Heesob's IP Blog

Facts and Figures on Copyright Three-Strike Rule in Korea

2010-10-24T15:20:00.004+01:00

Notice: I think I have to clarify that the thirty-one individuals mentioned below were not suspended without any prior notice from the Copyright Commission.

Some articles referring to my blog indicated they were. For instance, here and here.

When I said no prior notice for the Commission’s recommendation, I meant to put an emphasis on the difference in the statutory requirement between the track by the Minister’s order and one by the Commission’s recommendation.

Currently, the Korea Copyright Commission has its own bylaw which imposes at least three times prior notice upon the recommendation of suspension. The thirty-one individuals had been suspended according to this bylaw. However, the Commission is free to amend the bylaw and switch to one-strike system.

1. Two Tracks to Implement the Three-Strike Rule

A. Suspension of a User Account or Shutting-Down of a Web Site by an Order of the Minister

Under Article 133bis of the Korea Copyright Act, the Minister of Culture, Sports and Tourism (“the Minister”) may, after deliberation by the Copyright Commission, order an ISP to take measures:

· To suspend for a period shorter than six months an account provided by the corresponding ISP for a user when the user has been warned at least three times by the Minister in connection with an unauthorized reproduction or transmission of the copyright infringing material (Para 2); or

· To shut down for a period shorter than six months a web site (“a bulletin board”) that has been ordered at least three times by the Minister to delete or block copyright infringing material (Para 4)

B. Suspension of a User Account by a Recommendation of the Commission

According to Article 133ter of the Copyright Act, the Copyright Commission has an authority to recommend an ISP to take corrective measures including:

· Issuing a warning against a reproducer/ transmitters of copyright infringing material (Para 1(i));

· Deletion or cessation of transmission of copyright infringing material (Para 1(ii)); and

· Suspension of an account provided by the corresponding ISP for a user when the user has repeatedly reproduced or transmitted copyright infringing material (Para 1(iii).

Unlike the suspension by the Minister’s order, a suspension by the Copyright Commission' recommendation can be made without requiring that the unauthorized reproduction or transmission takes place at least three times. Nor is required a prior notice. When the Copyright Commission determines the user’s unauthorized activity being repeated, the Commission may recommend the corresponding ISP to suspend the user’s account. In this regard, the suspension by the Commission’s recommendation is neither a three-strike rule nor a notice-suspension system. The Korean government also does not call this a three-strike rule. But the reason is quite different. It is not a three-strike rule because the suspension is a voluntary measure taken by an ISP (See page 7 of APAA Annual Report 2009 (Korea)).

2. How Many Individuals or Web Sites Have Been Suspended?

The legislation was passed on April 22, 2009 and came into force on July 24, 2009. By the end of July 2010, there has been no suspension against an individual user or a web site by the order of the Minister. However, the Copyright Commission has recommended ISPs to suspend accounts of copyright infringing users in thirty-one cases, and all of the individual users have been disconnected to the corresponding ISPs for less than one month.

Recommendations by the Copyright Committee (Source: Report of the Minister to the National Assembly, September 2010)
	Warning	Deletion or Blocking	Suspension of User Account	Total
July 2009	0	0	0	0
August 2009	0	0	0	0
September 2009	2,701	2,524	0	5,225
October 2009	3,750	3,650	0	7,400
November 2009	3,694	3,552	0	7,246
December 2009	2,275	2,248	0	4,523
January 2010	2,555	2,500	0	5,055
February 2010	2,518	2,444	0	4,962
March 2010	3,170	3,128	0	6,298
April 2010	3,520	3,505	8	7,033
May 2010	2,837	2,828	11	5,676
June 2010	3,387	3,383	0	6,770
July 2010	2,471	2,447	12	4,930
Total	32,878	32,209	31	65,118

Compliance by ISPs with the Commission’s Recommendations
Recommendations	Compliance	Non-Compliance (by only one ISP)
65,118	65,078	40 (Warning: 20 / Deletion or Blocking: 20)

3. How Many Materials Have Been Infringed by the Repeat Infringers?

In total, by the thirty-one individuals, 544 pieces of computer game software, 216 pieces of motion pictures, 113 pieces of cartoons and 23 pieces of TV shows have been transmitted through ten ISPs. Interestingly, no musical works were involved. On average, 22.67 pieces of computer games (24 users), 10.8 pieces of motion pictures (20 users), 22.6 pieces of cartoons (5 users), and 23 pieces of TV shows (one user) have led up to the temporary disconnection.

