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Discovery system is expected to be introduced in South Korea

March 18, 2020 / Blog, Case Comment, Korean, Patent
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As of December 13th 2019, a high-ranking official of the Korean Intellectual Property Office (hereafter KIPO) argued that the Discovery System should be introduced in South Korea in the field of patent and trade secret infringement in a meeting of the Intellectual Property Strategy Council. The discovery system is to allow the exchange of evidence between infringers and right holders in respect to IP (Intellectual Property) infringement litigations, which has already been implemented in the United States, Japan, the United Kingdom and Germany. In this regard, the KIPO is seeking to introduce a specialized discovery system, exclusively in the framework of patents and trade secrets. Under the current system, the right owners have to file a litigation and submit the relevant evidence in the patent and trade secret infringement case. As a result, it is very difficult for IP holders to receive damage compensation even if their rights are violated, which is the primary reason for domestic companies to file a lawsuit abroad in order to protect their rights.

The KIPO is now actively involved in the introduction of the Korean discovery system in response to the perception of an impending crisis in South Korean courts as the country is being left out from international IP disputes. Since the amendment of the Court Organization Act on 13 June 2018, only one case bringing a foreign argument was filed in a patent court for a domestic lawsuit after a foreign language argument was granted in an Intellectual Property Right (hereafter IPR) trial. Even if arguments in English become available and the judgement is speedy and fair in Korean courts, the Korean government’s goal to become a hub for IPR dispute resolution cannot be achieved without the discovery system. In fact, there is currently a system for filing a document submission order in South Korea, but it is not very effective in practice. This is because the other party does not get any significant penalties imposed, even if a party bearing a burden of proof has filed an application for filing the order against him.

The Korean Patent Act has a system that resembles the discovery system. According to the paragraph (1) of Article 132 (Submission of Materials) revised on  29 March 2016, “Upon receipt of a request from either party to legal proceedings on infringement of a patent or exclusive license, the court may order the other party to submit materials necessary for proving the relevant infringement or calculating the amount of losses caused by the relevant infringement: Provided, That the foregoing shall not apply where the person possessing the materials has a reasonable ground to refuse to submit them.” The paragraph (4) and (5) further state that, “where a party fails to follow the order to submit materials without any reasonable grounds, the court may deem that the claim of the other party on the record of materials is true” and “In cases of falling under paragraph (4), when a party who filed a petition for the submission of materials has a situation where it is extremely impracticable to make a detailed assertion on the records of materials and it is also difficult to expect that the fact to be proved by the materials may be proved by any other evidence, the court may deem that the assertion of the party on the fact which he/she intends to prove by the records of the materials is true”. However, it was pointed out that this system was too insufficient compared to the original discovery system and it could not properly protect the patentees. This is because the court applied the above-mentioned provisions in a very conservative way.

To conclude, many steps are still needed in order to implement the discovery system in South Korea, one of which includes the total revision of the current legislation in a large scale. Even though the KIPO, many companies and legal communities are on the same page regarding the introduction of the system. These days, e-Discovery is also being actively adopted in international patent litigations beyond the traditional system. In order to respond quickly and appropriately to the spread of electronic evidence, the relevant discussions regarding the introduction of the domestic discovery system will be accelerated and the following changes will be made soon.

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