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The Korean National Assembly has passed a revision to the Unfair Competition Prevention Act to protect data. (News Letter No. 470)



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1. The Korean National Assembly has passed a revision to the Unfair Competition Prevention Act to protect data.

-Data industry development is expected, such as data transaction activation and data utilization promotion.

According to KIPO, some amendments to the ‘laws relating to unfair competition prevention and trade secret protection’ (hereinafter, referred to as the ‘Unfair Competition Prevention Act’) to establish an act of unfairly using data as an unfair competition act were passed in the assembly plenary session on November 11, 2021, to come into effect in April 2022.

The importance of data as the basis of the 4th industrial revolution era and the digital era has increased day by day. However, since the present legal basis to protect data is insufficient, there has been an opinion that quality data are not smoothly used or distributed and therefore necessity has arisen to regulate the protection of data.

Meanwhile, the government advanced a meeting among the parties, the government and the blue house and a hackathon meeting of the 4th industrial revolution committee. In the meeting, the relevant ministries, industries, legal circles, academia and non-governmental organizations attended to present various opinions and discuss issues.

Through the processes, the Ministry of Science and ICT regulated general principles of data protection in the ‘basic law of data industry promotion and data utilization promotion’ (hereinafter, referred to as the ‘data basic law’) and entrusted specific content and means of an act of unfairly using data to the Unfair Competition Prevention Act.

In the currently revised Unfair Competition Prevention Act, an act of unfairly using data is added as a type of an unfair competition act. In the future, the civil remedies, such as a request for prohibition, a claim for damages, etc. will be possible regarding an act of unfairly using data, and the KIPO’s administrative remedies, such as an administrative investigation, a recommendation for corrective action, will be possible.

Data to be specifically protected are limited to △ data for transaction with a specific target, △ data to be electronically managed, △ data having economic values with significant accumulation thereof and △ data subject to disclosure. The reasons to limit the data to be protected are that the regulation will be excessive if all data are to be protected and the use and distribution of data should be activated for the data industrial development and the benefits of the general public.

This revised Act will be effective from April 20, 2022, together with the data basic law. For the remailing period, specific standards for administrative investigations will be prepared and the relevant content will be distributed to companies, conference groups and people by using various media, etc.

2. KIPO tightly supports a small/medium company in the prevention of a patent dispute to a follow-up reaction thereto.

-KIPO announced a plan to strengthen support of small/medium company regarding a patent dispute.

▶Strengthening a preemptive prevention of a dispute by expanding an IP-R&D strategical support, alerting a risk of a dispute and early diagnosing a risk of a dispute, etc.
▶Expanding the support when a dispute occurs, by expanding the support of a dispute consulting cost from 100 million Korea Won to 200 million Korea Won, introducing the technology protection insurance, and introducing the support of an emergency management stabilization fund up to 10 billion Korea Won, etc.

Jointly with the relevant ministries, KIPO announced a plan to strengthen support for a small/medium company in a patent dispute in the 8th materials, parts and equipment competitiveness reinforcement committee.

While the risk of a patent dispute has increased as the global competition for technology hegemony has deepened, the importance of a response to a patent dispute, which a lot of time and expense are required, has been greater.

Especially, since most small and medium companies have small businesses, a plan is needed to strengthen the support for small and medium companies having patent disputes.

The currently announced plan will tightly support the prevention of a patent dispute of a small/medium company and responding to the patent dispute. The major content of this plan is as follows:

➊ Support for a company in preventing and preparing for a patent dispute is strengthened.

ㅇSupport of IP-R&D is expanded to prevent patent infringement from the technology development stage.

ㅇThe optimized technology protection strategies using a patent and a trade secret according to the characteristics of the technology are provided to companies.

ㅇAn ‘alert of a dispute risk’ in the technical area, where the dispute risk is high, is provided to an industry through a IP protection comprehensive portal (IP-NAVI), and from the next year, a customized ‘early diagnosis of a dispute risk’ is newly supported for small and medium companies in the materials, parts and equipment area.

➋ Support for a company having a patent dispute is expanded in post-responding to the dispute.

ㅇConsulting of patent dispute responding strategies is expanded from small and medium exportation companies to the entire small and medium companies (except for the case where the parties to a dispute are all small and medium companies), and the expense support limit is increased from 1 hundred million Korea Won to 2 hundred million Korea Won yearly and the support is available up to 3 years.