4. Potential Disconnection by the Minister’s Order or the Commission’s Recommendation

As of September 2010, additional twenty-six individuals are detected as repeat infringers by the Copyright Commission. Further, the Minister has, pursuant to Para 1(i), Article 133bis, ordered ISPs to issue warnings against the same individuals more than twice in twenty-one cases.

Order by the Minister
Date	Warnings	Deletion or Blocking	Suspension	Total
March 11, 2010	121	38	0	159
June 10, 2010	154	3	0	157
Total	275	41	0	316

Legal Texts (Official Translation by the South Korean Government)

1. The Copyright Act (Available at copyright.or.kr)

Article 133-2 (Order to Delete Illegal Copies through Information and Telecommunications Networks, Etc.)

(1) In the case where copies or information infringing on copyrights and other rights protected under this Act or programs or information circumventing technological protection measures (hereinafter referred to as "illegal copies, etc.") are interactively transmitted through information and telecommunications networks, the Minister of Culture, Sports and Tourism may order online service providers to take any of the following measures as prescribed by Presidential Decree after deliberation by the Commission:

1. Issuing warnings against reproducers/interactive transmitters of illegal copies, etc.; and

2. Deletion or suspension of interactive transmission of illegal copies, etc.

(2) If a reproducer/interactive transmitter who received three or more warnings as prescribed under Subparagraph 1 of Paragraph (1) of this Article interactively transmits illegal copies, etc., the Minister of Culture, Sports and Tourism may order online service providers to suspend the account [which refers to accounts on usage rights used by online service providers to identify and manage users (excluding email exclusive accounts) and includes other accounts provided by the corresponding online service providers] of the corresponding reproducer/interactive transmitter within a period of no more than six months as prescribed by Presidential Decree after deliberation by the Commission.

(3) An online service provider receiving an order as prescribed under Paragraph (2) shall notify the corresponding reproducer/interactive transmitter of the fact that the corresponding account will be suspended according to Presidential Decree before seven days from the date of suspending the account.

(4) If a bulletin board established on an information and telecommunications network of online service providers (which refers to a bulletin board that provides commercial interests or convenience of use among those under Subparagraph 9, Paragraph (1), Article 2 of the Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc.; hereinafter the same shall apply.) which received three or more orders as prescribed under Subparagraph 2 of Paragraph (1) of this Article and is considered to seriously damage sound use of works, etc. in light of the format of the corresponding bulletin board, the amount or nature of copies posted on it, etc., the Minister of Culture, Sports and Tourism may order online service providers to suspend all or part of the bulletin board service within a period of no more than six months as prescribed by Presidential Decree after deliberation by the Commission.

(5) An online service provider receiving an order as prescribed under Paragraph (4) shall post the fact that service of the corresponding bulletin board will be suspended according to Presidential Decree on the homepage of the corresponding online service provider and the corresponding bulletin board before ten days from the date of suspending the service.

(6) Within five days from receiving an order under Paragraph (1), within ten days from receiving an order under Paragraph (2), and within 15 days from receiving an order under Paragraph (4), online service providers shall notify the Minister of Culture, Sports and Tourism of the consequences of carrying out the order as prescribed by Presidential Decree.

(7) The Minister of Culture, Sports and Tourism shall give an opportunity to submit an opinion in advance to online service providers subject to the order under Paragraph (1), (2), or (4), reproducers/interactive transmitters with a direct relationship of interest with the order under Paragraph (2), and operators of bulletin boards under Paragraph (4). In this case, Paragraphs (4) to (6) of Article 22 and Article 27 of the Administrative Procedures Act shall apply mutatis mutandis to submission of opinions.

(8) The Minister of Culture, Sports and Tourism may establish and operate an organization necessary for the affairs under Paragraphs (1), (2) and (4).

