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Practice Notes

Korean Trademark & Design Statistics and Examination Timeframes

In mid-January, the Korean IP Office hosted a presentation about trademark & design policies and trends for 2020. Among the topics presented were filing statistics and the issue of application pendency, with the trademark/design examination timeframes for recent years and predicted timeframes for 2020 being shared. Trademark The below table shows the number of trademark applications filed in Korea for the years 2015-2019, plus a projection for 2020. “Domestic Applications” refers to national applications filed directly with the Korean IP Office, and “International Applications” refers to international (Madrid) applications designating South Korea. The “Examination” columns are the average time taken between filing and first official action. Domestic Applications International Applications Total Applications Examination (months): National Examination (months): International 2015 211,575 (⇑15%) 27,774 (⇑26%) 239,349 (⇑16%) 4.7 5.5 2016 204,013 (⇓4%) 23,742 (⇓15%) 227,755 (⇓5%) 4.8 4.7 2017 202,539 (⇓1%) 31,345 (⇑32%) 233,884 (⇑3%) 5.0 6.7 2018 232,109 (⇑15%) 31,031 (⇓1%) 263,140 (⇑13%) 5.5 6.4 2019 252,228 (⇑9%) 33,996 (⇑10%) 286,224 (⇑9%) 6.5 8.9 2020 [Predicted] 271,000 (⇑7%) 37,000 (⇑9%) 308,000 (⇑8%) 8.6-8.9 10.2-10.8 Design The below table shows the number of design applications filed in Korea for the years 2015-2019, plus a projection for 2020. “Domestic Applications” refers to national applications filed directly with the Korean IP Office, and “International Applications” refers to international (Hague) applications designating South Korea. The “Examination” columns are the average time taken between filing and first official action. Domestic Applications International Applications Total Applications Examination (months): National Examination (months): International 2015 70,259 (⇑9%) 1,991 (⇑577%)* 72,190 (⇑6.3%) 4.4 5.7 2016 66,736 (⇓5%) 2,589 (⇑30%) 69,325 (⇓4%) 4.7 6.6 2017 64,986 (⇓3%) 2,388 (⇓8%) 67,374 (⇓3%) 4.9 7.7 2018 65,434 (⇑1%) 2,287 (⇓4%) 67,721 (⇑1%) 4.9 8.2 2019 66,648 (⇑2%) 2,259 (⇓1%) 68,907 (⇑2%) 5.4 8.5 2020 [Predicted] 68,000 (⇑2%) 2,300 (⇑2%) 70,300 (⇑2%) 5.7-6.0 10.0 * Design applications have been accepted in Korea via the Hague Protocol since July 1, 2014, hence the significant increase in 2015. Faster Registration of Partial-Examination Designs There are two examination tracks for design applications in Korea: (i) full examination, and (ii) partial examination, with the track based on the Locarno class of the design. Designs sensitive to trends or which have a short life-cycle, specifically designs which fall under Locarno classes 2 (clothing and haberdashery), 5 (textile piecegoods, artificial and natural sheet material) or 19 (stationery and office equipment, artists’ and teaching materials) are subject to partial examination. This comprises a formality check and limited industrial applicability/novelty requirements. Designs in all other classes are subject to full, substantive examination. In 2019, the examination pendency for partial design applications was approximately 60 days. In order to better serve applicants and allow for faster protection of designs which may have a very short lifecycle, KIPO intends to reduce this time to 10 days in 2020. This will be achieved by shortening internal administrative procedures and also recruiting new specialist examiners. As shown above, this contrasts with the 6 months for full examination design applications and 10 months for international designs predicted for this year. Author Recent Posts Jonathan MASTERS Latest posts by Jonathan MASTERS (see all) Author Recent Posts Yujin JUNG Latest posts by Yujin JUNG (see all)

2020-02-11
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Practice Notes

Criminal Punishment for Copyright Infringement (Korean Supreme Court Decision)

On December 24, 2019, the Korean Supreme Court rendered a decision in case 2019Do10086 relating to the conditions for criminal punishment for copyright infringement. According to the decision, which relates to software programs, in order for a suspected copyright infringer to be punished for violating the Copyright Act the suspect must be identified, and it must be precisely specified whether the act of the identified suspect is (i) a direct reproduction (i.e. copying a program) or (ii) an exploitation in business of a copyright-infringing copy of a program by a person who has acquired it with the knowledge of such infringement (i.e. a malicious use of a program). We will briefly discuss the case and its implications. Case Background The criminal defendants in this case are an advertising sales agency and subsidiary whose employees copied dozens of program works via unauthorized means, or used the same with bad faith in their work. After investigation, the prosecutor stated the criminal facts subject to judgment in the indictment such as “the defendant companies infringed the copyright of the program copyright holder as unidentified employees from the defendant companies obtained the program work via unauthorized copying and used it in their work”. Comment Article 136(1) of the Korean Copyright Act provides that a person who infringes on an author’s economic right or other property rights protected pursuant to the Copyright Act by means of reproduction may be subject to penalty provisions. Additionally, Article 136(2)-4 provides that a person who has acquired a copy of a copyright-infringing program with the knowledge of such infringement and exploits it in business may be subject to penalty provisions. That is, though the use of the program itself is not included in the conventional type of program copyright infringement, the legislation has been worded to ensure effective copyright protection for programs by considering the intentional exploitation in business of copies of copyright-infringing programs. Therefore, a person infringing on an author’s program copyright by means of reproduction may only violate above-mentioned Article 136(1) relating to copying, but would not violate Article 136(2)-4 relating to malicious use. In the decision, the prosecutor stated in the indictment that the defendant company infringed the copyright of the program copyright holder as unidentified employees from the defendant’s company obtained the program work via unauthorized copying and used it in their work. However, the Supreme Court found that the charge merely stated that the “employees obtained the computer program by unauthorized copying and used it in their work”, and so it is not clear whether the employees are in violation of Article 136(1) or Article 136(2)-4. Under the Korean Criminal Procedure Act, in order for a criminal defendant to be able to fairly defend their case, the charge must be stated clearly, with the time and date, place, and method of the crime specified. Criminal punishment of copyright infringement is no exception to this rule. Accordingly, as the criminal defendants in this case could not easily make a defense, the defendants could not be punished under either provision. Analysis According to this decision, in order for a corporation to be punished for copyright infringement, employees responsible for infringing the copyright must be individually identified, and for each identified employee it should be specified whether they are a person who copied the program, or a person who acquired and used the copy with knowledge of the infringement. Therefore, this decision will likely affect conventional crackdown practices by copyright holders seeking corporate liability due to the existence of illegal software stored in the media managed by a particular corporation. Author Recent Posts Yoon-Jung SHIN Latest posts by Yoon-Jung SHIN (see all)

