Korean IP Infringement Jurisdiction Centralized at Five Korean District Courts and the Patent Court of Korea: Korean Intellectual Property Case Updates

Patent Infringement Case Jurisdiction in Korea This month, the Korean National Assembly passed amendments to both the Korean Court Organization Act and the Civil Procedure Act to, inter alia, give exclusive jurisdiction, in Intellectual Property infringement matters, to five major district courts in Korea with an appeal from these five district courts going, now, to the Patent Court. At present, an IP infringement cases may be brought at any district court with an appeal to a high court.  Appeals of IP Tribunal Cases were, only, allowed to the Patent Court. These amendments shall be effective in any district court cases filed after December 31, 2015. We expect to see this jurisdictional change to allow cases to progress in a more efficient matter, allow judges increased opportunities to specialize and lead to more consistency in the application of law. Other articles that may be of interest: Korean Business/Service Marks Protection under

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Mr. Song Sings a Sobering Song of Freedom: “Emergency Situation” as a Defense to Drunk Driving Charge in Korea Upheld

I usually don’t write about such mundane legal issues, but the facts here are too interesting.  Mr. Song called a Designated Driver Service to drive him home after a night of drinking with high school friends. In Korea, you can call a Designated Driver to drive you home. The drivers, typically, arrive via public transportation or are dropped off via a motorbike.  The job is considered one of the lower-level jobs in Korea.  The fee for the service is, similar to the fee for a taxi. The Designated Driver and Mr. Song got into a verbal altercation that led to Mr. Song ordering the Designated Driver out of the car.  The altercation was over Mr. Song wanting the driver to drop off a friend on the way to his house – the Designated Driver refused and noted he will not drive further if Song demands that the friend is dropped

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Enforcement of Covenants Not to Compete in Employment Agreements in Korea: Restrictive Covenants in Korea

It is getting easier for an employer to enforce non-compete restrictive covenants in employment agreements in Korea, because of recent judgments by lower Korean courts noting, among other things, the value of trade secrets in competitive industries in Korea. Korean Non-Compete Agreements Recently, a interesting case, in a Seoul, Korean court, concerning the wedding planning business was handed down by the Seoul Central District Court (2104NA63529).  The Court upheld a three non-compete clause against an employee, but reduced a liquidated damage clause from KRW 1,000,000 per day to KRW 100,000 per day. The relevant restrictive covenant noted that: “the Employee shall not work at another company in the same field for three years after termination of employment and the Employee shall pay indemnification of KRW 1,000,000 per day if this Agreement is breached by the Employee.”  The business of the company was the wedding planning business.  The business is very

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Definition of Rape in Korea Elaborated on by the Korean Supreme Court: Criminal Law Basics

A recent decision by the Supreme Court of Korea may make defending against rape charges a little easier for defendants. The Defendant in the case was convicted by a Korean District and High Court for rape and was sentenced to 1 1/2 years in jail. Facts Found by the CourtThe Supreme Court found, among other things, the following facts: Defendant was the ex-boyfriend of the Accuser; The Accuser had a boyfriend; The Accuser was drunk and the Defendant may have been drunk at the night of the alleged rape; The Accuser and the Defendant met each other “spontaneously” and drank together; The Accuser and the Defendant went back to a motel room together; The Accuser and the Defendant had sex; The Accuser screamed that “this is rape” and the Defendant stopped having sex with the Accuser; The Defendant noted that he would take the Accuser to her home, but she

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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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Tobacco Business/Manufacturing Act Upheld by Constitutional Court of Korea

As many of the readers of this blog know, I worked for the Constitutional Court of Korea.  One of the Korean attorneys at our Firm, also, worked for the Court.  No surprise for us in this decision.  Anti-smoking activists lost a challenge to a law that regulates and allows the manufacture and sale of tobacco in Korea.  The activists intent in the challenge is to completely ban the manufacture and sale of tobacco in Korea.  On May 11, 2015, The Constitutional Court, in a 7-2 opinion opined that: “It is difficult to tell if a strong correlation between habitual smoking and lung cancer exists.” The Court went on to note that: “Even if a correlation exists, it is not strong enough to force the government to step in to ban tobacco businesses because lung cancer stems from diverse factors.” The Court, correctly, noted that the government is engaged in many

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Non-Acceptance of Government Report Grounds for an Appeal to Korean Court

Over the past decade, Korea has liberalized its government permit system and has required, in many more instances, only a report or notification to be filed with the government for many activities that previously required approval of a relevant Korean government authority. Even with the change, however, the Korean bureaucracy has, often, been unwilling to give up its power and has simply rejected reports, thus, in reality rejecting the anticipated activity. In a Supreme Court case handed down late last year (2008 Du 167), the Supreme Court of Korea ruled in a case concerning a construction report, that the non-acceptance of the report is justifiable grounds for an appeal of the non-acceptance to court. This development is a welcomed sign for developers and other that are often stymied by a bureaucracy with too much time and not enough business sense.

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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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Selection of Justices at the Constitutional Court Fundamentally Flawed?