[This Article added on April 22, 2009]

Article 133-3 (Correction Recommendation, Etc.) (1) When investigating the information and telecommunications networks of online service providers and learning that illegal copies, etc. are interactively transmitted, the Commission may deliberate on such and recommend the online service providers to take correction measures under any of the following:

1. Issuing warnings against reproducers/interactive transmitters of illegal copies, etc.;

2. Deletion or suspension of interactive transmission of illegal copies, etc.; and

3. Suspension of the accounts of reproducers/interactive transmitters which repeatedly interactively transmit illegal copies, etc.

(2) Within five days from receiving a recommendation under Paragraphs (1) and (2) of Article 1 and within ten days from receiving a recommendation under Paragraph (3) of Article 1, online service providers shall notify the Commission of the consequences of carrying out the recommendation.

(3) If online service providers fail to follow a recommendation under Paragraph (1), the Commission may request the Minister of Culture, Sports and Tourism to issue an order under Paragraphs (1) and (2) of Article 133-2.

(4) If the Minister of Culture, Sports and Tourism issues an order under Paragraphs (1) and (2) of Article 133-2 as prescribed under foregoing Paragraph (3), deliberation by the Commission is not required.

[This Article added on April 22, 2009]

2. Enforcement Decree of the Copyright Act (Presidential Decree No. 21676, August 6, 2009)

Article 72 (Procedures for and Methods of Deliberation of Orders, etc. for Deletion of Illegal Reproduction through Information and Communication Network)

If the Commission receives a request for deliberation from the Minister of Culture, Sports and Tourism (“the Minister”) pursuant to Article 133-2(1) of the Act, it shall deliberate within seven days from the date of request, and if it receives a request for deliberation from the Minister pursuant to paragraph (2) and (4) of the same Article, it shall deliberate within fourteen days from the date of request and submit the result thereof to the Minister without delay: Provided, That where it cannot deliberate within the period due to unavoidable reason, it may extend the period twice only [This Article wholly amended by Presidential Decree No. 21634, July 22, 2009]

Article 72-2 (Procedures for and Method of Orders for Warning or Deletion)

If the Minister intends to order an online service provider to give a warning on a reproducer and transmitter of illegal reproduction, etc., to delete illegal reproductions, etc., or to suspend transmission of them pursuant to Article 133-2(1) of the Act, he/she shall prepare a written order prescribed by Ordinance of the Ministry of Culture, Sports and Tourism and notify it in writing (including electronic documents: hereinafter the same shall apply) [This Article wholly amended by Presidential Decree No. 21634, July 22, 2009]

Article 72-3 (Procedure for and Methods of Orders for Suspension of Accounts)

(1) When the Commission deliberates pursuant to Article 133-2(2) of the Act, it shall take matters referred to in the following subparagraphs into consideration:

i. Recidivism of the relevant reproducer and transmitter;

ii. Quantities reproduced and transmitted by the relevant reproducer and transmitter;

iii. Kinds of illegal reproductions, etc. posted and their possibilities of substituting market;

iv. The influence of illegal reproductions, etc. on the distribution order of works, etc.

(2) If the Minister intends to order an online service provider to suspend accounts of the relevant reproducer and transmitter of illegal reproductions or such pursuant to Article 133-2(2) of the Act, he/she shall prepare a written order in which matters referred to in the following subparagraphs are mentioned and notify it in writing:

i. Accounts of the reproducer and transmitter;

ii. The fact that the reproducer and transmitter have received warnings pursuant to Article 133-2(1)(i) of the Act three times or more;

iii. The fact that the reproducer and transmitter have transmitted illegal reproductions, etc. after he/she received warnings pursuant to Article 133-2(1)(i) of the Act three time or more;

iv. The period of suspension.

(3) The period of suspension of accounts of the reproducer and transmitter pursuant to Article 133-2(ii) of the Act shall be as the following subparagraphs:

i. Less than one month in the case of the first suspension;

ii. Not less than one month and less than three months in the case of the second suspension;

iii. Not less than three months and less than six months in the case of the third or subsequent suspension.

