Supreme Court clarifies the exclusive jurisdiction of the IP High Court in hearing IP-related civil cases (Ruling 2024Da228906 | October 31, 2024)
Introduction
Civil cases concerning IP rights including patent rights, utility model rights, design rights, trademark rights, and plant variety protection rights fall under exclusive jurisdiction of specific courts. The first trial is under the exclusive jurisdiction of the Seoul Central District Court, Suwon District Court, Daejeon District Court, Daegu District Court, Busan District Court, or Gwangju District Court, while the second trial falls under the exclusive jurisdiction of the IP High Court.
In this regard, the question arises as to what cases are encompassed within “civil cases concerning IP rights”.
Supreme Court ruling 2024Da228906 (October 31, 2024)
According to the Supreme Court, the reason for stipulating a separate rule on jurisdiction for cases concerning IP rights is that, generally, the hearing and judgment of disputes concerning such rights require specialized knowledge and an understanding of relevant technology; concentrating these cases in specialized courts contributes to the appropriate protection of IP rights.
Last year, in ruling 2023Da277260 (December 28, 2023) pertaining to a damages claim, the Supreme Court confirmed that, even when the first trial is judged by a single judge of a district court (including small claims cases), the appeal still falls under the exclusive jurisdiction of the IP High Court.
This latest Supreme Court ruling we are discussing (2024Da228906 | October 31, 2024) pertains to a case on liquidated damages. Specifically, the plaintiff, Defendant 1, and Defendant 2 entered into a settlement agreement to resolve a patent-related dispute and concluded the dispute by withdrawing ongoing invalidation trials or lawsuits. Later, the plaintiff filed a main action seeking payment of liquidated damages, claiming the defendants breached the agreement, while Defendant 1 filed a counterclaim, asserting that the plaintiff breached the agreement and also sought payment of liquidated damages. The first trial decision was rendered by a single judge of the district court, and the second trial decision was rendered by the district court’s panel division.
In this regard, the Supreme Court held that the main and counterclaims in this case involve issues requiring an understanding of specialized knowledge or technology related to IP rights. Therefore, these claims fall within the scope of IP cases, and the second trial falls under the exclusive jurisdiction of the IP High Court. Consequently, the Supreme Court overturned the appellate court decision and transferred the case to the IP High Court.
The Supreme Court particularly ruled as follows on the issue of whether an understanding of specialized knowledge or technology related to IP rights is necessary:
Regarding the main action, it is necessary to examine and judge whether specific acts of the defendants fall under prohibited acts specified in the settlement agreement. This requires a comprehensive review of the details and outcomes of the patent-related invalidation trial, trial decision cancellation lawsuit, and scope confirmation trial, as well as the identity between the technology for which the plaintiff applied and the plaintiff’s patented invention technology.
Regarding the counterclaim, it is necessary to examine and judge whether specific acts of the plaintiff fall under prohibited acts specified in the settlement agreement. This requires a comprehensive review of the details of the defendants’ patented invention technology and whether the plaintiff included false information regarding the defendants’ patented invention in an application for designation as a new construction technology.
Comment
This Supreme Court ruling is significant in clarifying that if the substantive nature of a dispute requires an understanding of specialized knowledge or technology related to IP rights, such cases are regarded as “civil cases concerning IP rights” and thus fall under the exclusive jurisdiction of the IP High Court.