The Korean Constitutional Court has established a research institute that has, recently, criticized the appointment system at the Constitutional of Court of Korea. The Court has nine justices that are all appointed by the nation’s President.  However, three of the justices are selected by the Chief Justice of the Supreme Court,  three are selected by the National Assembly and three are directly selected and appointed by the nation’s President.  This Constitutional Court research institute has criticized this system as, potentially, leading to political bias, thus, obviously, believing that some at the Court justices are influenced by those that appoint the Justices. When I worked at the Court, I never saw bias based on the appointing power, however, the fact that most justices have no or little experience other than being a judge or prosecutor leads to the lack of a nuanced understanding of business and societal dynamics. The research report

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Corporate Bankruptcy/Restructuring in Korea: The Line Begins Here (Korea’s Chapter 7 & 11 Bankruptcy)

Corporate bankruptcy/insolvency procedure in Korea is similar, in many respects, to the U.S. Chapter 7 & Chapter 11 bankruptcy procedures with some significant differences. Korean corporate insolvency structure is legislated via the Korean Debtor Rehabilitation and Bankruptcy Law (KDBRB).  The KDBRB replaced a convoluted and often conflicting myriad of laws in the form of the Corporate Rehabilitation, Composition and Bankruptcy Act.  On April 1, 2006 this new law became effective. Bankruptcy Basics in Korea (Chapter 3 of Korean Debtor Rehabilitation and Bankruptcy Law)Bankruptcy, in Korea, is a court-managed liquidation procedure.  The procedure is governed by Chapter 3 of the KDBRB.  The basic salient aspects of bankruptcy in Korea are: The bankruptcy procedure commences after a filing by either a debtor, creditor or group of creditors and determination by the court that a company is “bankrupt.”   The holding of the court that a company is “bankrupt” suspends any execution actions based

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Sentences Lower for the Wealthier in Korea – According to Recent Study

The Korea Herald reported on an interesting study regarding sentencing differentials between, inter alia, those that embezzled lower sums of money to those that embezzled greater sums of money.   The study was commissioned by the Supreme Public Prosecutors Office.  I have not taken a look at the study, but will in the near future. The impression by many, in Korea, is that the most noteworthy cases of embezzlement and bribery concerning substantial amounts of money (often presidents, chairman of conglomerates and their family), normally, receive lighter sentences than those that are involved in less noteworthy crimes.  The study seems to substantiate this belief. However, again, I have never read the finding of the study.  The Korea Herald notes, in part, that:  “The courtroom should be the last place where money talks. Many Koreans, however, remain skeptical about whether this saying applies to the local judicial system as they have seen

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Dow Chemical & Monsanto Prevail at Seoul High Court Against Korean Vietnam War Veterans

The Seoul High Court has ruled, this week, that no “epidemiological correlation” exists between the use of defoliants in Vietnam and the alleged sickness of veterans since the “causes of these diseases are very complicated.” The decision is, likely, a welcomed decision by the numerous Korean conglomerates and chemical companies that are experiencing similar lawsuits.  We will update the reader on future cases that are handed down by the Korean courts. ___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 a Top Attorney by AsiaLaw.

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U.S. Court Refuses to Enforce Taiwan Arbitral Award: Lesson for Drafting Arbitration Clauses in Korea

My friends over at the publication The International Law Office directed me to an interesting case involving the enforcement of arbitral awards that brings light to the fact that, in most cases, arbitration should not be held in a nation that is not a signatory to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Award (“New Convention”). U.S. Court Reuses to Enforce Taiwan Arbitral Award In Clientron Corp. v. Devon IT, Inc. a U.S. Federal Court in Pennsylvanian refused to enforce a US$ 6.5 million award rendered at the Chinese Arbitration Association in Taiwan.  A Taiwanese Court accepted the award for enforcement in Taiwan.  The U.S. Court in Clientron refused to enforce the judgment under the New York Convention and Pennsylvania’s version of the U.S. Uniform Foreign Money Judgment Recognition Act based on the argument noted below. Likely, Korean courts would come to the same

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Class Action/Mass Tort Actions in Korea

Plaintiffs in Korea, with rare exceptions, are unable to file class action lawsuits in Korean courts.  The, only, two exceptions are under the Securities-Related Class Action Act of Korea (derivative/shareholder suits) and certain limited product liability claims under the Consumer Act of Korea (Suits by designated consumer advocacy groups or organizations). However, because of a recent massive data leak by major Korean-based banks, numerous NGOs, some attorneys and legislators have, again, demanded the implementation of a US-style class action system. Two bills are pending at the National Assembly of Korea entitled The Class Action Act of Korea and Consumer Basic Lawsuit Act of Korea.  The Korean Class Action Act is modeled after Rule 23 of the Federal Rules of Civil Procedure. We don’t see these bills coming to a vote anytime soon or the Korean Court System demanding the implementation of a class action law for consumers, because of Korean

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Hanwha Korea Loses Battle in New York Court over Forum Non Conveniens Issue