(4) An online service provider who has received a written order referred to in paragraph (2) shall, without delay, notify the relevant reproducer and transmitter of matters referred to in the subparagraphs of paragraph (2) mentioned in writing pursuant to Article 133-2(4) of the Act. [This Article wholly amended by Presidential Decree No. 21634, July 22, 2009]

Article 72-4 (Procedure for and Methods of Orders for Suspension of Bulletin Board Service)

(1) When the Commission deliberates pursuant to Article 133-2(4) of the Act, it shall take matters referred to in the following subparagraphs into consideration:

i. Commercialism of the relevant bulletin board;

ii. Effect of opening of the relevant bulletin board;

iii. Functions and methods of utilization of the relevant bulletin board;

iv. Number of users of the relevant bulletin board;

v. Percentage of illegal reproduction, etc.;

vi. Kinds of illegal reproductions, etc. posted and their possibilities of substituting market;

vii. Degree of efforts of the relevant bulletin board to shut out illegal reproductions, etc.;

viii. Level of providing convenience to posting or utilization of illegal reproductions, etc.

(2) If the Minister intends to order an online service provider to suspend services of the relevant bulletin board pursuant to Article 133-2(4) of the Act, he/she shall prepare a written order in which matters referred to in the following subparagraphs are mentioned and notify it in writing:

i. Bulletin boards subject to suspension;

ii. The fact that he/she has received orders pursuant to Article 133-2(1)(ii) of the Act not less than three times;

iii. The contents of the offense;

iv. The period of suspension.

(3) The period of suspension of services of the relevant bulletin board pursuant to Article 133-2(4) of the Act shall be as the following subparagraphs:

i. Less than one month in the case of the first suspension;

ii. Not less than one month and less than three months in the case of the second suspension;

iii. Not less than three months and less than six months in the case of the third or subsequent suspension.

(4) When online service provider posts the fact of suspension of a bulletin board pursuant to Article 133-2(5) of the Act, he/she shall have users of the relevant bulletin board easily know the fact by mentioning matters referred to in the subparagraphs of paragraph (2). [This Article wholly amended by Presidential Decree No. 21634, July 22, 2009]

Article 72-5 (Procedure for and Methods of Report of Result of Measures)

An online service provider shall mention matters referred to in the following subparagraphs in a report of the result of measures prescribed by Ordinance of the Ministry of Culture, Sports and Tourism pursuant to Article 1332(6) of the Act and submit it to the Minister:

i. The contents of measures taken pursuant to an order;

ii. Information which can identify a reproducer and transmitter (in the case of an order pursuant to Article 133-2(4) of the Act, it shall be excluded)

iii. The date of execution of an order. [This Article wholly amended by Presidential Decree No. 21634, July 22, 2009]

Article 72-6 (Procedure for Recommendation of Correction)

(1) If the Commission intends to recommend correction pursuant to Article 133-3(1) of the Act, it shall recommend correction in writing with matters referred to in the following subparagraphs mentioned therein:

i. The contents of the offense;

ii. Matters recommended to correct;

iii. The deadline for correction;

iv. Measures to be taken when recommendation of correction is refused.

(2) An online service provider who has been notified of recommendation of correction pursuant to paragraph (1) shall notify the Commission of the result of measures taken in writing with matters referred to in the following subparagraphs mentioned therein:

i. The contents of measures taken pursuant to recommendation of correction;

ii. The date of execution of recommendation of correction;

iii. In the case of refusal of recommendation of correction, the reasons thereof.

(3) When the Commission deliberates Article 133-3(1)(iii) of the Act, it shall take matters referred o in Article 72-3(1) into consideration. [This Article wholly amended by Presidential Decree No. 21634, July 22, 2009]

What is The Pirate Party?

2010-08-19T18:14:00.000+01:00

Urgent ACTA Communique

2010-06-23T18:10:00.000+01:00

Today a communique altering ACTA was released with an endorsement of over 600 public interest orgnisations and individuals. The communique concluded that ACTA is a deficient product of a deeply flawed process. The concerns expressed here cover seven areas: fundamental rights and freedoms; the Internet; access to medicines; scope and nature of IP laws; international trade; international law and institutions; and democratic process.

