Happy Lunar New Year from IPG Legal!

IPG Legal is an international Asia-focused law firm and business advisory focused on assisting clients in entering and succeeding in Asian markets, including China, Korea, Hong Kong and the majority of nations in Southeast Asia. This past year, among other projects, we are proud to have: advocated for a Fortune 500 company on an ongoing trade dispute with Korean conglomerates. advised international franchise companies in expansion in Asia. advised a high-tech agricultural business in a joint venture with a Korean manufacturing company. prevailed in nearly all of our shareholder, international sales, IP, employment and other commercial and contentions disputes. advised a major Korean entertainment company on the majority of its overseas projects. completed a merger between a major Korean technology company and a Chinese government-controlled corporation. successfully raised funds for growing major corporations through traditional lenders and private lenders. been recognized by international rating companies as one of the leading

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Korean Legal News for the Week of January 27, 2013

This Week’s Legal News Reported by Media Korea tycoon sentenced for embezzling more than $40 million Korea becomes the red flag for Asia’s currency war Korea court rules Samsung chairman doesn’t have to share inheritance with older brother Korea to welcome back 5,000 Vietnamese workers Korea warns North against nuclear test Apple loses appeals bid in Samsung patent battle North Korea refuses to pay Polish builders Korea 4th-largest source for adoptees in US Sale of Korean relic taken in wartime leads to arrest Park, Harper agree to push Korea-Canada FTA Most Recent Posts from The Korean Law Blog Protecting Trade Secrets in Korea: Top 5 Things to Know Before Subjecting your Business Secrets to the Korean Market Korea’s President Lee to Pardon Cronies and “Too Big to Fail’ Companies Sad News for a Samsung Worker: Chemical Leak at Hwaseong Plant Inside Korea’s Two-Tiered Economy by Tom Coyner Sean Hayes in the

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Protecting Trade Secrets in Korea: Top 5 Things to Know Before Subjecting your Business Secrets to the Korean Market

We receive emails, regularly, requesting advice on the protection of IP rights in Korea and China.   Most of the issues I addressed in this blog come from these questions.  I realized, after writing over 900 posts on this blog, that I never drafted a post on trade secrets.  Don’t blame me, blame my paralegal. 🙂 Definition of Trade Secret As you probably know, a trade secret is, simply any design, process, formula or the like that is not known or readily ascertainable by a third party that may provide an economic benefit to the individual possessing the trade secret.  Notwithstanding, non-compete and non-disclosure agreements, Korea and most countries, typically, only protect trade secrets against an alleged violator when the alleged holder of the trade secret makes a “reasonable effort” to protect the trade secret and is able to establish that it has made this reasonable effort to protect the

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Constitutional Court of Korea Declares Real Name Verification Unconstitutional

The Korean Constitutional Court, late last year, declared the real name identification verification requirement in the Act on the Promotion of Information and Telecommunications Network Use and Protection of Information that required some providers of Internet services with forums, bulletin boards and the like to confirm the identity of all users prior to the user being allowed to post comments on the site unconstitutional. The Act specifically required any company or individual who operated any type of website with over 100,000 visitors per day, on average, that allowed users to create content, to confirm the identity of the person prior to allowing them to post content on the site. Over 130 sites were required to obtain confirmation of the identity of users intending to post comments. The Constitutional Court ruled, in part, that the confirmation of identity requirement is unconstitutional since: 1.  Other less restrictive means are available to identify

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Nine Musts for a Succesful License Agreement in Korea

License Agreements in Korea are too often, simply, a spinning of license agreements used in the West.  Your foreign license agreement, in most cases, is not adequate for your needs in Korea.  Our 9 Musts before Engaging in a License Arrangement in Korea 1.  Due Diligence Say it three times and read my posts:  Doing Business in Korea:  Due Diligence, Agreements, Attorneys and Street Smarts 2.  Royalty Clause  Include in your license agreement a royalty clause.  The clause should detail, at a minimum:  Currency conversion rate or payment in the currency of your home nation  Payment terms  Accounting and audit particulars  Tax treatment 3.   Inspection  An inspection of the first batch of goods is a necessity and periodic inspections are recommended for most products.  Agents are available to conduct these inspections. 4.  Choice of LawIf the license is for a smaller value, often, it is best to simply utilize Korea as

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Apple vs. Samsung: “Koreans are furious at China for copying our products. But when Korea does the same, Koreans defend the action. That is a highly distorted form of patriotism. When a company takes the wrong path, it is the public’s job to correct it.”