Hanwha Life Insurance, a Korean Insurance company, case against UBS AG was dismissed by a New York court.  We are, likely, to see the case filed in Korea or Hong Kong in the near future.  This, holding, if appealed, will, likely, be upheld.  The lawsuit stems from Hanwha loss of US$ 30million in a complicated financial product.  The case is, also, weak on the merits, since, intern alia, Hanwha is a sophisticated investor or, at least, should be one. The Manhattan Supreme Court (NY trial court) noted that: “While this court is capable of applying Korean law, a Korean court is more familiar with such law and better suited to resolve the parties’ disputes . . . (claims) arose almost entirely from events and transactions that took place outside of New York and mainly in Korea and Hong Kong.” Let’s see if the case goes any farther in Hong Kong

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Korea Contracts Don’t Forget the Counter-party: Due Diligence before Executing an Agreement in Korea

We see numerous matters coming before us from parties in the States or Europe that are importing a product from a Korean company.  Of course, the products are either faulty or never come. We, also, see cases where a Korean company is importing a product and the importing party ends up not being the party that the American or European company thought they were doing business with. Also, often, companies in Korea are broken up into smaller companies.  The manufacturing arm may be one company, the sales arm one company and these companies are wholly owned by a holding company.  Of course, the agreement ends up being with the broke sales arm. Thus, know the counter-party.  Due Diligence is required.  Due Diligence is not checking the firms website or simply matching up the name on the PO with the Wire Instructions.  A wire will, normally, clear even if the name

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Suing the Korean Government in Court Abroad: The Ashley Madison Saga Begins

Avid Life Media is suing the Korean Government and the Korea Communications Standards Commission for blocking its Ashley Madison website in Korea in a Canadian Federal Court.  If it intends to enforce the judgment in Korea – Good Luck. Avid Life Media runs the Ashley Madison dating site.  The site motto is “Life is Short. Have an Affair.” Seemingly, the Korean Government blocked the site, since the site is believed to facilitate adultery. Avid Life Media is arguing that the case may be heard in a Canadian court, since the the shutting down of the website, in Korea, will decrease the likelihood of the site being used by Korean-Canadian and Asian-Canadians because of the global nature of people’s lives. Additionally, the plaintiff notes that like sites, owned by Koreans, have not been blocked, thus, the Korean government is engaging in “anti-competitive” practices. The plaintiff is claiming an unspecified amount of

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Liquidated Damages Clauses Upheld by Korean Courts

When drafting an agreement with a Korean party, it is, generally, advisable in a case when a breach is not easy to quantify (e.g. Damages for violation of IP Rights) to include a liquidated damages clause. Liquidate damages are monetary awards where a violation is agreed to be, at a minimum, a certain sum of money.  Thus, a liquidated damage clause may note that revealing of the intellectual property shall result in damages that will not be less than USD 100,000. Korean Civil Act Article 398 (1)- (4)(1) The parties may determine, in advance, the amount of damages payable in the event of the non-performance of an obligation. (2) Where the amount of damages determined in advance is unduly excessive, a court may reduce the amount to a more reasonable and appropriate sum. (3) The determination in advance of the amount of damages shall not affect the obligee’s demand for

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Korean Fugitives on the Run: Getting more Difficult with Change of Law

Korea, last May, changed it law to allow the statute of limitation on crimes not to toll for fugitives.  Before the law change,if a defendant was not sentenced, the statute of limitation could toll (expire), thus, the defendant could avoid a conviction based on the tolling of the statute of limitation. For example, if a person is being questioned for a crime with a ten year statute of limitation, prior to the change in the law, the accused would not be able to be prosecuted after the ten year term expired.  Other articles that may be of interest are: Defamation Law Under Korean Law Adultery in Korea: Suspended Sentences Under Korean Law Required Traits of a Great Criminal Lawyer in Korea: Hiring a Defense Lawyer in South Korea Public Defenders in Korea: 77.6% of Defendants Satisfied with Public Defenders Criminal Lawyers in Korea: Defense Lawyer to Hire and Not to

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Weekly Korean Legal News From International Law Firm – IPG Legal for the Week of June 9, 2014

Weekly Korean Legal News From International Law Firm – IPG Legal for the week of June 9, 2014 Korean Legal News Reported by the Media on the Week of June 9, 2014 Global game makers oppose addiction bill ‘Korean firms should pay more attention to privacy’ Criminal justice in Korea: Interrogations and appointed attorneys< Criminal breach of duty (bae-im) under Korean law Law expert re-elected as judge on UN sea tribunal Most Recent Posts from The Korean Law Blog Samsung Threatens Suit Over Reports of Chairman’s Condition Is the Sewol Tragedy a ‘Korean Self Portrait’? by Tom Coyner Korean Economy Strong this Year According to Moody’s Korea in EU’s Hot Water: Korean Fishing Sanctions by EU Korean Tax Laws on Entertainment Companies in Korea: Overseas Tax Deductions ___ Sean Hayes may be contacted at: [email protected] Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the

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