Unlike the negotiators' assertation [1], the public interest groups reached a conclusion that ACTA would undermine a full enjoyment of fundamental rights and liberties including domestic and internationally protected human rights to health, privacy and the protection of personal data, free expression, education, cultural participation, and right to a fair legal process, including fair trial and presumptions of innocence.

The full text of the communique with the list of endorsement is here.

[1] When the draft text of ACTA was made public, the USTR said that ACTA will not interfere with a signatory’s ability to respect its citizens' fundamental rights and liberties.

Liability of a Shipping Company That Delivers Patent Infringing Products

2010-06-05T17:28:00.000+01:00

Injunctive remedy against intermediaries is one of the key elements of the ACTA proposals. The intermediaries under ACTA are defined as broadly as to encompass entities whose services are used by a third party to infringe an intellectual property rights (Articles 2.X and 2.5.X)). The language came from the European Directive on IPR enforcement (Articles 8, 9 and 11 of Directive 2004/48/EC) and aims to go beyond Internet service providers and their liability of third party’s copyright infringement.

While the scope of the intermediaries may vary from jurisdictions, the German Federal Court paved the way for a far-reaching expansion of its application. Last year, the German Court granted an injunctive relief against a shipping agent who has delivered allegedly patent infringing MP3 players.

This case involves a German subsidiary of T.N.V., who provides an express shipping service. On behalf of its client, the defendant has imported allegedly patent infringing MP3 players from China. But the products were confiscated by the German Customs Office upon the request of the plaintiff (an exclusive patent licensee). The plaintiff sought a defendant’s consent on the destruction of the confiscated products. The defendant objected to the allegation on a ground that it, as a shipping company, has no general duty to review its client’s products as to a patent infringement. However, the German Supreme Court rejected this argument and held that the shipping company is liable when it is advised of a specific property right and becomes to know an infringement of the right. In other words, the confiscation by the German Customs Office is sufficient to establish that the shipping agent has knowledge of a patent infringement.

According to Section 139(1) of the German Patent Act, any person who exploits an invention without authorisation may be sued by the injured party to enjoin such use. Further, Section 140a (1) of the German Patent Act provides that “In the cases covered by Section 139, the injured party may require destruction of the product that is the subject matter of the patent and that is in the possession of the infringer or is his property unless the infringing nature of the product can be removed in some other way and its destruction would be disproportionate in the individual case for the infringer or the owner.” In this case, the German Court viewed that the shipping agent is an owner within the meaning of Section 140(a) of the German Patent Act in a sense that he has at least an indirect possession of the MP3 player.

Decision in German is here and a summary in English provided by Mr. Bardehle Pagenberg is here.

* Unlike the Directive 2004/48/EC, the EU-Korea FTA excludes patent from the injunctive relief against the intermediaries (Article 10.48(2) “Each Party shall also ensure that right holders are in a position to apply for an injunction against intermediaries whose services are being used by a third party to infringe copyright, related right, trademarks or geographical indications.”) Footnote 21 of the EU-Korea FTA "the scope of “intermediary” is determined in each Party’s legislation, but shall include those who deliver or distribute infringing goods, and also where appropriate, include online service providers.” This injunctive remedy against the intermediaries is also applied in the form of interlocutory injunction (Article 10.46(1))."

ACTA - Preliminary Comments

2010-05-01T16:04:00.000+01:00

Official release of text is found here. Collections of negotiating text and leaked documents are provided by Program on Information Justice and Intellectual Property (PIJIP) at here.

This is my preliminary comments on the released ACTA text.

Procedural Justice

Civil, criminal and administrative proceedings should be based on the principles of equality before courts and tribunals. Everyone’s right to fair trial is a key element of human rights to safeguard the rule of law. ACTA negotiators have failed to pay due attention to this human rights aspect of procedural justice. The draft text of ACTA is full of provisions biased for one party, IP right holders. Procedural justice is merely expressed in vague, declaratory languages without workable provisions which guarantee fair and equitable procedures between IP right holders and alleged infringers.