ㅇ To relieve a company’s burden relating to the patent dispute expense, supporting not only an IP deduction but also a technology protection policy insurance and a management stabilization fund (loan up to 10 billion Korea Won) of the Ministry of SMEs (small and medium-sized enterprises) and Startups will be newly introduced.

ㅇA dispute response support connecting 25 local IP centers nationwide and an IP dispute response center is strengthened, and the number of places to install an overseas IP-DESK will be continuously expanded.

➌ Infrastructure is expanded to strengthen a small/medium company’s capacity to respond to a dispute.

ㅇThrough the IP dispute response center, a diversity of information regarding the government support program on a patent dispute, home and abroad agencies specialized in responding to a patent dispute and their services, etc., is provided, and providing the information of patent disputes of major countries is also expanded.

ㅇ By developing the education content to prevent and responding to a patent dispute, on/off line educations are provided to the industry-academia-research researchers. Also, education for CEOs is carried forward in cooperation with business groups such as Korea Small and Medium Business Association, Korea Venture Business Association, etc., to reenforce a small/medium company’s capacity to deal with a dispute.

ㅇ A private institution having the professionalism in responding to a patent dispute is newly designated and fostered as a ‘patent dispute consulting expert institute’, and support of the IP integrated services is expanded from a startup to a small/medium company, by using the company supporting vouchers of the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups and the KIPO.

3. A mediation linkage system and a timely submission system have been introduced to be operated in a patent trial (effective November 18, 2021)

The Korea Intellectual Property Trial and Appeal Board (IPTAB) announced the implementation of a mediation linkage system to terminate a trial through an agreement between the parties, and a timely filing system to intensively file evidence and argument at an early stage of a trial, from November 18, 2021.

When a chief judge determines that it is favorable to early settle a dispute through mediation rather than a trial, the chief judge is able to propose a mediation referral to the both parties. In the case that the two agree, the chief judge decides to refer to a mediation committee.

Although the parties are able to propose a chief judge a mediation through a written opinion upon filing a request for a trial or during the trial process if need, the chief judge finally decides whether refer to a mediation.

The trial stops until the mediation procedures are completed, and when the mediation between the parties is established, the result such as reconciliation at a court is taken and thus the trial is withdrawn.

The revised system is applied to a trial case pending as of November 18, 2021.

As the timely filing system to prevent a deliberate delay of a trial and to rapidly progress the trial has been introduced, the parties are unable to file an argument or request evidence after a due date determined by a chief trial.

In the case of violating the timely filing system, a chief judge is able to dismiss, ex officio or at one party’s request, the other party’s argument or evidence so as not to be reflected in trial.

When it needs to check whether the evidence or argument submitted by the parties is a fact, a chief judge is also able to request for call by giving a period. If the parties disobey, without any special reasons, the evidence or argument may not be reflected in a trial.

But, the timely filing system is applied to the case where the parties submit evidence, etc., late, on purpose or gross negligence, to delay the trial. Whether the evidence or argument is submitted timely is separately judged according to a trial progress situation.

The trial and mediation linkage system and the timely filing system are to more rapidly and accurately settle a dispute in a trial stage.

When these systems are implemented, a trial case is promptly and accurately terminated and therefore these systems are expected to contribute to the settlement of a dispute of an individual or a small/medium company lacking time and financial power.

4. An upheaval in the autonomous driving car developer.

The recent automobile industry is in the process of transformation from a simple transportation to a ‘mobility platform’. Specifically, an autonomous driving car is expected to be a game changer in the market, and regarding the development of such an autonomous driving car, a great change has occurred in the relevant industry.

According to KIPO’s patent analysis results of the autonomous driving technology, the manufacturer of a finished car, the IT company and the autonomous driving component company have had a three-way race to take the lead in the autonomous driving technology patent area.

Specifically, while the autonomous driving car market has rapidly grown and the global IT companies have newly entered, the manufactures of existing finsihed cars have competed to secure the lead of the market.

Thereby, patent applications have been actively filed by the manufacturers of existing finished cars (Toyota, GM, Hyundai, etc.), the IT companies (Waymo which is a subsidiary in the Google autonomous driving sector, Apple, Baidu, LG, Tesla, etc.) and the autonomous dirving component companies (semiconductor or Lidar manufacturers, such as NVIDIA, Velodyne, Mobileye, etc.).

