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Newsletter | April 2015, Issue 1
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ANTITRUST & COMPETITION
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Korea Fair Trade Commission Amends IPR Guidelines, Effective December 24, 2014
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The Korea Fair Trade Commission ("KFTC") made significant amendments to its “Guidelines on the Unfair Exercise of Intellectual Property Rights” ("Amended IPR Guidelines" or "Guidelines") on December 17, 2014, effective as of December 24, 2014. The amendments reflect the areas of main interest to the KFTC, including (i) enforcement of Standard Essential Patents ("SEPs") and (ii) activities of Non-Practicing Entities ("NPEs") that may receive a closer scrutiny. The main changes include the following (regarding the major amendments in relation to enforcement of SEPs and NPE’s activities, please refer to the Intellectual Property section for major amendment in relation to enforcement of SEPs and activities of NPEs):
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The Amended IPR Guidelines make it clear that they purport to set out guidance for abuse of dominance and unfair collusion, but no longer provide guidance regarding unfair trade practices, which are separately set forth in the 'Unfair Trade Practice Guidelines.'
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Pursuant to the above change in position, the Amended IPR Guidelines make it clear that for purposes of the Guidelines, 'anti-competitiveness' is the sole applicable standard of illegality and no longer make reference to 'unfairness' or 'impeding fair trade,' which is the standard for unfair trade practices. Therefore, even when the Amended IPR Guidelines use the terms 'unfair' or 'unreasonable,' this is understood to refer to the 'anti-competitiveness' standard.
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The concept of 'innovation markets,' comprising R&D affected by the exercise of IPR and R&D for products, technology, or processes in actual or potential competition with IPR, has been newly introduced. Previously, the IPR Guidelines only referred to 'product markets' and 'technology markets.'
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A section on 'grantbacks' of improvements to licensed technology to the licensor has been included, as well as detailed standards for determining whether such grantbacks may constitute abuse.
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A new note on 'Package Licensing' that discusses the pro-competitive effects of package licensing has been included. The Guidelines raise the possibility that compelling the licensing of non-SEPs together with SEPs against the will of the licensee may constitute tie-in sales.
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The Amended IPR Guidelines show the KFTC's continued interest in enforcing competition law regarding unfair exercise of intellectual property rights and are expected to increase the predictability of the KFTC’s enforcement.
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