Scope of Agreement

Some negotiators, mainly the EU, try to extend ACTA to all forms of IP at least in civil enforcement and border measures. In contrast to copyright and trademark, patent requires fundamentally different approaches. First, patent infringement occurs even when an alleged infringer is not a free rider. For instance, in the US, patent infringements by the free riders are only 1.76% (Cotropia & Lemley, 2008) or about 4% (Bessen & Meurer, 2008). Second, validity of patent is highly dubious. About 46% of US patents have been held invalid at trial (Allison & Lemley, 2008). According to the Korea Patent Office, from 1984 to 2005, 45.2% of registered patents have been found invalid at the first instance trial. In Japan, the invalidation rate at the first trial is 46.7% on average from 2000 to 2006 (Ono, 2008). In Europe, patents attacked under the European opposition procedure were
either revoked completely or narrowed in about 70% of all cases (Graham & Harhoff, 2006). Finally, determination of patent infringement is very difficult even for patent court judges. The difficulty arises from the patent protection conferred upon more abstract or conceptual information than copyrightable expression and trademark’s symbolic information. These three factors suggest that the ACTA proposals for the civil enforcement (especially injunction and provisional measures) and border measures are hardly applied to patent.

Injunctions against Intermediaries

The draft text proposes a mandatory extension of injunction to intermediaries. This is highly problematic in that the intermediaries are too broad. Under the overly broad definition of the intermediary, anyone can be the intermediary whenever its service is used by a third party to infringe an IP right (Article 2.X: Injunctions (2)). This is well beyond the issue of online service providers’ liability. For example, a drug approval authority can be the intermediary because it provides a service for the marketing approval of a patent infringing pharmaceutical product. Any website that puts a third party’s advertisement can be the intermediary when the ad contains a trademark infringing sign. An ISP can be a target of an injunctive litigation when its user conducts an unauthorised filing sharing. What kind of injunctive relief is to be given against the intermediary? Traditional remedy of injunction is a court order to stop infringing activity. But this order cannot be issued against the intermediary because the intermediary did nothing to stop. Then the injunctive relief intended by the ACTA proposal is to order the intermediary to stop providing the service used by an infringer.

Other Civil Remedies

Even when materials and implements the predominant use of which have been in the manufacture or creation of infringing goods, such materials and implements cannot be destroyed so far as they are possessed by a third party rather than an infringer.

Provisional Measure

The proposal lacks procedural justice because it makes a principle the provisional measures inaudita altera parte (Art. 2.5(X)(1). Provisional measures without prior hearing of the other side should be allowed in exceptional case where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed. ACTA proposes the reversal of principle and exception.

Border Measures

Border measures are sort of provisional measures taken by administrative bodies. They have little capacity to render a decision on IP infringement, which requires a highly sophisticated legal analysis. Therefore, the border measures should be limited to cases where the IP infringement is objectively clear. Furthermore, the procedural fairness needs to be more firmly obeyed in the process of border measures. However ACTA proposals completely ignore such preconditions. They are lack of procedures to hear importer’s opinion and appeal process and the administrative bodies can make a decision of destruction of goods.

Special Issue on Anti-Counterfeiting - Oxford J. IP Law and Practice

2010-04-20T19:45:00.001+01:00

The Oxford Journal ofIntellectual Property Law and Practice published a special issue on Anti-Counterfeiting. Full texts of the aricles are only accessible by subscribers but the Jounal's blog provides some editorial notes.

It does not seem that the editors' main concerns are the potential harmful effects by the proposed Anti-Counterfeiting Trade Agreement. One of the editor said in the blog that "the secrecy around the negotiations and the draft text has nourished the partially unjustified fears not only of Pirate Party partisans and anti-ACTA-activists, but also from MEPs and policy makers across all parties, and the EU data protection supervisor."

