Korean Intellectual Property Protection Strategies in Korea: Trademark Law Korea

The ABA Section of Intellectual Property Law Landslide Magazine (May/June 2015) has an excellent article entitled: Trademark Tips: Seven Experts Share Their Secrets. Ashly Boeshe wrote a great comment that is essential for protecting your IP in Asia.  Ashly notes, in part, that: “Trademark owners should take a global perspective when protecting their brands.  Whether advertising their products or services online or manufacturing products in a foreign country, trademark owners should not only consider seeking trademark protection in their key markets, but also in countries where infringement runs rampant and relief may be difficult to come by. Unlike the United States where trademark rights are obtained through use, several other major economic markets are civil code or “first to file” countries.  In these jurisdictions, trademark rights do not commence with use, but rather are granted to the first person or entity to file a trademark application or obtain a trademark

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Must I grant Male Employees Maternity/Paternity Leave in Korea?: Korean Labor/Employment Law Updates

Article 19 of the Korean Labor Standards Act (LSA), in part, governs whether an employer must grant an employee unpaid maternity leave.  Any employer, under the LSA, must grant a male or female employee maternity leave (Literal translation: Temporary Retirement for Childcare) if the child of the parent is taking care of the child and the child is under the age of 8 (Western/Legal Age). The employer is required to give the employee a maximum of one year unpaid leave, the employer may not dismiss the employee or otherwise disadvantage the employee during this leave period and the employer must include this period in the employee’s “continuous employment” and must pay the employee, at least, the same wage amount as when the employee commences the leave as when the employee returns to work. More articles on employment law that may be of interest to the reader. IPG’s Labor & Employment

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Bail Granted in Korea for Alleged Violations of Korean Banking Laws

We are proud to announce that we, recently, prevailed in a white-collar criminal matter concerning an alleged crime involving violations of Korea’s Banking Laws.  The allegations stemmed from transactions between a payment processor and a major Korean financial institution.  Bail was granted for the non-Korean banker/businessman and, promptly, upon the granting of the bail by the Korean court, the Seoul Prosecution decided to drop all charges against our client.  In Korea, it is very difficult to obtain bail in cases that are being vigorously pursued by the Prosecution.  The conviction rate, in Korea, is greater than 99%. We are proud to note that our criminal defense team has been successful in obtaining bail and not guilty verdicts for the majority of our foreign clients.  Our success is based on the dedication, passion and proactive nature of a very experienced retired judge, prosecutor and one of Korea’s best known expat attorneys.

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Employer Duties during Health Emergencies in Korea: MERS Outbreak in Korea

A client, recently, contacted us requesting to know if an employee that had symptoms of Middle East Respiratory Syndrome (“MERS”) may be requested to not come to work.  We believe it is best to err on the side of caution and request that the employee is tested for MERS and prohibit the employee from coming to work.  The government has established a hotline and visitation by a healthcare professional is even possible at one’s home.   Occupational Safety & Health Act/Prevention of Contagious Disease Act The Occupational Safety and Health Act of the Republic of Korea (“OSHA Korea”) mandates that an employer restrict the access to work of an employee with a contagious disease.  Of course, MERS is a contagious disease.  This obligation is an affirmative obligation of the employer under Article 45 of OSHA Korea and an affirmative duty of the employee/employer under the Prevention of Contagious Disease Act

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New Zealand-Korea FTA Signed: Opportunities Abound for New Zealand Exporters

After seven rounds of negotiation since talks began in June 2009, the New Zealand-Korea Free Trade Agreement (NZ-Korea FTA) was signed in Seoul on 23 March 2015. The two nations have a long history of friendship and co-operation dating back to the Korean War, and in trade are natural and complementary partners: New Zealand exports the primary products in demand in Korea, and Korea exports the manufactured goods in demand in New Zealand. The NZ-Korea FTA is a high quality, win-win agreement covering goods and services trade as well as investment. Its provisions will further enhance growth of the New Zealand-Korea trade relationship, worth $4 billion in the year ending June 2014. Under the NZ-Korea FTA, New Zealand exporters will gain improved access to Korea, a nation with a population of 50 million people and already New Zealand’s sixth-largest export destination. New Zealand is Korea’s 40th-largest trade partner, and Korea