2020-01-31
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Practice Notes

Software-related Korean Patent Act Amendment (from March 2020)

While software is automatically afforded copyright protection at the time of creation without the need for any special procedures, copyright protection protects the specific expression of an idea, not simply the idea itself. This can be problematic as no protection is available via copyright with regard to imitation software where the same idea may be expressed in a different way. There is currently no means to protect software resulting from a developer’s original idea in a manner equivalent to patent protection. Though there have been continued attempts to amend patent law to include protection for software per se, such attempts have failed due to concerns raised by private groups that doing so would excessively expand the range of infringing articles and lead to the shrinking of related industries. Current Practice According to current examination guidelines, protection is available for software only when embodied in a “tangible medium”, with no adequate protection available for software distributed online — a situation out of sorts with the reality of the modern world where the distribution of software increasingly revolves around online channels. Protection for software is available via process patents by specifying a series of processing steps. However, Article 2 of the current Patent Act distinguishes between acts of practicing process and product inventions as follows: Product: Manufacturing, using, assigning, leasing, or importing the product or offering to assign or lease the product (including displaying the product for the purpose of assigning or lease; hereinafter the same shall apply) Process: Using the process As a result, if software infringing a process patent (by way of example, a method of adjusting audio volume automatically in relation to vehicle speed) were to be distributed online for the purpose of sale, this would not be regarded as infringement of the patent. The reason for this is because the act of distributing software online for the purpose of sale is not itself regarded as practicing the patented method (i.e. using the method of adjusting audio volume automatically in relation to vehicle speed). Amendment According to an amendment passed on December 10, 2019 and due to come into effect from March 11, 2020 (Law No. 16804), the above-mentioned Article 2 of the Patent Act will be amended to bring the act of “offering the use of the process” within the definition of practicing an invention, in addition to the current “using the process”. This will mean that acts of selling patent-infringing software online, etc. will be regarded as practicing a patented invention. Nonetheless, online transmission of patent-containing software will not be deemed patent-infringing in all cases as the amendment contains a requirement that the offering of use of a patented process be intentional (specifically, offered in the knowledge that use of the method would infringe patent rights) in order for patent rights to be effective against the would-be offender. This limits offenders to sellers who illegally distribute software knowing that patent rights are being infringed. Accordingly, as infringement is not acknowledged if the seller is unaware of the infringement, it will be necessary for patent right-holders to first deliver warnings (cease-and-desist) to sellers illegally distributing software which infringes their patent. Wrap-up Following the amendment, adequate protection will be available not only against offline sales of patent-infringing software, but also online sales of the same. Offline sales of patent-infringing software may be protected against via patent claims relating to software embodied in a tangible medium (product claims), while online sales may be protected against via patent claims relating to a series of processing steps (process claims). Author Recent Posts Jae-hwan SIM Latest posts by Jae-hwan SIM (see all)

2020-01-17
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Practice Notes

Patent Term Extension in Korea

The Korean patent term extension (PTE) system is comparable to the provision of supplementary protection certificates (SPC) in Europe. Like SPCs, the PTE system was introduced to compensate the patentee for commercialization delays due to clinical studies for safety and efficacy of drugs, testing for efficacy of pesticides, and regulatory review of the documentation requirements for marketing authorization (MA). Eligibility Patents eligible for PTE are valid patents for substances, processes, uses, and compositions, and only one extension per patent is granted, for a maximum period of five years. Different from the SPC filing term of 6 months from the MA date, in Korea, the PTE application should be filed within 3 months from the MA date. However, PTE applications may not be be filed within 6 months before the expiry of the patent term, since generic competitors may expect the original patent to expire and already be preparing to bring their cheaper generic drugs to market. Among other requirements, to be eligible for PTE, the relevant subject matter must be a new substance for which the first MA has been granted. According to a revision of the Enforcement Decree of the Patent Act in 2013, only new substances are eligible for PTE. Term & Scope In the U.S., the FTA calculates the extendable term and informs the USPTO and the patentee. However, the Korean Intellectual Property Office does not calculate and award PTEs automatically; the patentee must file an application for PTE and calculate the length of extension for which they are eligible. Extension is generally based on the length of the domestic clinical studies period plus regulatory review period, but any period of delay attributable to the patentee would be deducted. A March 2017 Supreme Court decision provides clear guidance on what constitutes a “period of delay attributable to the patentee.” For example, if one division of the Ministry of Food and Drug Safety (MFDS) requests a patentee to file supplementary documents concerning safety-efficacy data within a designated period for response while another division is still conducting examination, the response period cannot be considered to be time solely attributable to the patentee. Regarding the scope of extended rights, Article 95 of the Korean Patent Act stipulates that PTE covers only patented inventions related to an approved product and any use approved for the product. Accordingly, the scope of extended rights is limited to a product covered by MA, rather than the scope of the original patent, despite PTEs being granted for the entire scope of the patent claims. 2019 Supreme Court Ruling In 2019, the Korean Supreme Court made a notable ruling concerning the scope of extended rights (Case Ref. 2017Da245798). In this case, a major point in question was whether or not modified salts are within the scope of extended patent rights. The Supreme Court reversed an earlier Patent Court decision and recognized, for the first time, the enforceability of an extended right against a competitor’s product comprising a different salt. In particular, the Court pointed out that the literal wording of Article 95 is that an extended right covers a “patented invention” related to the approved product, not the “approved drug” only, and stated that the primary consideration in determining the scope of a drug patent under term extension is whether the active ingredient, the therapeutic effects, and use of a product in question are identical to those of the approved drug, and whether the modified salts are readily interchangeable by one skilled in the art. Based on such reasoning, the Court found that the two products in question have the same therapeutic effects derived from the identical active ingredient, i.e., solifenacin; and a person skilled in the art would easily replace succinate with fumarate. We are of the opinion that the Supreme Court considered the purpose of the PTE system, which is to ensure patent protection to promote research and the development of new drugs, since if the scope of protection is granted for approved products only, it would be very easy to circumvent the protection conferred by the PTE, rendering the PTE worthless. The PTE system is a matter of policy concerned with balancing conflicting interests. Therefore, further thought should be given to the balance between generic market entrants and incentives for brand-name pharmaceutical innovators. Author Recent Posts Seo-young LEE Latest posts by Seo-young LEE (see all)