The special issue contains seven articles:

Stephan Engels,Counterfeiting and piracy: the industry perspective [Abstract]
James L. Bikoff, Keri A.F. Johnston, David K. Heasley, Phillip V. Marano, and Andrea Long, Hauling in the middleman: contributory trade mark infringement in North America [Abstract]
Marius Haman, Africa rising to the anti-counterfeiting challenge [Abstract]
Lambert Pechan and Marius Schneider, Carriers and trade mark infringements: should carriers care? [Abstract]
Olivier Vrins, The real story of a fiction: transit after Montex under Regulation (EC) 1383/2003 [Abstract]
Joe Cohen and Annick Mottet Haugaard, Monetary compensation for trade mark infringement in the European Union [Abstract]
Benoit Godart, IP crime: the new face of organized crime: From IP theft to IP crime [Abstract]

ECJ on Resale Right

2010-04-20T19:09:00.001+01:00

The European Court of Justice ruled on the author's resale right in a disute on paintings of Salvador Dalí who died on 23 January 1989. This concerns on the interpretation of Articles 6(1) and 8(2) and (3) of Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art (OJ 2001 L 272, p. 32).

According to the Directive, the resale right is an inalienable right which cannot be waived and defined as a right to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work by the author (Article 1(1)). The royalty is to be paid to author or after his death to those entitled under him/her (Article 6(1)).The term of resale right is the same as the term of author's right, i.e., for the life of the author and for 70 years after his death.

The decision is here.

Draft Text of ACTA to be Made Public Next Week (April 21st)

2010-04-17T04:08:00.001+01:00

The Joint Statement of the ACTA 8th round indicated that a draft text would be made public on April 21th. The Statement also confirmed no mandatory "graduate response" or "three strikes rule" to repeat copyright infringers. But no mandatory rule does not seem to mean no de facto three strikes rule.

In a press release, USTR showed a continued controversy on the scope of ACTA. The EU still wants criminal enforcement and border measure extended to cover patent and other forms of intellectual property and the US opposes this proposal.

It is noteworthy to see how the negotiators's affirmation that "ACTA will not interfere with a signatory's ability to respect its citizens' fundamental rights and liberties, and will be consistent with the TRIPS Agreement" is reflected in the actual text.

Cooperation of US and Japan in Strengthening IP Protection

2010-04-05T22:57:00.004+01:00

In the 2010 National Trade Estimate Report on Japan, the US Government (USTR) suggests its collaboration with Japan in efforts to strengthen the IP protection around the world, especially in Asia. The measures that USTR urges Japan to take include:

improving copyright protection and enforcement;
improving the efficacy of the patent application process; and
actively working with the United States to develop ways to promote greater protection of IPR worldwide, especially in Asia.

The Report does not provide detailed information on the cooperation for the greater IP protection. But ACTA is a clear example of such a collaboration where they presented joint proposals.

USTR - 2010 Trade Policy Agenda and 2009 Annual Report

2010-03-09T23:22:00.007Z

The USTR submitted the Report to the US congress on March 5, 2010. In its Chapter III "Bilateral and Regional Negotiations and Agreements", the Report mentions the Asia-Pacific Economic Cooperation forum.

Concerning the US-Japan trade relation, it says a cooperative effort to strengthen the Japanese Copyright Law which was made throught the US-Japan Regulatory Reform and Competition Policy Initiative.

According to the Initiative's annual report to the Leaders of 2009, the effort includes: restriction to the private use exception (downloading a musical work or a motion picture from an infringing source with the knowledge that the source is infringing is no longer an exception by the revised Copyright Act which passed the Diet on June 12, 2009); and typical TRIPS-plus provisions such as technical protection measures (for access control), copyright term extension, and statutory damages.

As for Korea, "Korea has been an active participant in efforts to strengthen international IPR enforcement by joining the United States and others in negotiating the Anti-Counterfeiting Trade Agreement (ACTA)."

In Chapter IV Other Trade Activities:

"D. Anti-Counterfeiting Trade Agreement

The United States is working to strengthen cooperation with its trading partners in the fight against counterfeiting and piracy. In October 2007, USTR announced an initiative, in partnership with several key trading partners, to fight counterfeiting and piracy by seeking to negotiate an Anti-Counterfeiting Trade Agreement (ACTA). The ACTA effort brings together a number of countries that are prepared to embrace strong intellectual property rights (IPR) enforcement in a leadership group to seek a new agreement calling for cooperation, strong enforcement practices, and a strong legal framework for IPR enforcement. Participants so far have included Australia, Canada, the European Union (with its 27 Member States), Japan, Korea, Mexico, Morocco, New Zealand, Singapore, and Switzerland. In 2008, these participants engaged in four rounds of negotiations.

