1. Use of a brand free of charge has possibilities of being regarded as an unfair act and being levied with a large amount of additional corporate taxes

 

The National Tax Service and the Fair Trade Commission are intensifying investigation into businesses and seriously examining whether the use of a brand free of charge could be deemed as an unfair act.  According to current law, a brand trademark right holder letting his affiliate, who does not have the trademark right, use his brand free of charge could be deemed as an unfair act, which could lead to a taxation bomb if the taxation authorities and competitions intensify investigation.

In the financial world, “the majority of companies excluding the holding companies let their affiliates use their brands free of charge.”  This can be regarded as an unfair act if the companies did not collect the brand royalties according to the current Fair Trade Act and Corporate Tax Act. 

 

 

2. 100 billion won to be raised for investment fund dedicated to intellectual property

 

The Financial Services Commission decided to raise a fund of 100 billion won to be invested only in intellectual property by the end of this year for activation of a creative economy.  Also a new guarantee system will be set up for intellectual property, and a new concept of royalties called “a royalty sales credit insurance system” will be introduced.  The government announced an intellectual property finance activation scheme for patent rights, utility model rights, design rights, trademark rights, copyright and information property rights to implement the creative economy.  The funds dedicated to investment in intellectual property rights will be operated in separation of 50 billion won each for a creative capital type and a venture capital type.

 

 

3. Big businesses’ usurpation of small-and-medium businesses’ technologies to be rooted out

 

The Fair Trade Commission and the Small and Medium Business Administration, Korean Intellectual Property Office and the National Police Agency mobilized task force to root out big businesses’ usurpation and lure-away of small-and-medium businesses’ technologies and manpower and will announce comprehensive measures at the end of this month.  The current Fair Trade Act enforcement ordinance defines technical manpower lure-away as “an act of impeding the business activity of another company to the extent of making it very difficult by unjustly luring and hiring the company’s manpower.” Big businesses frequently lure-away manpower adroitly in the form of open recruitment, so it is not easy for the target company to prove that the lure-away was unjust. 

Strongly suppressing lure-away of technical manpower started as part of economy democratization, but an analysis says it could help the venture business M&A market be activated on a long-term basis.

 

 

4. Korean businesses’ international patent disputes increased by more than twice this year

 

According to the Korean Intellectual Property Office, the number of international patent lawsuits between Korean businesses and foreign businesses was 210 for the first half of this year, an increase of 131% over the same period (91) of last year.  The number of international patent lawsuits faltered from 280 for 2011 to 224 for last year but is increasing again this year.

By the scale of business, the big business was 166 cases, small-and-medium business 42, and research institutes and individuals was 1 each.  The number of cases in which Korean companies were sued in patent disputes was much more than the case in which Korean companies sued foreign companies.  Of 1,235 cases of international patent lawsuits raised from 2008 to June this year, the number of cases in which Korean companies were sued was 1,015, which is almost five times the cases (220) in which Korean companies sued foreign companies.  By nationality, disputes with American companies were the most.

 

 

5. IP values to be converted into money to be made into DB

 

When the Technology Licensing Office (TLO) of Universities and Public Research Institutions transacts intellectual property rights such as patents, it is mandatory that the values be assessed by a technology assessment organization.  The results of IP value assessment and transaction prices will be accumulated in a database to develop a market price formation standard. Saying “a TLO does not carry out technology assessment for the technology to be transacted when it transacts a technology,” the Presidential Council on Intellectual Property clarified “it would revise the provision whereby a transaction should be made based a predetermined amount after the designated IP value assessment organization carries out evaluation and it would be accumulated in a database.  The law relating to promotion of industrial education and facilitation of industry-academia-research institute cooperation provides that a technology holding corporation in which the evaluation amount is invested by capital in kind through assessment of the technology owned by a university is set up so as to carry out business.

 

 

6. EU pushes for establishment of an integrated patent court

 

The Commission of the European Communities recently announced a patent court establishment bill which provides for the jurisdiction of the EU patent court and the effectiveness of decisions.  The European Parliament approved establishment of an integrated patent court already last year.  Accordingly, the establishment will go into effect when 13 countries of the 24 participating countries ratify it.

According to the plan of an integrated patent court, the headquarters of the court will be in Paris, France, and London, the U. K. will deal with the fields of life science, chemistry and agriculture, and Munich, Germany, will be in charge of fields such as engineering and resources.

With the establishment of the EU integrated patent court, it is expected that patent application expenses would be reduced by a great deal in Europe.  ‘Euractive’, a media dedicated to EU, said the expenses for registering a patent in Europe reaches about 60 times the expenses incurred in China.