Borderless Principle of Territoriality – Patent Law

Introduction Patent law has long developed around the principle of territoriality. That is, a patent granted in one country has effect only within the borders of that country and cannot be enforced against acts occurring in another jurisdiction. Patent registration and enforcement are independently handled under each national legal system. However, with the rise of the global digital economy and the proliferation of online platforms, it has become increasingly common for acts occurring in one country to directly target markets in another. In such cases, the limitations of traditional territoriality become apparent, and there is a growing need to reinterpret its boundaries. The principle of territoriality becomes blurred. A noteworthy case that reflects this issue is the decision rendered by the Korean IP High Court in Case No. 2023Na10693 (May 22, 2025). Case Overview This case involves an Italian company (“A”) holding a patent for sock knitting machines, which filed a lawsuit against a Chinese company (“B”), claiming that B’s actions in China infringed its Korean patent rights. Plaintiff A alleged that Defendant B manufactured infringing products in China and either sold or advertised them for sale in Korea. The court acknowledged that B did manufacture the products in China but found the evidence insufficient to prove actual sales in Korea. However, it was confirmed that B had advertised the products in Korean on Chinese e-commerce platforms and its own website (hosted on servers located in China), and had established a system enabling Korean consumers to make purchases. The decision focused on two key issues: Issue 1: Jurisdiction of Korean Courts in International Cases As this case involved a foreign plaintiff (Italian) suing another foreign defendant (Chinese) for alleged infringement of a Korean patent, a key issue was whether the Korean court had international jurisdiction. The court relied on Article 2(1) of the Act on Private International Law which allows Korean courts to have international jurisdiction if the parties or the subject matter of the dispute has a substantial relationship with Korea. The court evaluated the substantial relationship by focusing on (a) whether the result of the infringement occurred in Korea; and (b) whether the defendant’s advertising activities targeted Korean consumers. It concluded that since the advertisement was clearly aimed at Korean consumers and the infringement effect took place within Korea, Korean courts had proper jurisdiction. Furthermore, Article 39(1) of the same Act specifically provides that in IP infringement cases, a lawsuit may be brought in Korea if the result of the infringement occurred in Korea or the infringing act was directed toward Korea. Issue 2: Whether Overseas Advertising Constitutes Patent Infringement in Korea Under Korean patent law, an “offer for sale” is a form of patent infringement. The main question here was whether B’s advertising activities—carried out on Chinese platforms and websites—could be deemed an “offer for sale” in Korea. The defendant had provided product information in Korean, allowed payment in Korean Won, enabled ordering and delivery within Korea, and provided customer support for Korean consumers. Accordingly, the court determined that these actions constituted a practical attempt to induce sales to Korean consumers and thus qualified as an “offer for sale” in Korea. Conclusion The court ultimately recognized the jurisdiction of Korean courts and ruled that the defendant’s advertising activities constituted an infringement of Korean patent rights. A permanent injunction was issued. This case demonstrates how the principle of territoriality is being expanded and reinterpreted in the digital age. The traditional border-based limitations of patent rights are increasingly being neutralized in the online environment, and courts in various jurisdictions are now focusing more on actual impact and targeted markets rather than formal geographical boundaries. Japan’s Intellectual Property High Court has taken a similar approach. For example: In a 2022 ruling (July 20), it held that transmitting software from a foreign server to a device in Japan constituted “providing” the program invention. In a 2023 ruling (May 26), it found that transmitting system patent components from a foreign server to a device in Japan amounted to “manufacturing” and upheld infringement. In stark contrast to trade wars fought over rigid national borders, the expanding reach of patent rights across virtual borders is, to me, a personally fascinating development.