2020-01-14
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Practice Notes

Patent Prosecution Highway (PPH) in Korea – FAQs

Since the introduction of the US-Korea PPH pilot in 2008, we have received various and wide-ranging questions regarding PPH implementation, including requirements, procedures, costs, and eligibility for using the PPH. Korea participates in the Global PPH pilot, IP5 PPH pilot, and also has a number of separate bilateral agreements with IP offices in other jurisdictions. Most recently, programs based on bilateral agreements with the EAPO (Eurasian Patent Office), IP Viet Nam (Vietnam) and the SAIP (Saudi Arabia) were launched in 2019. Korea presently receives the fourth largest amount of PPH requests as an Office of Later Examination (OLE), following the US, China and Japan. We have prepared the following FAQs in order to assist foreign clients in considering whether to use the PPH in Korea. (1) At what stage in the prosecution procedure may PPH prosecution be requested? PPH prosecution may be requested at the time of, or after requesting examination, and prior to receiving a first office action. (2) Is it permissible to submit amended claims when filing a PPH request? Yes. (3) Is it permissible to submit amended claims after filing a PPH request? If so, when is the deadline for submitting such amendment? Yes. Amended claims may be submitted before receiving a first office action. In addition, if the first office action is a Preliminary Rejection, the claims may be amended when responding to the Preliminary Rejection. (4) Are there any other amendments that should be made when filing a PPH request? If claims allowed in the Office of Earlier Examination (OEE) do not satisfy Korean description requirements, such claims would need to be amended accordingly. (5) Is it possible to file a PPH request in Korea based on an examination result from an office other than the Office of First Filing (OFF)? For example, is it possible to file a PPH request in Korea in the following situation? Yes, this is possible according to the IP5 PPH and Global PPH programs launched on January 6, 2014 For example, if you file a US priority-based PCT application and enter the national phase in Korea and Japan, should the application be accepted in Japan, you could file a PPH request in Korea based on the OEE Japanese examination result.  (6) The applicant has two or more allowed applications. Which application is preferred to be used as the basis for filing a PPH request in Korea? Generally, examiners in Korea hold EPO, Japanese, and US examination results in equal regard. Thus, if there are two or more allowed applications from these jurisdictions, any may be relied upon as the PPH request filing basis. In the past, it was believed that the grant rate for PPH requests based on a corresponding JP or EP application was slightly higher than that for a US corresponding application, but this no longer appears to be the case. (7) Please list the pros and cons of using the PPH. Pros:  1. PPH applications are examined earlier than non-PPH applications. Thus, you are able to obtain a patent quickly. 2. The grant rate for PPH applications is higher than that for non-PPH applications. 3. The average number of preliminary rejections for PPH applications is lower than that for non-PPH applications. Thus, you are able to save on office action response costs. Cons: 1. In order to file a PPH request, the KR claims must be the same as the claims accepted by the OEE. When a PPH application is accepted directly without an office action being issued, we lose the opportunity to amend the KR claims to be broader than the claims accepted by the OEE. 2. Since PPH applications are examined earlier than non-PPH applications, the period for amending the claims based on any market changes or changes in technology is shortened. 3. Additional fees are incurred to file a PPH request. (8) Are there any official fees for filing a PPH request? If so, how much are they? Yes. The official fee is ₩200,000 KRW (Approx. $166.70 USD). [Exchange rate: $1 USD = ₩1,200 KRW] (9) Are PPH applications examined earlier than non-PPH applications? Yes. (10) In the case of early examination of a PPH application, when is the first office action issued?  The first office action is issued, on average, within 2.5 months from the date the PPH request is filed. [*] (11) How common is it for the first action in a PPH application to be a Notice of Allowance? According to recent data, a Notice of Allowance is issued as first action in 21.1% of PPH applications. [*] (12) How long does it take to receive a final decision after filing a PPH request? According to recent data, the average time for a final decision to be issued is 6.2 months. (13) What must be submitted to participate in the PPH? (a) Copy of the claims that are determined to be patentable in the Office of Earlier Examination (OEE), with Korean translation (b) Copies of all office actions from the OEE, with Korean translation (d) Copies of references cited by the OEE examiner (d) Claims correspondence table. It is not necessary to submit items (a) and (b) when the documents are available via the Dossier Access System (DAS) of the OEE. (14) Do you have any other statistics which show advantages of using the PPH January 2019 – June 2019 [*] PPH PPH & non-PPH (a) Grant Rate [%] 80.8 66.7 (b) First Action Allowance Rate [%] 21.1 5.8 (c) Average Pendency from PPH Request to First Office Action [months] 2.5 11.1 (d) Average Pendency from PPH Request to Final Decision [months] 6.2 15.7 (e) Average Number of Office Actions 0.82 1.05 [*] Source: Patent Prosecution Highway Portal Site (https://www.jpo.go.jp/e/toppage/pph-portal/statistics.html), Accessed January 06, 2020 Author Recent Posts Jeong-seok LEE Latest posts by Jeong-seok LEE (see all)