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Korea’s Medical Devices Act Amendment: Monetary and Monetary-Like Benefits to Healthcare Workers

The Korean government is fighting the pervasive practice of rewarding doctors and other healthcare providers for utilizing the products of medical device and pharmaceutical companies.  A passive quid pro quo has led, in the eyes of many in the Korean government, to an industry that is dominated by a few players (most of which are noted foreign players). The Korean Medical Devices Act and clarifying rules prohibit manufacturers and importers from providing monetary or monetary-like benefits in all forms but those explicitly listed under the amended Maintenance of Order from Distribution and Sale of Medical Devices Rule (“Medical Devices Rule” or “Rule”).  The amended rule came into force in January of 2015. This Medical Devices Rule covers all types of monetary and monetary-like compensation except for certain specified benefits including: sample, funding of clinical trials, post-market surveillance and support for presentations. The salient parts of this convoluted Rule is as

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Korean Free Trade Agreements In Effect, Under Negotiation and In Consideration by the Korean Government

The Korean Customs Service has an excellent chart noting the Free Trade Agreements concluded, in negotiation and under consideration.  The chart may be found at: Korean Customs: Free Trade Agreement. Over the next couple of weeks a few articles will be posted on this blog on legal issues regarding FTAs.  Please check back or subscribe to The Korean Law Blog. The articles will be drafted by a Korean customs broker and attorneys that work with the custom broker on issues facing clients in Korea.  ___Sean Hayes may be contacted at: [email protected] Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He 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 two non-Korean lawyers as

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How to Successfully Manufacture OEM in Korea: Break Products Down to the Threads

While China is the factory to the world, Korea is, still, a great choice for those that enjoy less headaches.  Even though Korea tends to be easier to painlessly manufacture OEM in, Korea is not without risk or pains. We see an alarming number of cases of fraud and, also, an alarming number of cases where a product infringes on a patent or is made to standard that does not allow the item to be marketed. I have wrote a good deal in other posts how the key to success in dealing with Korean businesses is, often, in listening to my wonderful Italian mother. “My mother once told me to look both ways before crossing the street, carry an umbrella in the spring, and don’t go out alone at night. The advice can go a long way when doing business in Korea or in most parts of the world. It

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Merger/Acquisition Opportunities in Korea: Lotte Korea Buys KT Car Rental from KT Corp.

In a sign of changing times in Korea, KT Corp., a company best known for its telecom business, has sold its car rental business to the unlisted Hotel Lotte Co. Ltd., a company controlled by Lotte Group. The publicly reported acquisition price is over US$900 million. Lotte is a leading Korean-Japanese hotel company with its hands into about everything imaginable including construction, retail, textile, food products, beverages, oil & gas and entertainment.  However, it competitive advantage is in retail shopping and the hotel business.  KT is the former national telecom and, now, a leading player in both fixed and mobile telecommunication.  Yes, I also question why a telephone company would own a car rental company.  The answer lies, often, in the excessive need for conglomerates to grow their ranks of buildings, employees and news headlines.  Often the reason for business lines being formed outside of the competitive advantage of the

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Small Business Compliance in Korea: No Not Only for the Big Boys

We see clients, in Korea, at polar opposites when in comes to compliance – the works or hold everything. The excuse of small companies is usually money.  However, in reality, the cost is, normally, not significant and the advice of proactive counsel, often, leads to more business and less headaches.  We find, that it is, often, more important for a small company to engage in a Korean compliance program, since, when troubles occur they are less likely to be able to pay for the time necessary for the counsel to rectify the problem and therefore more likely to perish because of the issue. For example, we had a client that was audited by the Korean National Tax Service, the result was a tax lien, Immigration hold and a less-than-happy wife.  The large amount owed was caused by the lack of an understanding of the various expenses that could be deduced

