We present below a summary of the Symposium, including (i) a general introduction to KTC’s investigations for unfair trade practices (“KTC Investigation”); (ii) recent trends relating to KTC Investigations and decisions thereof; and (iii) strategies to protect intellectual property rights (“IPRs”) through KTC Investigations, as well as defending against them.
A KTC Investigation is launched when import and/or export transactions result in damages due to unfair trade practices, e.g., IP infringement, fraudulent mislabeling of a country of origin. KTC Investigations are different and separate from a judicial proceeding filed with a civil court.
Once a petitioner (“Complainant”) files a complaint, the KTC decides whether to launch an investigation within 20 days from receiving the complaint. Upon deciding to proceed with an investigation, the KTC may require the following during the investigation: (i) exchanges of briefs between a Complainant and an accused infringer; (ii) onsite investigations; and (iii) technology tutorial sessions. In general, within six (6) months from the date of launching an investigation, the KTC issues a determination of whether an IPR infringement has occurred. However, for trademark infringement investigations, the KTC’s goal is to complete investigations within 100 days or less, because those cases are relatively more straightforward in deciding infringement than other IPRs.
If there is a finding that an accused product infringes any IPRs, the KTC may issue the following administrative remedial orders: (i) an order banning a domestic infringer from export, import, sale, and production of infringing products; (ii) an order banning a foreign infringer from landing (entry into Korea) of infringing products; (iii) an order directing the infringer to destroy or have destroyed infringing products; (iv) an order directing an infringer to amend its advertisements to be consistent with the determination; and (v) an order directing an infringer to publically announce that the KTC issued remedial orders against the infringer. In addition to the remedial orders above, the KTC may also impose administrative fines of up to 30% of the relevant transaction amount.
Diagram explaining the general investigation procedure at the KTC (available at https://www.ktc.go.kr:20443/en/pageLink.do?link=/contents/en/EG21000).
Of the fourteen (14) cases initiated and closed by the KTC in 2017, the KTC found infringement or otherwise a violation of law in six (6) out of the fourteen (14) cases. However, of the ten (10) cases initiated and closed by the KTC in 2018, the KTC found IPR infringement in nine (9) out of the ten (10) cases. In other words, the probability of the KTC finding infringement or otherwise a violation of law dramatically increased in 2018 to 90% compared to the data in 2017. We have reproduced the key facts and the determinations of the ten (10) cases in 2018 in the table below.
|Item||Type||Date of Filing a Petition||Progress Status|
|Closed Cases (10)||Ball bearing seals||Fraudulent mislabeling of the country of origin*||Sept. 4, 2017||Violation(Jan. 2018)|
|Bath chairs (2 cases)||Patent infringement||Sept. 11, 2017||Infringement(Jan. 2018)|
|Glass mirrors||Fraudulent mislabeling of the country of origin*||Jan. 24, 2017||Violation(May 2018)|
|Leggings||Trademark infringement||Jan 26, 2018||Infringement(May 2018)|
|Baijiu (liquors)||Trademark infringement||Nov. 29, 2017||Infringement(June 2018)|
|Semiconductor test sockets||Patent infringement||Nov. 9, 2017||Non-Infringement(Aug. 2018)|
|Clothes||Trademark infringement||April 16, 2018||Infringement(Nov. 2018)|
|Toys (MONKART)(2 cases)||Trademark infringement||May 16, 2018||Infringement(Nov. 2018)|
[Jong Yun Kim (Chief Official of the KTC), Investigation System for Unfair Trade Practices—2018 Investigation Status, at 8] * Please note that the KTC considers “mislabeling of the country of origin” an IPR related investigation
Most of the Complainants were Korean companies. We believe this is partly because, supporting government funds for its attorney’s fees are available for small and medium-sized Korean companies satisfying certain requirements. However, several foreign companies were also Complainants, as any foreign company may initiate KTC Investigations to seek remedial orders necessary to protect their registered IPRs registered in Korea.
Lastly, in view of the expeditious nature of KTC Investigations and a recent trend of issuing determinations favorable to Complainants, it is also important to understand what defenses are available for Respondents (i.e., companies accused of IPR infringement in KTC Investigations). In addition to arguing non-infringement, invalidity, and design arounds within the KTC Investigation, defensive strategies that may be considered include promptly initiating one or more separate legal action, including invalidation litigation or negative patent scope trials (a unique Korean procedure for a determination of non-infringement from the Korean Intellectual Property Office) with the Korean Intellectual Property Trial and Appeal Board.
As a concluding remark, the KTC stressed at the Symposium that it will continue to (i) facilitate KTC Investigations in order to fight against unfair trade practices and (ii) encourage companies in need to take full advantage of the KTC Investigation system.