2020-01-13
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Practice Notes

Admissibility of New Prior Art at the Korean Patent Court

Introduction Trial decisions rendered by the Intellectual Property Trial & Appeal Board (IPTAB) with respect to appeals against final rejections at the Korean IP Office (KIPO), as well as invalidation trials etc., may appealed at next instance to the Korean Patent Court. For ease of understanding, the order of escalation for appeals of KIPO decisions is KIPO > IPTAB (an administrative tribunal within KIPO) > Patent Court > Supreme Court. Below we will look at whether new prior art not submitted at the IPTAB trial stage may be submitted during the subsequent Patent Court proceedings, and what exceptions may exist. What may be submitted? At the outset, referring to court precedents we may say that the submission of new arguments and/or prior art is, in principle, permitted at the court stage. An exception to this rule applies in appeal procedures to cancel a final rejection (in which KIPO is respondent to the action), where KIPO may not present new rejection reasons as this would have the effect of depriving the applicant of a chance to present arguments/amendments to overcome the rejection reasons. Such new rejection reasons should instead have been presented via an office action to which the applicant could have responded appropriately. For this reason, even if listed as prior art in the detailed description of an applied-for invention, if the reference in question has not been used to deny inventive step then it may not be submitted at the court stage (Korean Supreme Court decision 2001Hu2757 [10 Oct 2003]). Further, unless the prior art listed in the detailed description of any reference cited at the IPTAB trial stage is described throughout the specification, or is a well-known or commonly-used art, its submission would be deemed to constitute a new rejection reason (Korean Patent Court decisions 2005Heo4713 [6 Sep 2006] & 2003Heo5569 [25 Jun 2004]). Conversely, KIPO would be permitted to submit new materials if KIPO had already argued at the IPTAB trial stage that the feature in question is a well-known or commonly-used art and such new materials are to support KIPO’s argument. Furthermore, KIPO may argue that it is improper to allow amendments at the Patent Court stage based on new refusal grounds not indicated in a dismissal of amendment or which had not been argued at the IPTAB trial stage (Korean Patent Court decision 2007Heo2681 [21 Nov 2007]). With regard to dismissals of amendment, there is no provision in the Korean Patent Act requiring KIPO to notify the applicant of its reasoning and allow submission of arguments/amendments before dismissing an amendment. Conclusion To sum up, in principle it is acceptable to submit new arguments and/or prior art at the court stage which were not previously submitted at the IPTAB trial stage. However, limitations apply when KIPO is respondent in a trial to cancel a final rejection, in cases where allowing new arguments and/or prior art could harm the applicant’s defense and procedural interests. Author Recent Posts Young-min KIM Latest posts by Young-min KIM (see all)

2020-01-13
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Practice Notes

Recouping examination+appeal fees and reducing annuities in Korea

The potential to reduce patent fee expenditure will be of interest to most, if not all, corporations, as the aim of patent departments is normally to build and maintain as strong a patent portfolio as possible within a fixed budget. With this in mind, I would like to share some ways to have already-paid fees refunded and also potentially reduce future costs in Korea. In principle, already-paid official fees are not refundable. However, there are some exceptions to this rule, specifically with regard to examination request fees and appeal fees. Post-registration, it is also possible to reduce annuity fee expenditure by abandoning specific claims. Refundable Fees Examination request fees Fees paid to request examination can be refunded to the applicant if the application is actively withdrawn or abandoned before the examination process begins. Specifically, an applicant may request a refund of the examination fees upon officially withdrawing or abandoning a patent application before any of the following events occur: (i) KIPO issues an order for consultation to resolve double patenting issues; (ii) KIPO receives prior art search results from a KIPO-designated agency; (iii) a first preliminary rejection is issued; or (iv) a Notice of Allowance is issued. [Example for 20 claims: ₩1,023,000 KRW | Approx. $930 USD] Appeal fees If a rejection decision is revoked by the Intellectual Property Trial and Appeal Board (IPTAB) upon appeal, the fees paid for filing the appeal can be refunded. [Example for 20 claims: ₩450,000 KRW | Approx. $410 USD] Alternatively, if the petitioner withdraws their petition for an appeal before they are notified of the conclusion of appeal examination, 50% of the fees paid to file the appeal can be refunded. [Example for 20 claims: ₩225,000 KRW | Approx. $205 USD] Patent fees If a patentee abandons a patent right, the patent fees (issue fees or annuity fees) will be refunded for the years following the year in which the right was abandoned. Also, when paying patent registration fees or annuity fees, individual claims can be abandoned to reduce the registration fee or annuity. The following example shows the potential saving throughout the life of the patent if 20 claims are abandoned. Year Annual Saving 1st–3rd ₩260,000 KRW | Approx. $240 USD 4th–6th ₩440,000 KRW | Approx. $400 USD 7th–9th ₩760,000 KRW | Approx. $690 USD 10th–20th ₩1,100,000 KRW | Approx. $1,000 USD Take-Aways If a patentee does not wish to pursue a pending application, in the case that examination has been requested but the results have not yet been issued, fees may be recouped by actively withdrawing the application rather than allowing it to simply lapse through inaction. Similarly, if an IPTAB administrative trial has been filed to appeal a refusal decision, a portion of the fees paid may be recouped if the trial request is withdrawn. In addition, when paying patent registration or annuity fees, the fees payable to KIPO can be reduced by abandoning any claims which are no longer required. On a related note, the period for requesting examination in Korea was reduced from five to three years starting from March 1 2017. However, by filing a request for deferred examination, the issuance of the examination result may be delayed until up to five years after the application filing date. In this case, the examination request fees do not have to be paid when filing the request, and payment can be delayed until two months prior to said five-year cutoff. Author Recent Posts Jae-hwan SIM Latest posts by Jae-hwan SIM (see all)

