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IP Newsletter | Winter 2016/17
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PATENT
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KFTC Establishes New Division Responsible for IP Abuse in the ICT, Pharmaceutical and Biotechnology Sectors
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The Korea Fair Trade Commission ("KFTC") has long been regarded as one of the most active competition authorities in the world on issues involving the interface between competition law and intellectual property rights, and in its enforcement activities in high-tech industries. On December 7, 2016, the KFTC took a significant step in further advancing its enforcement agenda in these areas by announcing the creation of a new "Knowledge Industry Anti-Monopoly Division" (the "Division"), to be composed of five or more officials. The KFTC announced that the establishment of the Division would allow the KFTC to more effectively enforce the fair trade and competition laws and promote competition in knowledge-based industries, such as the Information & Communication Technology ("ICT"), pharmaceutical, and biotechnology sectors.
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The establishment of the Division expands the number of divisions within the Anti-Monopoly Bureau, which is responsible for monitoring and enforcing the law against abuse of market dominance, unfair trade practice and internal dealing, from three divisions to four. The Division is tasked with investigating abuse of market dominance and unfair trade practice in knowledge-based industries and with competition policy-related responsibilities in relation to intellectual property rights.
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According to the KFTC, the Division is established to continue and expand the role of the KFTC's ICT Task Force, which had been in operation since February 2015, in the form of a permanent organization with greater investigation resources, for the following reasons:
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KFTC regards knowledge-based industries, such as the ICT, pharmaceutical, and biotechnology industries, as particularly susceptible to monopoly/oligopoly concerns because of first-mover advantages and requirements for systemic monitoring and timely enforcement due to the dynamic nature of the industry; and
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dedicated organization and personnel were regarded as necessary due to the high level of expertise and know-how required to investigate abusive conduct in those industries.
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The KFTC stated that major responsibilities for the Division will include, among others:
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monitoring of abuse of standard essential patents ("SEPs") in the ICT industry, such as patent ambush and claims for injunctive relief in violation of FRAND commitments;
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monitoring of unfair competition and reviewing potential harms to consumer welfare based on pharmaceutical patents, such as "pay for delay" agreements between original and generic pharmaceutical companies;
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monitoring of monopolistic conduct in aftermarkets utilizing intellectual property rights, such as patents and design rights; and
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ongoing monitoring of potential anti-competitive conduct in developing industries, such as the Internet of things, big data, and biotechnology.
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In addition to investigations against specific violations, the KFTC may institute broad "sector-surveys," similar to the KFTC's IPR abuse surveys conducted in 2010 and 2011 in the pharmaceutical, ICT, chemical and machinery industries. We also anticipate that the Division will be paying close attention to the enforcement activities and legal developments in other jurisdictions. We will continue to closely monitor and update you if there are additional developments.
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If you have any questions regarding this article, please contact:
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For more information, please visit our website: www.ip.kimchang.com
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