Long ago, trade economists noted the best guarantee a developing economy to start playing by international rules is when it starts creating its own intellectual property worth defending. Korea is in many ways, has long ago passed that point. And yet, in some ways, it has not yet reached that development milestone. As I have repeatedly pointed out, Korea has yet to develop a market-defining product. It has produced hundreds of thousands of very good to excellent products, many of which have been significant improvements on the original designs created by others. The Galaxy line of products is a good example of this. Putting aside patent issues for the moment, it is not enough to produce high quality products that are often better in various ways than the originals. Producing improved copycat models requires priorities that limit basic R & D. While some R & D is put into improving

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Protecting Brands in Korea Getting Easier?

This week a Seoul Central District Court awarded damages to Chanel for defamation inflicted on Chanel by a room salon that was branded as Chanel Business Club.  The court noted that: “The defendant, by using Chanel’s image for his business which is commonly associated with a negative image, inflicted damage to the brand value of Chanel.”  The defendant never responded to the suit. A room salon is a type of bar where girls entertain men in private rooms by engaging in friendly banter.  Some of the clubs allow girls to leave the bar with the bar patrons.  This trend of allowing damage for damage to the business reputation is welcome, however, the damages awarded are, often, so trivial, that few brands are willing to file suit.  Chanel seems to want to, merely, warn others from using its brand in a nefarious manner. The court awarded damages to Chanel in the

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Maximize Benefits of Korea’s FTAs with U.S. and EU via Legal and Business Consultants in Korea

IPG Legal is happy to announce the formation of the first team of professionals dedicated to providing clients advice and representation on how to maximize the benefits of the KORUS and KOREU FTAs for EU, U.S. and Korean companies. IPG has compiled a team of Korean and international attorneys, senior company executives, patent attorneys, accountants, recruitment professionals, business consultants, custom agents and other professionals to provide services to American and EU companies doing business in Korea under the KOREU and KORUS FTAs.  Since, we are not simply a team of lawyers, we are proud to be the first one-stop shop for all companies wishing to import products into Korea, form strategic relationships with Korean companies and entrepreneurs, retain Korean employees, resolve disputes in Korea and obtain approvals to import and export products from and into Korea. Our extensive research over the last few months of the US and EU FTAs

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Apple Sues Samsung at the Seoul Central District Court for violation of Apple IP

In one of the biggest cases this year, Apple has sued Samsung in a Korean court. Samsung is a supplier of key components for the IPhone and IPad and has a competing smartphone, tablet, laptop, desktop and software solutions that directly compete with Apple. The companies are going at eachother around the world. As one of the most nationalist countries in the Asian region, Korea, with a propensity to disregard/minimize violations of law by the major conglomerates in the belief that protection is needed for these enterprises for the sake of the national interest, will have a unique opportunity to shack this common and naïve belief and finally discount the “Korean Discount” and stimulate foreign investment. I have no information on the merits of the case, but will update readers when I have the chance to read the complaint. The future of Korea is not Korean conglomerates, but foreign investment

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Don’t Just Trust Us: Trademarks in Korea

