Exercise of Standard-Related Patents and Application of Korean Competition Law -- With a Focus on Critical Review on the IPR Guidelines

Abstract

The purpose and main scope of this paper is to focus on the types of specific conducts with potential issues, the standards for them, and the applicable factors to be considered that were provided with respect to the exercise of patent rights in relation to technical standards in the Guidelines on the Abuse of Intellectual Property Right (“IPR Guidelines”) amended by the Korea Fair Trade Commission on March 2010, critically review the methods to identify the types of such conducts and relevance of such proposed standards, and propose alternatives thereto. As related problems, this research also reviews problems with the general principles of examination relating especially to the subjective requirements, conduct beyond scope of legitimate exercise of patent rights and limitations on the Monopoly Regulation and Fair Trade Act (“MRFTA”)'s intervention, and judicial remedy under the civil law with unreasonable exercise of standard-related patents. This paper concludes with suggestions as follows: Firstly, with respect to the exercise of standard-related patents, the IPR Guidelines lists specific types of conducts that cannot satisfy the requirements of the conducts regulated by the MRFTA and further regards these types of conduct as the conducts that will potentially hinder fair competition in the relevant market; therefore, there is a risk of excessive enforcement of the law. Secondly, in order to regulate non-disclosure of related patent technology under the MRFTA, the IPR Guidelines needs to specifically provide that both the intent of the non-disclosure and effect of the non-disclosure on the standard setting process are required. Thirdly, provision on conduct of imposing unreasonable royalties under the IPR Guidelines should be deleted to prevent excessive and baseless enforcement. In case of the discrimination in licensing terms, the IPR Guidelines should also be deleted in that it plays no role in specifying detailed types of unfair discrimination under the MRFTA. Fourthly, whether procedures of the disclosure of the patent information and the ex ante negotiation for licensing terms have been complied with, which are provided as important factors to be considered to judge illegality, does not bear causation or close relationship with the violation of the MRFTA and failure to comply with such procedures should not be considered more seriously than other factors. Lastly, for illegal exercise of the standard-related patents which neither has nor is likely to have any anti-competitive effect, it is reasonable to develop and apply the remedy under the civil or patent law accommodating patent misuse theory.