Patents and Utility Models

Where a patent or utility model is jointly developed, disputes often arise over the attribution of rights and the right to practice.

In particular, where the contract contains no clear provisions on the attribution of rights, or where the registration of the transfer of rights is omitted after joint development, this is more likely to lead later to an infringement of goodwill or a dispute over the right to practice.

To prevent such disputes, the attribution of rights, the distribution of revenue, and whether a right to practice is to be established should be specifically set out at the stage of the joint development contract, and a memorandum of agreement should be prepared before the application in order to fix a clear rights structure.

It is advisable to complete the registration of the transfer of rights without omission after the joint development as well, and to conclude a separate practice agreement between the rights holders.

An employee invention is a rights issue that arises when technology invented by an employee in the course of duties leads to a patent application by the company.

In this case, the employee has the right to claim reasonable compensation as the inventor, and the company may request the transfer of the employee's rights.

Non-payment of compensation, disputes over the attribution of rights, and the issue of waiver of rights can pose significant risks to corporate management.

To resolve these issues, it is necessary to specify the compensation rules for employee inventions in the company's internal regulations or in the employment contract, and to establish the standards for compensation and the payment procedure in advance.

In addition, it can be effective to make invention reports and rights transfer agreements mandatory in order to clarify the attribution of rights, and to forestall the possibility of legal disputes through the payment of compensation.

Patent infringement is established where technology that falls within the scope of the rights is practiced as a business without the permission of the rights holder.

Acts relating to products and methods, including manufacturing, sale, transfer, importation, and use, may all constitute infringement, and a utility model right is protected in the same manner.

Because the assessment of technical similarity is made according to the principles of literal infringement and infringement under the doctrine of equivalents, it is advisable to have the possibility of any anticipated infringement reviewed by a patent specialist attorney or a patent attorney.

In addition, it is advisable to block the possibility of infringing rights through a review of the scope of rights before launching a product, and, where there is concern about infringing another person's rights, to minimize the risk of disputes by securing a practice agreement or license.

After a patent application is filed, the Korean Intellectual Property Office publishes the content of the application in the patent gazette.

At this point, as the content of the technology under application is disclosed externally, a competitor's design-around, development of imitation products, or theft of technology may occur.

In particular, where an application is rejected or abandoned while still unregistered, the technology is disclosed to the public and the rights cease to exist, which acts as a critical business risk.

Therefore, for important core technology, whether to prepare for commercialization and acquire rights should be decided promptly before disclosure.

Even after a patent is registered, attempts by interested parties to eliminate the right itself by filing an invalidation trial are frequent.

In particular, where prior art exists or the inventive step is insufficient, there is a possibility that the right may be cancelled even after registration.

In addition, the other party may employ a strategy of filing a negative scope confirmation trial to obtain a confirmation that ‘the relevant product does not infringe the patent right’ and thereby neutralize the dispute.

As a way to address this, it is necessary to conduct a sufficient prior art search before the patent application, and, after registration, to review the scope of rights of the registered patent and carry out a procedure to appropriately narrow or correct the scope of rights.

Where a trial is initiated, it should be actively responded to by promptly submitting a written opinion, obtaining an expert appraisal, and securing evidence proving infringement.

A person who infringes a patent right or an exclusive license may, under Article 225 of the Patent Act, be subject to imprisonment for up to seven years or a fine of up to 100 million won.

If the entity that committed the infringing act is a corporation, a fine of up to 300 million won may also be imposed on the corporation, separately from the punishment of the actor.

Because this is a matter that can frequently arise in an actual business environment, such as technology leakage, unauthorized practice, and the production of imitation products, particular caution is required.

In addition, this offense of patent infringement is a crime not punishable against the victim's will, so it cannot be punished if the victim expresses an intention that they do not wish for punishment.

When an infringement of a patent or utility model occurs, a strategy of first securing evidence of the infringement and taking measures to block distribution through an application for a provisional injunction prohibiting the infringement, and then pursuing a criminal complaint and a civil claim for damages together, can be effective.

A settlement with the infringer is also necessary in order to prevent the dispute from becoming prolonged and to recover the loss, and when developing technology with a potential for infringement, the establishment of a legal system that makes patent analysis and a review of the possibility of practice mandatory in advance is required.

If you are a company that handles patents and utility models, it is recommended to seek the legal advice of a corporate attorney.

▶Key Defense Points for Patents and Utility Models