Our friends over at the China Law Blog have posted on an issue that leads to a good deal of work for my IP litigation practice at my Korean office of my law firm. If you don’t want the added cost of litigating a matter in a Korean court, please register your trademark in Korea. No. No. No. Registering in the U.S. and the E.U. is not enough. Your “international filing” only gives you a grace period to file in other nations that have signed onto particular international treaties. As the China Law Blog notes: China is a first to file country, which means that, with very few exceptions, whoever files for a particular trademark in a particular category gets it. So if the name of your company is XYZ and you make shoes and you have been manufacturing your shoes in China for the last three years and someone

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Protecting your Intellectual Property in Korea: Avoid Trying Different Things & Smoking Funny Things

A popular song regularly played on the radio proclaims that in the summer of 1989 the songwriter was “trying different things and smoking funny things.” If you have any exposure to the Korean market, do your business a favor and don’t be like the songwriter.  All business with any exposure to the Korean market must have a plan in place to protect their intellectual property. Thus, for the sake of your company, at a bare minimum, you should follow these simple recommendations prior to entering Korea.  Every public company and most private companies have valuable intellectual property. In Korea, and most of the world, this basic plan will assist in protecting and also fostering your company’s intellectual property. We should not forget that often intellectual property is the most valuable asset that your company possesses and thus if you have refused to have a protection plan in place, you should question

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IPR Protection in Korea

I recently was directed to an excellent source for information on intellectual property rights under Korean law. The U.S. Commercial Service Korea, a part of the U.S. Department of Commerce, has created and “IPR Toolkit” for Korea. The Toolkit contains the best basic explanation, in English, available on Korean IPR. The pages can be found HERE. The U.S. Commercial Services, correctly empathically states that “registering your IPR is your best strategy” and notes that “[f]oreign applicants are required to retain a licensed local attorney in order to prepare applications in Korean and to conduct necessary follow-up correspondence locally.” Word to the wise, checkout the site and contact an attorney (preferably my firm) to register your IPR and if you are engaged in a Joint Venture make sure your attorney also contractually protects your IPR within the JVC. [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any

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Spansion v. Samsung accepted by ITC

In an update to an article that I wrote for the Korea Times on 11/20/2008 the U.S. International Trade Commission (ITC) has accepted a patent infringement case against Samsung. Spansion claims the alleged infriging technology accounted for over U.S. $30 billion worth of profits for Samsung. This is one of the largest patent infringement cases in U.S. history. If the past is any sign of the future, Samsung will settle this case prior to the finding by the ITC. [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. [email protected]

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Liberalizations Taking Root in Korea

By Sean Hayes (Korea Times 12/18/2008) The mobile phone market has been opened to foreign competition by the President Lee administration. The government’s reforms are finally being realized and consumers should herald this reform and welcome additional reforms proposed by the administration and the Regulatory Reform Committee in order to take Korea out of the darkness of its protectionist past and into the light of free trade and liberalism. On Dec. 10, the Korean Communications Commission dropped the Wireless Internet Platform for Interoperability (WIPI) barrier to entry to the Korean handset market. Hopefully, the numerous other barriers to entry will be lifted in order to encourage investment, competition, innovation, and lower the burdens, while raising the benefits for consumers. In 2005, with the Blackberry introduction into Korea looming on the horizon, the regulatory body, under pressure from Samsung and LG, passed a rule that mandated that all cell phones which

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Patent Bullies vs. Samsung

Patent BulliesBy Sean Hayes (Korea Times 11/24/08) Samsung is embroiled in one of the world’s largest patent infringement suits. Most large profitable companies, from Apple to GE, are facing increasing exposure to such suits. These companies must take a more aggressive stance by engaging in more concerted efforts, creating systematic internal mechanisms to handle disputes and aggressively defend, in court, against attacks that are without merit.Without such efforts from our companies, patent bullies and patent trolls will gain at the expense of consumers, employees, and our most successful companies. For example, Samsung, for the benefit of its reputation and its bottom-line, needs to devise a coherent, transparent, and yet aggressive, legal structure and system to deal with patent infringement suits, while engaging in more cross-licensing schemes. The answer to Samsung’s problems must come from a revamping of the role of in-house and outside counsel. If Samsung, the lifeblood of the

