IP Newsletter | Summer/Fall 2014
	PATENT
	Utility Models May Warrant a Second Look
	Compared to patents, utility models are often given less attention, as they only protect the shape or structure of an article and have a much shorter duration—10 years of protection from the filing date (as opposed to 20 years for patents).1 However, utility models may be worth a second look, particularly for inventions with short lifespans or that may involve a relatively lower or incremental level of inventiveness. Under the Korean Utility Model Act, a utility model lacks inventiveness "if it could have been conceived by those skilled in the art 'very easily' in view of the prior art." In contrast, under the Korean Patent Act, a patent lacks inventiveness if it could have been conceived "easily" in view of the prior art. More specifically, the Korean Supreme Court held that a utility model can be inventive over the prior art if the utility model provides an incremental level of useful value over the prior art unlike the inventiveness of a patent which requires a "remarkable" effect accruing from the claimed invention. (See Supreme Court Case No. 96Hu1637 rendered on July 8, 1997).2 Further, a look at the invalidation rate for patents and utility models reveals that the invalidation rate for utility models has historically been about 5-10% lower than for patents.
	Utility Models 2008 2009 2010 2011 2012 Total No. of Actions 179 121 99 121 87 No. of Invalidation 118 82 74 70 48 Invalidation Rate 65.9% 67.8% 74.7% 57.9% 55.2%
	Patents 2008 2009 2010 2011 2012 Total No. of Actions 530 472 509 583 621 No. of Invalidation 376 346 347 381 416 Invalidation Rate 70.9% 73.3% 68.2% 65.4% 67%
	[Invalidation Rate of Utility Models and Patents in Recent Years]3
	While this may not appear to be statistically significant, it should be noted that, until October 1, 2006, no substantive review was required before a utility model could be registered.4 Thus, although utility models were required to be substantively reviewed before they could be asserted in an infringement action, it seems likely a higher proportion of utility model applications prosecuted before 2006 would have been of "lower" quality compared to regular patent applications, which should have resulted in a higher relative invalidity rate for utility models (all other things being equal). The fact that the rate has been significantly lower suggests that utility models are more difficult to invalidate in practice than patents (though of course caution is warranted given the relatively limited number of actions involving utility models). Additionally, the fees charged by the Korean Intellectual Property Office ("KIPO") related to filing, registering, and maintaining a utility model are less than half of those charged for a patent—for maintenance of a ten year term (8 years of annuities assuming 2 years of examination after filing), the fees would amount to about USD 1,200 for a utility model versus about USD 2,800 for a patent.5 Further, since some technologies may become obsolete in fewer than 10 years, it would not make sense to maintain a patent on such technologies for a full 20 year patent term (especially since the later years of the patent term are significantly more expensive to maintain). In sum, despite the shorter 10 year term,6 utility models may be worth a second look for inventions that (1) are likely to have a short lifespan or (2) apply to fields where most improvements are incremental and thus may have difficulty meeting the inventiveness standards for patents.
	1 Utility model protection is not available for methods, processes, and material inventions, including chemical products/processes or new medicinal use claims. 2 The Korean Examination Guidelines provided by KIPO does not provide specific details regarding how the lower "very easily" standard should be applied to utility models differently from the "easily" standard applied to patents. Thus, in practice, it may sometimes be challenging to persuade the Examiner to apply the proper standard of inventiveness. 3 The underlying data for these invalidation rates was obtained from KIPO's website at http://www.kipo.go.kr/kpo/. 4 Prior to October 1, 2006, utility models were typically registered within 4-6 months of filing the application, with only a basic review of formalities by KIPO. However, before a utility model owner could assert an action, the registered utility model had to undergo substantive review. After October 1, 2006, all statutory requirements for patentability (i.e., novelty, inventive step, sufficient support, etc.) are examined prior to registration, much like regular patents. 5 In a hypothetical comparison between a Korean utility model and a Korean patent, in which makes one priority claim and contains 10 claims (and without including the cost of any office actions issued during prosecution), the total official KIPO fees (filing fees, examination request fees, registration fees and annuities) charged after ten years from the filing date (assuming 2 years of examination and 8 years of annuities) would be about USD 1,175 for a utility model versus about USD 2,765 for a patent (based on the exchange rate as of July 31, 2014, which is USD 1 / KRW 1,020.60, and the official fees listed as of July 2014). 6 It is possible to make up for the shorter lifespan in part by requesting examination concurrently with the filing (as opposed to waiting out the full 3-year deferred examination period available for utility models).
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	Yoon Ki KIM ykkim1@ip.kimchang.com John J. KIM jjhkim@ip.kimchang.com Tae Hyun KIM thkim2@ip.kimchang.com
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