2019-12-27
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Practice Notes

Acquired Distinctiveness & Consumer Survey Guidelines in Korea

In April this year the Intellectual Property Trial & Appeal Board (IPTAB) released guidelines concerning the use of consumer surveys to show consumer awareness, and in May the KIPO-published Trademark Examination Report contained general guidelines regarding the criteria considered by examiners when determining whether distinctiveness has been acquired through use. We will take a look at these guidelines in the light of a recent IPTAB decision on an appeal against a refusal decision where the mark was determined to have acquired distinctiveness. Acquired Distinctiveness: Relevant Law & Guidelines Law Descriptive marks must acquire “secondary meaning” distinctiveness to be registerable as trademarks. If a mark is not inherently distinctive (e.g. the mark indicates the quality, effect, usage etc. of the goods/services, is a simple mark, etc.), Article 33(2) of the Korean Trademark Act provides that the mark may still be registrable when “such trademark is recognizable to consumers as a trademark indicating the source of goods of a specific person as a result of using the trademark before filing an application for trademark registration”. In such case, protection is granted only for the actual goods/services the mark has been used with. The Trademark Act was amended in June 2014 to lower the bar of acquired distinctiveness; previously the relevant mark had to be “remarkably recognized among consumers” (emphasis added), while the current Act requires the mark to be simply “recognizable to consumers” as having a source-indicating function. Despite this amendment, however, the actual number of registrations granted following recognition of acquired distinctiveness remained low, with a total of 68 cases in the three-year period following the revision. Guidelines In an effort to combat this, following a December 2018 study commissioned and published by the Korean IP Office (KIPO) which analyzed around 400 court decisions and over 1,000 IPTAB decisions dealing with acquired distinctiveness from over a 30+ year period (“A Study on Establishing Standards for Recognition of Acquired Distinctiveness Through Using Marks in Major Products and Building Database for Cases of Judgement on Acquired Distinctiveness”), the following guidelines were made available earlier this year (note that all use/sales/advertising etc. data must be specific to Korea): Period of Use In principle, 5 years of genuine non-competitive continuous use required (market conditions considered). Acquired distinctiveness obtained in a shorter period based on large-scale advertising and publicity may also be recognized. Method/Frequency of Use Use of trademark on relevant products (direct use) and exposure in mass media, internet portals etc. (indirect use) both considered. Sales Turnover and number of sales considered with respect to the product price and size of the relevant market. Market share data considered with respect to the number of competitors in the relevant field. In situations where actual turnover is modest but an SME accounts for a large share of the market in a field with small market size, this fact will be considered. Marketing/Publicity All kinds of advertising including online promotion considered (not only TV and printed media). In cases such as prescription medicine where advertising is not possible, this fact will be considered. Consumer Surveys (Detailed separately below) Product/Market Conditions Even in cases where the trademark is considered to indicate a specific source, if the mark should be available for individuals/competitors to use freely, acquisition of distinctiveness may not be admitted. Related Legal Precedents Related decision based on the Trademark Act stating that the mark is an indication of a specific source: acquired distinctiveness recognized. Related decision based on the Unfair Competition Prevention and Trade Secret Protection Act stating that mark is widely known domestically or has a source-indicating function: taken into account when deciding whether distinctiveness has been acquired. Identity of Marks Where the applied-for mark and the mark in actual use differ, the following conditions apply: Difference in uppercase/lowercase or size only ➜ OK (e.g. “” vs “”) Use of only one part of a mark consisting of same mark in Korean and other languages ➜ OK (e.g. “” vs “ ”) Combined word/device mark used in different form ➜ Strength of combination and actual use considered: Recognized: “” vs. “” Not recognized: “” (Korean transliteration of “The Foot shop”) vs. “” Identity of Goods/Services Should be practically identical, though need not be physically identical. KIPO has also amended their internal procedures, with claims of acquired distinctiveness now evaluated by a three-examiner team rather than a single examiner. If this initial evaluation is positive, a special committee for judging acquired distinctiveness will make a final assessment before the decision is rendered. Consumer Surveys: Guidelines With the increasing use of consumer surveys in trademark matters, the IPTAB released the following guidelines concerning survey credibility in April this year: Survey-Conducting Organization Survey method must be verified and conducted by a reputable organization (judgement based on size of organization, no. of surveys conducted, number of full-time analysts on staff etc.) Organizations already registered with the National Election Survey Deliberation Commission are deemed to be independent polling organizations (currently 80 members including Gallup Korea, etc. which are vetted for objectivity and reliability in carrying out election polls). Sample Selection The characteristics (location, sex, age etc.) of the consumers of the relevant trademark/product must be reflected in the survey. As the relevant respondents may be different from product to product, where the product characteristics are important (e.g. female hygiene products, medicines used to treat specific diseases etc.), these characteristics must be reflected in the sample. Survey Credibility Response rate of below 30% will be deemed unreliable, and over 50% reliable. (30%-50% at examiner’s discretion.) Sample size may vary depending on the type of product, but below 500 will generally be deemed unreliable, and over 1,000 reliable. Question style must be precise and non-leading. Questions must deal with only one topic, and be worded in straightforward, clear language. Content must be understandable by all respondents in the same manner, with no unclear content left to assumption. Questions must be relevant, and not outside the scope of ability/expertise of the respondents. Surveys conducted by unverified organizations or using unverified methods will be deemed non-credible. Credibility of the results will deteriorate if the survey is conducted too long after the relevant judgement reference time (depending on the situation this may be present day, or an application date etc. in the past). IPTAB