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Elimination of Automatic Acquisition of a Patent Attorney License for Korean Lawyers

The Legal Times reports, in Korean, that attorneys may no longer be able to use the title “Patent Attorney,” but attorneys will still be able to perform patent attorney work if a bill pending at the Legislation Judiciary Committee passes. The Legal Times reports that: After a revised bill of the Tax Accountant Act, which eliminates automatic acquisition of a tax accountant license for lawyers, was presented to the Legislation Judiciary Committee, a revised bill of the Patent Attorney Act, having the same contents as the Tax Accountant Act was passed by the Commerce, Industry and Energy Committee and now is waiting deliberation at the Legislation Judiciary Committee. Especially, because the new president of the Korea Patent Attorneys Association, who was elected on Feb 20. 2008, advocated the bills, patent attorneys are expecting that they are likely to pass. On the other hand, lawyers understand that “it is reasonable to

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Microsft Loss to Korean Professor at Seoul High Court

Microsoft lost a case to a Korean professor of the Korean Aerospace University. Microsoft was held to have violated part of a patent held by Professor Lee Keung-hae. The patent Prof. Lee prevailed on was for a program that automatically switches characters from Korean to English in Microsoft Word. I despise this function in Word, since because of my poor typing skills I often miss type and the program often switches from Korean to English or English to Korean. The damages in the case have not yet been announced. [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. [email protected]

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Luxury 秀 노래방 -Technical Mark? (descriptive mark)

This is a post that appeared on IP Law Blog on the “quality” of goods not being something that can registered as a trademark. Luxury 秀 노래방 We all know the basic principle of trademark law that is applicable in most jurisdictions regardless of whether the jurisdiction has the common law tradition or the civil law tradition, which is that a word or words indicating the quality or quantity of goods (or services) are not registrable as trademark. This principle is incorporated in Article 6 of the Trademark Act of Korea: Article 6 Requirements for Trademark Registration (1) Trademark registration may be obtained except in any of the following cases: (i) where the mark consists solely of a sign indicating, in a common way, the usual name of the goods;(ii) where the mark is customarily used on the goods;(iii) where the mark consists solely of a sign indicating, in a

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Right to Publicity Lawsuit in Korea

Stars break new ground in publicity rights case March 20, 2007 Joonang Ilbo Seven South Korean movie stars and their management agency, iHQ, are suing a local movie magazine, Screen, seeking a total of 350 million won ($370,880) in compensation for commercially using the stars’ pictures without their permission, according to the Seoul Central District Court. The movie stars are Jun Ji-hyun, Jung Woo-sung, Kim Sun-a, Zo In-sung, Ji Jin-hee, Cha Tae-hyun and Yang Jin-woo ― leading stars of television and movies, and among the most visible faces of hallyu, the Korean pop culture wave that is sweeping Asian countries. In their complaint, the movie stars accused the monthly magazine of selling their pictures, taken for interviews with the magazine, on a Japanese Web site where online users pay to download photographs of hallyu stars, according to the court. “The pictures were taken for interviews with the magazine and the

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Quantifying the Value of Intellectual Assets

The Maeil Business News reported on the OECD Plenary session on Intellectual Assets and Value Creation on March 6, 2007. One of the interesting things coming out of the session is that: 40 percent of American firms’ valuation was in intellectual property during the 1980’s, whereas 70 percent of American firms’ value is in intellectual property these days, a total of $5 trillion. Richard Johnson said that innovation can be viewed differently, as its quantifiable value may be bought, sold, securitized and used as collateral, with greater opportunities for small companies and collaboration between big firms and small. He added that intellectual assets can lead to new forms of “complex… systems of (economic) webs and interrelationships.” * OECD Plenary Speaks on ‘Intellectual Assets and Value Creation’ The Organization for Economic Cooperation and Development (OECD) held a plenary session, titled, “Intellectual Assets and Value Creation” with government and private industry representatives

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