The manufacturers of the existing finished cars have started to secure patents relating to an autonomous car based on the already constructed manufacturing base along with the IT companies based on their own powerful points, such as search, smart phone, appliance, navigation, etc., and the component companies based on the technology power on the core parts.

As the survey results of the autonomous driving car-related patent application trends in IP5, a total of 4,294 patent applications were filed in IT5 countries by the leading companies (17 companies) by groups of the manufacturers of the finished cars, the IT companies and the component companies.

Among a total of 24,294 applications, the most applications, 13,280 (55%) were filed by the manufactures of the finished cars, followed by 5,765 (24%) by the IT companies and 21% by the component companies.

In view of the main techniques of autonomous driving cars, the manufacturers of the finished cars were strong in the recognition (5,630 cases) and control (5,423 cases) areas, and the IT companies and the component companies filed relatively many patent applications in the recognition technical area (the IT companies; 3,704 cases and the component companies: 4,663 cases)

Since the IT companies and the component companies recently have increased the number of patent applications more than the manufacturers of the finished cars, they are expected to take the lead in the future patent initiative competition.

The companies’ ranking in the number of the relevant applications is ❶ Toyota (5,239), ❷ Sony (3,630), ❸Hyundai (3,080), ❹Honda (2,844), ❺ Ford (2,069), ❻LG (2,019), showing that Korean companies, Hyundai and LG, took 3rd and 6th places, respectively.

In ranking the number of the applications, the IT companies including Sony (2nd place with 3,630), LG (6th place with 2,019) and Google (8th place with 1,727) stood out, so that these companies are considered to positively start the development of the autonomous driving technology.

Among the Korean companies, Hyundai showing the strength as a traditional manufacturer of a finished car(s) and LG showing the strength as the IT company regarding the information and communication technology, etc. have been active in securing patents.

The number of the applications, 2,104, filed over the last 5 years (2016~2020) by Hyundai increased by 2.4 times compared to 893 filed for the previous 5 years (2011~2015); whereas the number of the applications,1,691, filed over the last 5 years (2016~2020) by LG increased by 6.7 times compared to 252 filed for the previous 5 years (2011~2015) showing that LG filed the applications more actively.

5. The development of customized products using the 3D printing technology has increased.

- The number of patent applications relating to products applying the 3D printing technology rapidly increased by an annual average of 40%.

According to KIPO, the number of Korean patent applications related to the 3D printing application products rapidly increased from 47 in 2013 to 254 in 2018 with an annual average of 40%.

In view of the detailed application fields, the most applications, 458 (42.0%) were filed in the machine parts field, followed by 247 (22.6%) in the medical field, 95 (8.7%) in the electrical and electronic fields,93 (8.5%) in the consumer goods field, 82 (7.5%) in the automobile field, 47 (4.3%) in the aerospace field, 29 (2.7%) in the construction field, and 24 (2.2%) in the food field.

Notably, the number of the applications has noticeably increased in the medical and food fields.

In the medical field, the applications were mainly filed for the technology of manufacturing a customized medical device, such as a surgical model or a surgical guide, an implant for human implantation or a transparent brace, by using the 3D printing technology.

In the food field, the applications were mainly filed for the technology of cooking a customized food, such as chocolate, pizza, etc., by using a food 3D printing device.

By the nationality of an applicant, 457 applications (42%) were filed by Korean applicants, which was less than 634 (58%) by foreign applicants. The number of the applications filed by foreign applicants increased from 38 in 2013 to 130 2018, with an annual average of 28%; whereas the number of the applications filed by Korean applicants increased from 9 in 2013 to 124 in 2018, with an annual average of 69%, showing that the number of the applications filed by Korean applicants has rapidly increased.

By Korean applicants, 144 applications (32%) were filed by small and medium companies, 119 (26%) by universities, 92 (20%) by institutes, 70 (15%) by individuals and 32 (7%) by big companies.

78% of the total of the applications related to the 3D printing application products filed by Korean applicants were filed by small and medium companies, universities and institutes, indicating that the 3D printing application technology development has been actively performed around Korean small and medium companies, universities and institutes.

In view of the companies which filed the most applications related to the 3D printing application products, 36 applications were filed by Korea Institute of Industrial Technology and 13 by Korea Institute of Machinery & Materials as Korean applicants; whereas 25 by HP, 22 by Nike, 20 by Stratasys, 17 by Boeing, 13 by Siemens and 13 by GE, which are multinational companies as foreign applicants.  


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