Appeal: Decision No. 2018Won2975 The case relates to a Korean-language trademark application for “최상위 수학” (“Top-level math” in English translation) covering the class 16 goods “mathematics study books or papers; mathematics teaching materials (except apparatus)”. The mark was filed in June 2017 and subsequently refused in October 2017 on absolute grounds for indicating the nature (quality, content) of the goods, with the examiner mentioning that the mark would be intuitively understood as meaning “math [problems] of the highest level”. The applicant filed an argument containing (i) explanation that the mark could be understood in numerous ways; (ii) comparison with other similar precedents where distinctiveness was acknowledged; (iii) information showing use of the mark for 14 years with sales and advertising data; and (iv) results of a 500-respondent consumer survey. Based on this, the applicant argued that the mark had acquired distinctiveness through use. However, the applicant’s arguments were not accepted and in May 2018 a final refusal was issued by the KIPO examiner. The decision was appealed to the IPTAB, where the two questions considered were (1) whether it was right to refuse the mark on absolute grounds, and (2) whether the mark had acquired distinctiveness through use. In their October 15, 2019 decision the tribunal confirmed that the examiner’s original decision to refuse the mark on absolute grounds was correct, but upon review of the submitted evidence (shown in the below) the applicant’s claim of acquired distinctiveness was approved. The application was returned to KIPO for re-examination and published for the purposes of public opposition on November 12th. Evidence Supporting Claim of Acquired Distinctiveness The new guidelines do not specify any particular minimum sales/advertising etc. requirements, with claims being considered on a case-by-case basis in consideration of the size of the relevant market, consumers etc. However, looking at recent rulings where a claim of acquired distinctiveness has been approved may offer some further insight. Below are the details of a handful of cases to which the relaxed requirements for acquired distinctiveness applied, with the details of the above-discussed 2018Won2975 IPTAB appeal provided first: Trademark Applicant Class App. Number (Date) Supporting Evidence & Information (Korea-specific) 최상위 수학 (“Top-level math”) Didimdol Co.,ltd Class 16 40-2017-0080693 (2017-06-29) [Use] 15+ years (study materials for elementary, middle and high school students) [Sales] 2010-2017: Approx. 2.98 million books / Approx. $18.3 million USD [Advertising] 2008-2017: Approx. $400,000 USD (TV, banners, lectures, TV program sponsorship etc.) [Consumer Survey] Conducted by Korea Trademark & Design Association / 500 people (students/parents/teachers) / 77.2% TM recognition; 56.2% associate mark with applicant PARFUMS CHRISTIAN DIOR Class 03 IR 1221382 (2014-08-08) [Use] From October 1999 (perfume bottles) [Sales] 2010-2014: Approx. $14.3 million USD [Advertising] 2010-2014: Approx. $1.9 million USD (magazines, TV, internet search) [Consumer Survey] N/A 아세아 (“ASIA” / “ASEA”) ASIA TECHNOLOGY CO., LTD Class 07 40-2014-0085764 (2014-12-16) [Use] From September 1945 (agricultural machinery) [Sales] Jul 2012 – Jun 2013: 23,643 units / Approx. $46 million USD [Advertising] 2013-2015: Approx. $110,000 USD (newspapers, magazines, exhibitions, shows) [Consumer Survey] N/A Brand New Music Co., Ltd. Class 09 40-2015-0032784 (2015-05-04) [Use] From 2011 (downloadable music files, albums, CDs) [Sales] 2015: 50+ albums / Approx. $1.7 million USD [Exposure] Numerous industry awards (hip-hop, KPOP) / SNS exposure: 66,000 Facebook followers; 24,000 Twitter followers; 83,000 YouTube subscribers [Consumer Survey] N/A SONY CORPORATION Class 09 40-2014-0059037 (2014-09-03) [Use] From 2006 (cameras, lenses) [Sales] Cameras: 2012-2014 Approx. $271 million USD / Lenses: 2013-2015 Approx. $32 million USD [Advertising] 2013-2014 Approx. $16.8 million USD for the “α” (alpha) series camera (TV, magazines) [Exposure] Promoted to consumers via camera classes, advertising via SNS channels [Consumer Survey] Conducted by Gallup Korea / 100 people (age 20-49 male+female) / 75% knew TM related to cameras or lenses; 54.7% associate mark with applicant    (“The Healthier”) CJ CheilJedang Corporation Class 29 40-2016-0042617 (2016-06-08) [Use] From May 2010 (processed meat: ham, sausage etc.) [Sales] Approx. $290 million USD (total from time of product launch) [Advertising] Approx. $10.6 million USD (total from time of product launch) (TV, newspapers, magazines, promotional items, home shopping etc.) [Exposure] Naver Blog (~340,000 results), Daum blog (~130,000 results), News (~32,000 results), YouTube (~4,000 results; 290,000+ views of videos with actress JUN Ji-Hyun) [Market Share] 2015: 8.2% for processed meat (#1 among 1,000+ processed meat brands) [Consumer Survey] N/A 싸이버거 (“Thigh Burger”) Haimarrow Food Service Co., Ltd. Class 30 40-2015-0016852 (2015-03-06) [Use] From Jan 2005 (hamburgers) [Sales] Approx. $93 million USD (total from time of product launch) [Advertising] Approx. $4.4 million USD (Jan 2013 – Sep 2015) (TV, baseball stadium) [Exposure] 961 stores nationwide (as of Sep 2016), blogs, Facebook etc. [Consumer Survey] N/A APP STORE Apple Inc. Class 35 IR 1276162 (2015-10-09) [Use] From Jul 2008 (computer software sales via the internet) [Sales] Korea: 2015 Approx. $2.3 billion USD, 2016 Approx. $1.7 billion USD [Advertising] Korea: 2008-2015 Approx. $76 million USD [Exposure] Korea: Approx. 2.5 billion downloads total (via Apple iPhone, iPad, iPod) [Consumer Survey] Conducted by Gallup Korea (2017)  / 91.6% had heard of “APP STORE” (63.3% in 2013); 50.7% associate mark with applicant; 9.6% consider mark to not have source-indicating function 국민관광상품권  (“National Tourism Gift Card”) KOREATRAVELS CO., LTD Class 36 41-2015-0038118 (2015-08-11) [Use] From 2001 (issuance of gift cards) [Sales] Approx. $850 million USD (total from time of product launch) [Exposure] 2015: Approx. 15,000 gift cards issued; Approx. 20 million total from time of product launch; Redeemable in stores nationwide [Consumer Survey] N/A 여행박사 (“Dr. Tour” / “Dr. Travel”) NHN Doctortour Corporation Class 39 41-2015-0021932 (2015-05-11) [Use] 2010-2015 (tour booking/agency services) [Sales] Approx. $86 million USD (total from time of launch) [Advertising] Approx. $11.5 million USD (newspapers) [Exposure] Various industry awards [Market Share] 2015 summer season: 3rd largest share of online market [Consumer Survey] N/A 천리포수목원 (“Chollipo Arboretum”) Chollipo Arboretum Class 41 41-2015-0052464 (2015-11-03) [Use] From 1979 (operation of arboretum/botanical garden) [Advertising] Newspapers, magazines, online broadcasts etc. [Exposure] Approx. 1.6 million visitors in past 9 years; included in list of “100 domestic destinations all Koreans should visit” [Consumer Survey] N/A Author Recent Posts Jonathan MASTERS Latest posts by Jonathan MASTERS (see all) Author Recent Posts Ben YUU Latest posts by Ben YUU (see all)