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South Korea Suspends Canadian Beef Imports over Mad Cow Disease Concerns

The Korean government has announced that it will suspend imports of Canadian beef after a, recent, confirmed case of mad cow disease (bovine spongiform) in Alberta.  Alberta reported one cow has been found with the disease.  The Canadian government discovered the cow prior to the cow entering the food supply.  Korea previously banned Canadian beef imports in 2011.  This most recent ban comes at an interesting time, considering that the recently-signed Canada-Korea Free Trade Agreement just entered into force last month.  Korea is a net importer of agriculture and agri-food products.  Canada’s beef exports to Korea account to, only, 1% of the total beef industry, however, the issue brings back memories of the 2008 protests over the resumption of U.S. beef imports after an extended ban in 2003. To what extent the Canadian government hoped to avoid just such an issue by signing their recent FTA, we can only speculate. 

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Did Korea Kill Uber? South Korea vs. Uber

The Wall Street Journal has a new article about Uber’s legal challenges in Korea.  The article is well worth a read.  According to the article, the Korean Communications Commission released a statement that said that Uber Korea violated Korean Law by failing to report its Geo-positioning service to regulators.  As I noted in prior blog posts, many international companies have not reported this service to Korean regulators in violation of this law.  The Seoul Metropolitan Government is fiercely arguing that Korean transport law bans individuals or car-rental firms from providing or facilitating taxi services without a license.  As I mentioned before, the Seoul mayor believes in the freedom for a man to marry a man (Seoul Mayor Supports Gay Marriage), but not for these men to choose who they would like to have them drive them to the chapel. 🙂 The mayor has backpedaled on his gay marriage statements, but

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Bye Bye Uber in Korea?

We may see the end of Uber in Korea.  The Korea Telecommunications Commission has requested the Korea Prosecution to file charges against the management of the company for the violation of a law related to location monitoring technology. The Korea Telecommunications Commission claims Korea’s Telecommunication Law requires all companies to register with the Commission any location monitoring services utilized in Korea.  Many of our favorite apps use location monitoring and are not registered with the Commission.  The Seoul Government is in a fierce fight to ban the app in Korea, seemingly, as a means to protect taxi companies and private tax drivers.  We suspect that the Korea Telecommunications Commission will soon block the app from usage in Korea.  The Commission blocks the usage of many websites in Korea that are, inter alia, against the interest of the nation. The blockage of the app, may lead to the end of the

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Retail Business in Korea by Tom Coyner

The following is an article written by Tom Coyner in 2007 that still has relevancy in today’s evolving retail market.  Interesting read on an issue that hasn’t changed much since 2007.  It’s amazing what a decade can bring in a rapidly evolving economy such as Korea. In my recent article I discussed how traditional stores have seen their markets nibbled away by first department store and later convenience stores. As important as these developments may be, Korean consumers are now being offered new alternatives Consider it was only a bit more than a decade ago, 1994, that Costco entered a joint venture with Shinsegae Department Store to create Korea’s first major discount store in Seoul, Price Club Korea. Until the Asian financial crisis three years later, the two partners learned from each other. Shinsegae became familiar with warehouse-like discount super stores and Costco learned about Korean retailing. The two companies

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Non-Compete Clauses in Employment Agreements in Korea

The enforceability of non-competition clauses in Korea is an area of contention, that, often, leads to enforcement actions via criminal and civil suits.  The criminal suits, usually, come in the form of an allegation of the expropriation of trade secrets.  In general, carefully crafted non-compete clauses coupled with tailored actions leading to termination leads, typically, to the enforceability of non-compete obligations by Korean courts.  The Korean Supreme Court in Case # 2009Da82244 (March 11, 2010) iterated a test to determine the enforceability of non-competition covenants in employment agreements in Korea.  No factor, in of itself, is intended to be determinative, however, the Fourth Factor – not paying compensation to the employee in exchange for the execution of the covenant is considered, in most cases in Korea, the most important factor in the determination by Korean courts. The Supreme Court of Korea noted that courts should analyses the following factors in

