In 2018 there were major reforms to South Korean employment laws, including the Labour Standards Act. This resulted in many employers struggling to adjust employees' weekly working hours to comply with, for example, the new 52-hour limit. The legislative reforms and amendments proposed in 2018 will take effect in 2019. For example, a duty to prevent workplace harassment will be introduced, as will a uniform standard for termination notice exemptions.
The latest amendment to the Unfair Competition Prevention and Trade Secret Protection Act introduced a new provision prohibiting unfair competition in connection with 'idea theft' – the unfair use of the ideas of another that were acquired as part of a business negotiation or transaction. The purpose of the amendment is to provide additional protection for creative business ideas that may not be as easy to protect as typical forms of intellectual property, such as patents, copyright or trademarks.
The Korea Customs Service recently issued an announcement regarding proposed amendments to the Korea Customs Guidelines for Import and Export Customs Clearance Procedures for Intellectual Property Rights. Of note for brand owners is the fact that the customs recordation term is set to increase from three years to 10 years. Further, the process for recording patent and design rights will be simplified and the bond for small importers and exporters that challenge detainments of goods will be reduced.
Under the amendment to the Court Organisation Act, certain courts handling IP cases have been given authority to establish international panels of judges to review cases in languages other than Korean as a way of making South Korea a more attractive venue for foreign litigants to bring IP litigation cases. To provide further details on the implementation of the amendment, the Supreme Court promulgated its Rules on the Establishment and Operation of International Panels, which are now in effect.
According to data recently published by the Korean Intellectual Property Office, the number of non-use cancellation actions filed in South Korea has significantly increased in recent years, resulting in nearly double the number of registrations being cancelled in 2017 compared with previous years. As such, trademark owners with portfolios which include marks not currently active in South Korea should seek legal advice to determine the most effective strategy for protecting their trademark rights.
The Supreme Court recently ruled en banc that the AMERICAN UNIVERSITY trademark was sufficiently distinctive among South Korean consumers to be registered in connection with university education services, instruction services and other designated services. The court's reasoning is notable because it appears to hold that consumer awareness evidence can be used to prove the inherent distinctiveness of a mark in South Korea.
In a recent case, the Supreme Court appears to have essentially broadened the doctrine of equivalents to emphasise that structures in an accused product that are very different from claimed elements can still be 'equivalent', provided that the differences are conventional and the basic purpose of the invention is still achieved. The patent at issue related to a device for lifting a 'gang form' – a type of external scaffolding used in construction.
South Korea recently overhauled its employment laws. Some of the most significant changes that may have an impact on business operations concern annual paid leave entitlements and fertility treatment leave, eligibility for childcare leave, protection for workplace sexual harassment victims, mandatory disability awareness training and the scope of the anti-discrimination statutes.
An important amendment to the Unfair Competition Prevention and Trade Secret Protection Act will come into effect in July 2018. This amendment specifies the protection to be given to trade dress belonging to service providers in South Korea and introduces a new type of prohibited unfair competitive activity.
Numerous generics have filed challenges to the validity of patent term extensions in South Korea in the past few years, raising various issues of first impression. In November 2017 the Supreme Court rejected two of the major validity issues raised by the generics. Since then, the Patent Court and Intellectual Property Trial and Appeal Board have addressed various other legal issues.
The Seoul High Court recently ruled that an employee's repeated personal use of his or her corporate card, in and of itself, may not always constitute sufficient just cause for termination. The court's ruling is an adverse precedent that may have an impact on many businesses as they consider whether to terminate an employee for personal use of corporate cards. However, this case is now pending before the Supreme Court.
In recognition of the hardship faced by emotional labour workers, there have been increasingly audible calls to improve their working environment, which has led to a view that employers must take proactive steps to protect the health and wellbeing of such employees. Although legislative changes have been insubstantial, the National Assembly of Korea recently passed legislative amendments to the Occupational Safety and Health Act which seek to protect emotional labour workers.
The 2018 PyeongChang Olympic and Paralympic Winter Games Act, which aims to prohibit the unauthorised use of Olympic Games-related symbols, logos and slogans, did not initially address the issue of ambush marketing, leading to some uncertainty as to whether ambush marketing activities might be tolerated. However, the government has now indicated its intention to regulate such activities by amending the act to add specific provisions on ambush marketing.
The National Assembly recently passed a legislative amendment designed to reform the Labour Standards Act. The new legislation is projected to have a significant impact on all industries and levels. According to a study by the Korea Economic Research Institute, the additional annual labour costs that companies will incur is likely to exceed W12 trillion ($11 billion) in total.
The Supreme Court recently issued decisions recognising the inventiveness of two Novartis patents for a compound and a transdermal composition. The decision regarding the compound patent was noteworthy not only because this was the second time that the Supreme Court has recognised the inventiveness of a selection invention in South Korea, but also because both lower tribunals had specifically rejected the inventiveness of the selection invention compound.
Amendments to the Unfair Competition Prevention and Trade Secret Protection Act have expanded the South Korean Intellectual Property Office's (KIPO's) enforcement authority to include dead copy violations. The KIPO recently exercised its new powers for the first time, ordering that Mother Love Inc cease the manufacture and sales of its home meal replacement product. The amendments should benefit small companies which lack sufficient resources to seek effective legal remedies.
One of the first lines of defence in preventing the spread of counterfeit and imitation goods is to stop such goods from entering a country at the borders. Accordingly, IP rights owners should always consider using customs' services as a part of their enforcement programmes in South Korea. In particular, IP rights owners should actively assist Customs in seizure cases and conduct training sessions for customs officers to educate them about their brands.
Substantial efforts are being made by the South Korean government to turn the country into a regional Asian IP hub. The most recent effort involves creating the International IP Hub Court – a specialised court panel within the Patent Court which will decide patent-related appeals in English. To further encourage foreign IP owners to use the Patent Court as a hub for international IP disputes, the government is considering fully implementing the International IP Hub Court.
Pfizer has successfully enforced its patent covering a secondary use of its Lyrica product against 13 generic drug manufacturers in South Korea, and was awarded approximately KRW2.2 billion in damages. The court held that the patent was valid and found infringement on the part of the generic manufacturers. This is the first decision in South Korea in which a court has awarded damages for infringement by generic drug manufacturers of a second medical use patent.
The Korean Fair Trade Commission (KFTC) recently conducted another IP survey of approximately 70 pharmaceutical companies, seeking detailed information regarding their major products, patents and litigation disputes involving intellectual property in South Korea. While this survey is limited to pharmaceutical companies, the KFTC may decide to investigate and issue surveys in other industries in order to determine whether IP abuse is occurring in those areas as well.