2019-12-03
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Practice Notes

Changes to Design Protection Act Enforcement Rules (from October 2019)

A number of changes to the Enforcement Rules of the Design Protection Act came into effect on October 1 st 2019. The main changes — which are generally in the interest of simplifying or relaxing the earlier rules — are briefly explained below: 1. Expansion of permitted addition/amendment of creator information post-registration Previously, creator information could only be added/amended post-registration if the error being rectified was “obvious” (e.g. misspelling, duplication, incorrect transliteration of foreign name, etc.), while other amendments had to be made before a registration decision was issued for a pending design application. Going forward, it will be easier to make additions/amendments even after registration. This change brings the relevant design provisions in line with patents and utility models, for which the equivalent enforcement rules concerning inventor information were updated in a similar manner earlier this year. According to the new rules, where the amendment concerns an omission or “obvious” error in the creator information in the filed design application, rectification will be possible upon request. In other cases, a declaration or similar notarized document will be required from the owner and all other creators listed on the design application in order for the amendment to be reflected. As the rights in a registered design are bestowed only upon the registered owner, an error in the creator information does not practically affect the exercise of rights. Additionally, creator permission is not necessary when disposing of a design right through assignment etc. However, there are certainly circumstances in which owners may wish to rectify the creator information post-registration, and the new rules will make this a possibility. 2. Simplified drawing classification Traditionally, there were three types of drawing which could be submitted for a design application in Korea: (1) Basic drawings [front, rear, top, bottom, left, right and perspective views showing the overall form of the design article]; (2) Additional drawings [section views, enlarged views etc. showing specific parts of the design article]; and (3) Referential drawings [showing the design article in different states of use, etc.]. Going forward, the “additional drawings” category will no longer exist, and any section views, enlarged views etc. should instead be filed as basic drawings. This simplification should reduce the number of office actions issued due to drawing category formalities. 3. Fewer requirements for “special symbol” font designs Font designs are protectable in Korea for Hangeul (Korean script) fonts, English alphabet fonts, numeric fonts, special symbol fonts, and Hanja (Chinese character) fonts. When a font design application is filed, there are a certain minimum number of characters/symbols which must be included. For example, an English alphabet font must include the letters A-Z in both uppercase and lowercase forms. For special symbol fonts, it was previously necessary to include a specified minimum 119 symbols, but this has now been reduced to the 16 symbols shown below: Before (119 required symbols) After (16 required symbols) It is, of course, possible to include other symbols in addition to the basic 16 required symbols. The earlier requirements were said to be a burden for font creators who may not have had a need for some of the previously required symbols, which had to be submitted regardless of the intended use of the font. The relaxed requirements should encourage font creators to seek design protection. For reference, font designs are not protected per se under copyright law in Korea, but can be protected as a computer program work if an infringer uses a copyright font file. Design protection allows for protection of the font design itself. 4. Relaxed examination criteria for products that come in pairs Under the previous rules, when applying for design protection for an article that typically comes in a pair (e.g. shoes), if drawings were only provided for one item of the pair it was strictly necessary to include an explanation in the design description regarding the other item. Going forward, where it would be general common sense to understand that the design article is a pair even if drawings are provided for only one of the items, the examination formalities will be deemed as being met even if no specific explanation is included for the missing item. Where it is not immediately obvious that the design article is a pair, however, an explanation must still be furnished. KIPO has provided the following text as an example: This design represents one of the earbuds comprised in a set of left/right earbuds. The other earbud in the set is symmetrical to this design. While it is still recommendable to include an explanation when drawings for only one item in a pair are being submitted, the relaxed rules should at least mean that fewer formality objections are raised when the design subject can be easily understood as a pair. Author Recent Posts Jonathan MASTERS Latest posts by Jonathan MASTERS (see all)

2019-10-08
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Practice Notes

Korean Supreme Court decision in trial to confirm scope of trademark rights

In August, the Korean Supreme Court decided on case 2018Hu10848, an appeal from the Patent Court in a trial to confirm the scope of trademark rights. The ruling confirmed the scope of comparison permitted in such a trial, and may be interesting to anybody not familiar with such a subject matter. What is a trial to confirm the scope of rights, and what purpose does it serve? The Korean Trademark Act provides for a trademark right holder, exclusive licensee or interested party to request a trial to confirm the scope of rights in a registered trademark (hereafter “scope confirmation trial”). This is an inter-partes administrative trial used to determine whether the use of a specific mark on specific goods falls under the scope of — and would thus potentially infringe — a registered trademark. Scope confirmation trials are heard at first instance by the IP Trial & Appeal Board (“IPTAB”), an administrative tribunal organized under the Korean IP Office. The initial IPTAB decision can be appealed to the Patent Court, and subsequently to the Supreme Court. There are two variations: a positive trial to confirm that specific subject matter infringes a registered trademark (where the trademark owner/licensee is the claimant seeking confirmation), and a negative trial to confirm that specific subject matter does not infringe a registered trademark (filed by an interested party using or planning to use an identical/similar trademark, where the registered trademark owner/licensee is respondent). In addition to the details of the registered trademark, the requesting party must submit a sample of the mark for comparison, as well as a list of goods on which the mark is used. In the case that the mark for comparison includes any portion against which trademark rights would not have effect, the comparison with the registered trademark should be made on the basis of whether the mark excluding such portion(s) would cause confusion as to the origin of the goods. Portions which would be excluded are those prescribed under Article 90 of the Trademark Act, for example the bona fide use of a personal name, common name/quality/shape etc. of the relevant goods, well-known geographical place names, etc. An unregistered mark which comes under Article 99 of the Trademark Act (relating to the right of continuous use of an unregistered mark based on fair prior use, where the mark had a source-indicating function at the time the registered trademark was applied for) may not be subject to a scope confirmation trial. Registered trademarks are assumed to be valid if used on their designated goods. Accordingly, the subject matter for comparison in a positive scope confirmation trial may not be another registered trademark which is used on its designated goods — in such a situation, the claim would be that the mark was incorrectly registered, and an invalidation trial would be a more suitable action. The presumed primary purpose of a scope confirmation trial is to obtain an advance official verdict on potential infringement/non-infringement, with an aim of preventing future conflict. In practice, when the non-registered mark is in use, a scope confirmation trial is often filed alongside a civil infringement suit in which an injunction, compensatory damages etc. may be sought. Vice versa, a party using an unregistered mark may file a scope confirmation trial if a civil infringement claim is brought against them. While the result obtained in a scope confirmation trial can be submitted to the court in a related civil suit, it does not have a legally binding effect. However, the result may carry weight given that the analysis in a scope confirmation trial is performed by IPTAB subject matter experts. Background of the 2018Hu10848 case Party A applied for the “” mark covering class 3 goods in November 2013, and obtained registration in January 2015. In October 2016, Party B applied for the “” and “” marks also covering class 3 goods, but the applications were finally refused based on prior mark citations, including Party A’s mark. Party B appealed the refusal decisions to the IPTAB and shortly afterwards also filed a negative scope confirmation trial to compare a different version of their mark — “” — with Party A’s prior registration in relation to “body soaps”. IPTAB Decision (first instance) The IPTAB decision was rendered in early January 2018 and confirmed Party B’s claim, ruling that Party B’s “” mark did not come under the scope of Party A’s registered trademark rights in “ ”. In the decision, the IPTAB compared the marks in terms of the text portions, stating that “Saboo” and “sobia” are dissimilar overall, as well as the device portions, ruling that they were sufficiently different given the large number of similar flower devices registered in class 3, meaning that any similarity had to be judged within a very narrow range. Party A appealed this decision to the Patent Court, and a decision to uphold the appeal and cancel the earlier IPTAB ruling was rendered in May 2018. Patent Court Decision (second instance) In its decision, the Patent Court considered the text portions of the two marks in detail, discussing the similar pronunciation and similarity in appearance (both 5 letters long; first and third letters identical), and also commenting that the device portions of the marks could intuitively be considered as similar. The decision went on to make a detailed comparison of the packaging styles being utilized by both parties at the time (product wrapped with a black-edged green band with three rows of type in white capital letters, etc.), and also explained the history of the business relationship and conflict between the parties. Product comparison in Patent Court decision (2018Heo1622)   Party B appealed the decision to the Supreme Court in May 2018. Supreme Court decision and comment On August 14, 2019, the Supreme Court decision was rendered, overturning the earlier ruling and remanding the case to the Patent Court for reconsideration. In its decision, the Supreme Court affirmed that when judging similarity in a scope confirmation trial, if there is actual use on the goods it is proper to give general and broad consideration to matters relevant to commerce (such as the degree to which a mark is well-known and its relation to the goods, as well as consumer recognition), but ruled that the Patent Court had erred in giving excessive weight to features which are commonly subject to change in commerce — in this case specifically, the detailed shape or form of the goods and their packaging — overlooking the differences in appearance and designation. The decision reinforces the relatively limited scope of comparison permitted in scope confirmation trials, stating that the Patent Court went too far in its comparison of specific characteristics of the actual goods and their packaging. A revised Patent Court decision reflecting the Supreme Court ruling can now be expected in due course. Author Recent Posts Hyun-Sook CHA Latest posts by Hyun-Sook CHA (see all) Author Recent Posts Jonathan MASTERS Latest posts by Jonathan MASTERS (see all)

