The Korea Fair Trade Commission (the “KFTC”) released the final amended Guidelines for Review of Unfair Trade Practices (the “Amended Guidelines”) on December 30, 2024. The Amended Guidelines (i) include the “act of filing a patent lawsuit without reasonable ground and using such filing to solicit customers of competitors to trade” as an example of “unfair solicitation of customers,” a type of unfair trade practice, and (ii) expressly state that such an abuse of patent rights may violate the Monopoly Regulation and Fair Trade Act (the “MRFTA”).

The KFTC has stated that the objective of this amendment is to clarify that the use of patent rights to hinder competitors’ market entry and interfere with their business activities by soliciting their customers may constitute a violation of the MRFTA, and has reflected related precedent rulings and final court judgments in the Amended Guidelines.

The Amended Guidelines provide specific examples of acts of “unfair solicitation of customers,” such as “filing a patent lawsuit against a competitor without reasonable grounds by abusing patent rights, including (i) filing a patent lawsuit against a competitor knowing that the competitor did not infringe the patent, or (ii) filing a patent lawsuit against a competitor after obtaining a patent based on fraudulent data and using such a lawsuit to interfere with the competitor’s business activities to solicit its customers to transact with [the patentee]” (Section V.4.C.(3)(c) of the Amended Guidelines).

These acts were included in the Amended Guidelines to reflect a recent KFTC decision that was upheld by the Supreme Court. In March 2021, the KFTC ruled in one case that a pharmaceutical company (the “Patentee”) had committed an act of “unfair customer solicitation” constituting “unfair trade practices” by filing a patent lawsuit against its competitors, even though (i) the Patentee was aware that the competitors had not infringed the patents at issue, and (ii) the patents had been granted by deceptive means, such as data manipulation. In that case, the KFTC issued a corrective order and imposed an administrative fine on the Patentee, and filed a criminal referral against the Patentee. The decision was upheld by the Supreme Court and reflected in the Amended Guidelines.

Now that the Amended Guidelines have come into force, patent holders should take greater care when filing a patent lawsuit before publicizing or referring to the lawsuit in any way in the course of business activities, as such conduct may now involve greater risk of violating the MRFTA. The entry into force of the Guidelines may also make it more likely that defendants in patent lawsuits will raise MRFTA-related defenses when responding to patent infringement actions in Korea.

When soliciting competitors’ customers, it becomes particularly important to ensure there is a good faith basis for any infringement lawsuit as well as for any submissions during patent prosecution before referencing the infringement lawsuit in connection with such solicitation.

[Korean Version]