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Carbon Trading Market Established in Korea: 2nd Largest Market in World

Korea has, recently, established the world’s second largest carbon trading market.  Caps, as of this week, are imposed on over 500 Korean-based companies.  Carbon credits, in Korea, shall be traded via the Korean Exchange.  The Korean government has set limits on carbon emissions for these companies for the period of 2015 to 2017 at a little over 1.6 million tonnes.  Any company emitting more than the amount the company has permits for must purchase carbon credits from the open market.    Korea is the second country in Asia to develop a national carbon trading system.  China has regional trading systems and may launch a national carbon trading system within the next couple of years. It is expected that the market will have a low number of transactions for the next two quarters and the market will, quickly, pickup in the second half of this year.  Many commentators have noted that the

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Credit Rating Agencies in Korea: Due Diligence of Your Supplier, Franchisee, Joint Venture Partner & Distributors

Korea has established four credit rating agencies.  The four agencies are: National Information & Credit Evaluation (NICE); Korea Investor Services (KIS); Korea Ratings (KR); and Seoul Credit Rating & Information (SCRI). Some reports provided by these rating agencies are provided in English.  However, many of the English reports are not complete.  Thus, it is advisable to make sure if you have an English version of a report that it is same as the Korean version of the report. Additionally, it is best to have someone with knowledge of the Korean business climate review the reports, since some clues to issues are unique to Korea. Some companies are required to have a credit rating performed by a Korean rating agency.  If a company wishes to issue asset-based securities and unsecured bonds the company, in Korea, will need to apply for a credit rating via one of the Korean credit rating agencies.

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Korea is a Country of the Future – and Always Will Be by John Lee

John Lee at The Korean Foreigner has a great post today related to Korea’s step back in time.  He, kindly, allowed me to post his article on my blog.  “On December 18th 2014, IKEA, the world’s largest furniture retailer, opened its first Korean branch in Gwangmyeong, Gyeonggi Province. The store is 25,759 square-meters (approximately 277,267 square-feet) in size and it is accessible via train and three inter-city express highways. It would appear that IKEA’s business is booming. So much so that the THREE inter-city express highways that lead to IKEA are congested with cars – all of them customers who want to buy their next furniture item from IKEA. Apparently, doing well in business is not always a good thing. A little over two weeks after IKEA opened its doors to the public, the Gwangmyeong Municipal City has demanded that IKEA come up with a “dramatic breakthrough” by January 7th

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Tax Audits in Korea

Tax Audits, in Korea, often led to extreme stress for our clients.  However, understanding the system and having an experienced tax accountant and sometimes a tax lawyer with experience in audits, normally, leads to a decent outcome from the National Tax Service of Korea. Yes, you will, likely, be audited during your time doing business in Korea.  However, in all but the most flagrant of violations, the financial damage is, typically, minimal . The NTS has a decent basic explanation of the audit procedure in English.  The pamphlet may be found at: Audits in Korea: NTS.  We will be writing more about the audit procedure in the near future. The National Tax Service of Korea is an agency we are happy to say has a website with a great deal of useful information.  The NTS website may be found at: [email protected]

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Accounting & Tax Consulting Services in Korea: JZ Associates

Most of the accounting needs at IPG are performed by JZ Associates.  The majority of our client’s accounting needs are, also, peformed by this accounting firm.  The firm performs for our client’s Payroll Services, Statutory Bookkeeping Services, Corporate Secretarial Services, Tax Advisory Services & often assists us on Customs, Tax & other Administrative Audits.  It is very difficult to find accountants, in Korea, that advise in a proactive manner.  Most are mere bookkeepers  – JZ Associates has a team of some of the most proactive accountants that we have met. If you would like a consultation on a tax matter either contact me at the email below or contact JZ Accounting at [email protected] Over the next couple of weeks, JZ Associates will be posting a weekly post on this blog concerning tax and basic business advice for foreigners doing business in Korea.  ___Sean Hayes may be contacted at: [email protected] Sean

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