Korean Patent Infringement for Postings on Alibaba of Korean-Patented Products

The Korean Patent Court (2023na10693) ruled in favor of an Italian patent holder in a Korean patent infringement injunction case against a Chinese manufacturer of a machine alleged to be in violation of the Korean patent and recognized that postings on online platforms with servers overseas are subject to the application of Korean Patent Law. The Chinese company manufactured a machine that was similar to the machine of the patent holders and advertised the machine on Alibaba and also its own website.

Facts

1. The plaintiff, an Italian company, registered a sock knitting machine patent in Korea.
2. The defendant produced a similar machine in China and advertised and sold it by posting it on Alibaba and its own website.
3. The plaintiff filed to enjoin the defendant from shipping their product to Korea.
4. At the Korean Patent Court, the plaintiff argued, in part, that the machine is within the scope of the patented invention, and that the defendant’s posting and selling to Korean consumers constitutes an ‘offer for assignment’ under the Korean Patent Act.
5. The defendant advertised its product in the Korean language and sales and delivery of the products were advertised worldwide.

Patent Court Holding in Alibaba Patent Infringement Case

The Patent Court of Korea held that “Although the defendant advertises and sells on Alibaba, a Chinese e-commerce platform, and on its own website with servers in China, the defendant’s actions constitute an act of inducing sales directly targeting Korean consumers. . . this constitutes an “offer for assignment,” under the Patent Act of Korea, and therefore infringes on the plaintiff’s patent rights.”

The Korean Patent Court opined that “ultimately, the disputed matter and the parties have a substantial connection to Korea, and the main subject of the examination is whether the result of the infringement occurred in Korea. Therefore, even in light of the idea of ​​distribution of international jurisdiction, which is fairness between the parties and a fair trial, the Korean courts have jurisdiction. . . since the plaintiff claims that the defendant infringed upon each of the plaintiff’s patents registered in Korea within Korea and is seeking protection in Korea, the governing law of this case is Korean law according to Article 40 of the Private International Law.”

The court further noted that “considering the fact that the website provides product information in Korean, that products can be ordered and received in Korea, that payment can be made in Korean currency (KRW), and that it provides convenience to Korean consumers such as an inquiry window and consultation regarding product purchases, the defendant’s act of posting each machine in this case on the Alibaba platform and its own homepage can be said to be directly targeting Korean consumers by performing the function of inducing actual sales of each machine in Korea, and this corresponds to an ‘offering for assignment,’ which is a type of act of implementing the product or method of the patented invention,”

The Patent Court’s main analysis, in this case, is whether the products are advertised to consumers in Korea. The Court shall look to the following non-exhaustive factors:

1. If the infringer’s website is in Korean;
2. If delivery is possible in Korea;
3. If orders can be made from within Korea;
4. If payment can be made in Korean currency;
5. If sales requests are accepted from Korean-based consumers; and
6. The alleged infringer’s efforts to avoid patent infringement.

This ruling clearly holds that even if a patent-infringing product is posted on an overseas online platform or overseas server-based website, if it targets consumers in Korea it may be considered a violation of Korea’s Patent Act. With this holding and like holdings, Korea is an excellent destination to fight infringers

by Sean Hayes

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only a few non-Korean lawyers as a Top Attorney by AsiaLaw. Sean is regularly quoted by leading international media sources, including the Wall Street Journal, New York Times, France 24, and Bloomberg. Sean works with leading retired judges, former government attorneys, corporate counsel, and top-rated lawyers who worked with major global law firms throughout Asia, Europe, and North America.