2019-09-27
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Practice Notes

Renewal of jointly-owned trademarks will soon be less cumbersome in Korea

An amendment to the Trademark Act, effective from October 24, 2019, will remove the current stipulation that all owners of a jointly-owned trademark registration must apply for renewal together. Going forward, it will be sufficient if any one of the owners applies to renew the mark. The Korean IP Office (“KIPO”) has stated that the rationale for the change is to avoid situations where renewal is not possible despite a mark being used by one owner who cannot contact the other owner(s) for various legitimate reasons, as well as more malicious circumstances such as one owner refusing to agree to renewal of the jointly-owned mark in order to secretly apply for an identical trademark application alone. According to KIPO, of 179 jointly-owned trademarks for which renewal was refused in the three-year period prior to April 2019, some 43 instances (23%) were due to the renewal application not being made by all joint owners. Following the amendment, this will mean that the Korean agent handling the renewal of a jointly-owned trademark on behalf of an international client will require a signed Power of Attorney from only one of the joint owners in order to proceed. It is worth mentioning that the new provision applies only to maintenance of the trademark right, and the permission of all joint owners will still be required for other actions such as the recordal of licenses/pledges, as well as any disposal (via assignment, etc.) of the trademark right. Author Recent Posts Jonathan MASTERS Latest posts by Jonathan MASTERS (see all)

2019-09-18
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Practice Notes

Korean customs strengthen provisions for tackling counterfeits

There have been a number of significant changes at the Korean Customs Service (“KCS”) in the last 12 months, with amendments to the Guidelines for Customs Clearance of International Mail Import and Guidelines for Protection of IP Rights in Customs Clearance of Imports and Exports respectively taking effect in November 2018 and January 2019. Below we provide an overview of the revisions most relevant to tackling the import of counterfeit goods, as well as the preliminary results recently shared by the KCS. Now more difficult for small-parcel counterfeits to fly under the radar Due to the increasing amount of counterfeit goods being moved through international mail — particularly items such as brand-name footwear, golfing goods, bags, toys etc. — KCS has implemented the following changes in line with the amended Guidelines for Customs Clearance of International Mail Import: Before Revision Small parcel counterfeits returned to consignor without further investigation and penalty. Sorting suspicious counterfeits from among small parcels totally dependent on the KCS’ information and discretion. After Revision Small parcel counterfeits destroyed, or returned to the consignor only after any IPR-infringing parts have been removed (difficult in practice, so destruction most likely). KCS may, at their discretion, investigate the consignee. IPR holders given the opportunity to appraise small parcels onsite. In practice, the initial sorting and classification of potential counterfeit items is handled by the KCS in conjunction with the Trade-related IPR Protection Association (“TIPA”). TIPA is a not-for-profit membership organization which was formed in 2006 under the authority of the KCS, and provides services for its members including, but not limited to, scheduling onsite visits and organizing training sessions for customs officials. Such activities can also be performed by a local agent in the case that a representative of the IPR holder itself is not available. The following chart shows the updated clearance procedure for international mail entering Korea: Recording IP rights with Korean customs Rights holders are recommended to record their IPRs with KCS in order to benefit from the strengthened provisions. Recordal is made via TIPA, and the information is shared with KCS for use in sorting/classifying mail. Along with the IPR data, brand enforcement guidelines and information can also be shared to assist customs officials in discerning genuine goods from counterfeits. Following the revisions to the Guidelines for Protection of IP Rights in Customs Clearance of Imports and Exports, IPR recordals are now valid for up to 10 years (dependent on the validity of the underlying IP right). This is a significant improvement over the previous 3-year term. For trademarks in particular, this makes customs recordal at the time of registration/renewal of the trademark right a more convenient option. How effective have the new measures been? According to KCS, beginning from when the new guidelines went into force on November 26, 2018 and until the end of June this year, approximately 20,000 items of IPR-infringing goods were located and seized from international mail entering Korea. Among this total, the majority — 98.9% — originated from China, followed by Hong Kong, Singapore, Cambodia, Thailand etc. By the end of September, KCS intends to have destroyed roughly half of this total. Brand owners also appear to be playing an active role in the new process, with KCS reporting that representatives from over 60 brands have made on-site inspections of goods suspected of infringing their IPRs since the changes were introduced. This strengthened focus on the protection of IPRs at the border is naturally good news for brand owners, and we expect that interest and participation will continue to grow given the strong early results reported by KCS. Author Recent Posts Hyun-Sook CHA Latest posts by Hyun-Sook CHA (see all) Author Recent Posts Jonathan MASTERS Latest posts by Jonathan MASTERS (see all)

2019-09-18
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