for suspension by the rights holder* Case brought before the People s Court Withholding of Customs clearance* * If deposit provided by the importer in addition to deposit provided by the rights holder, cargo may be released before conclusion of the case at the People s Court 15 15/ 19

16 IP Enforcement in China Substantial Changes Underway Rapid economic growth and growing importance on world stage Patent filings in China on the rise China joined the WTO in December 2011 China has agreed to implement the TRIPs Agreement Substantial amendment of Chinese IP laws underway, including legislation on standard-essential technology patents Renewed commitment to IP enforcement increase in IP litigation from 6,000 cases in 2002 to 12,205 cases in 2005 As with many jurisdictions in Asia, education required to combat public insensitivity to IP laws 16 16/ 19

17 IP Enforcement in Japan Court actions (Preliminary Injunction or Main Action): Osaka and Tokyo District Court provide specialized divisions for IP matters IP litigation generally takes about 20 months to conclude Invalidity arguments raised at the Japanese Patent Office not the Court reviewing infringement (but infringement actions are not stayed unless the patent is evidently invalid) Remedies include injunctions and/or damages Japanese courts generally more wiling to award higher damages than other Asian jurisdictions but no treble or punitive damages Pre-filing considerations: no U.S.-style notice pleading standard Plaintiff must describe the specific conditions of infringement in the Complaint (referring to the patent specifications and comparison of the claims as embodied in the accused product) No extensive U.S.-style discovery process Although Plaintiff must gather evidence before filing suit, Defendant may be compelled to produce documents necessary to analyze infringement 17 17/ 19

18 IP Enforcement in Japan Importation Bans Unlike the U.S. and Korea, no importation ban process at the Japanese Trade Commission Like China, reliance on Customs procedure for Soft IP infringement (not effective against stopping importation of infringing patented products at the border but often used in trademark and copyright infringement matters) Import declaration by an importer Suspension motion (either by the rights holder or Customs) Provision of deposit by the rights holder* Identification procedure commences** * Importer may also provide a deposit to clear the cargo ** IPR Officer of the Customs Office examines the case considering submissions and evidence from the rights holder and the importer Infringement Determination 18 18/ 19

19 IP Enforcement in Japan Practical Considerations Recent Japanese legislative changes have resulted in many similarities between Japan and the U.S. regarding patent infringement litigation Unlike jury trials in the U.S., patent infringement actions are tried by specialized judges with the assistance of technical experts to foster greater predictability Although bifurcated tracks for infringement and validity, exchange of information between the court and the Japanese Patent Office can avoid an inconsistent double track The statistics appear to indicate that the win rate for a patentee in Japan is low, but high rate of settlement (with the Court taking an active role) leading to monetary compensation Fewer lawyers specializing in IP law compared to the U.S. and Korea 19 19/ 19