Following a review in early 2009, Ambassador Ron Kirk announced on June 12, 2009 that USTR would continue to participate in the negotiations. Two negotiating rounds in Rabat, Morocco and Seoul, Korea were held in 2009.

Additionally, during the review, USTR identified additional opportunities for ensuring meaningful input and keeping the public informed about the ACTA negotiations. Accordingly, in 2009, USTR took the following steps:

established for the first time a dedicated ACTA web page on the USTR website;
issued and updated the first public summary of issues under negotiation;
took the new step of releasing agendas to the public on the ACTA web page before each meeting;
broadened the group of experts from which USTR sought advice, including representatives of intellectual property rights holders, Internet intermediaries, NGOs, and others, about prospective U.S. positions on enforcement of intellectual property rights in the digital environment;
consulted and shared relevant text with USTR Committees of Jurisdiction and the Judiciary Committees in both houses of the U.S. Congress concerning prospective positions; and
strengthened educational efforts online with links on the ACTA web page to valuable and relevant portions of past agreements, for review by anyone who is interested in understanding the U.S. approach to possible legal framework provisions of the ACTA.

USTR also won an endorsement by ACTA partners at the Seoul Round in November 2009 of the need to provide the opportunity for the public to provide meaningful and timely input into the negotiations. This lays the groundwork for cooperative transparency efforts in 2010."

Three Strikes Rule: Sleeping for Seven Months

2010-03-09T22:54:00.003Z

Last month I requested the South Korean government to disclose information on the three strikes rule that came into effect on July 23, 2009. Surprisingly there was no single case in which the rule has been actually applied or considered to be applied.

This is surprising because the government, backed by copyright industries, claimed, when it strongly supported the introduction of the rule, that wilful repeat infringers (called 'heavy uploaders') were about 1,000 and most of the illegal file sharing took place in around 150 ISPs (largely in web storage service providers). Due to the heavy uploaders and ISPs having a symbiotic relationship with them, the loss to the copyright industry was said to amount to approximately 2 trillion KRW (in 2007). Relying upon the overestimated number, the government proclaimed that the three strikes rule was of urgent necessity for saving the copyright industries that were going to wither away.

According to Article 133bis of the Korean Copyright Act, the Minister of Culture, Sports and Tourism (MCST) may order ISPs to take a measure: (i) to suspend for a period shorter than 6 months a user account of a repeat infringer [1] (Para 2); or (ii) to shut down for a period shorter than 6 months a web site [2] that allows a file uploading and has been ordered by MCST at least three times to stop an illegal filing sharing (Para 4). These are key provisions of the Korean three strikes rule.

When the rule was introduced, the notice-and-takedown system was also revised. Under the revised system, the Copyright Commission (a governmental body) may recommend ISPs to warn against an illegal material transmitter or to delete or cease to transmit the illegal material (Article 133ter). From July 23 to December 31, 2009, the Commission sent ISPs 24,394 recommendations and ISPs fulfilled what was recommended in 24,030 cases. This means 100% compliance by ISPs (the remaining notices were not serviced due to unknown address or close of business of ISPs). Table 1 below shows the recommendations sent by the Commission to ISPs from July 23, 2009 to January 31, 2010, and table 2 illustrates the measures taken by ISPs upon the Commission’s recommendations for the same period of time.

Table 1: Recommendations by the Copyright Commissions

Year

Recommendations

(Warning)

Recommendations

(Delete or Cease to Transmit)

Suspension of User Account

Total

2009 (From July 23)

12,420

11,974

24,394

2010 (to January 31)

2,555

2,500

5,055

Table 2: Measures Taken by ISPs upon the Commission’s Recommendations

Year	Measures by ISPs (Warning)	Measures by ISPs (Delete or Cease to Transmit)	Suspension of User Account	Total
2009 (From July 23)	12,237	11,793	0	24,030
2010	2,549	2,494	0	5,043
* Warnings and takedown notices of 376 were due to close of business or unknown address of ISPs.

This tells us two things. First, the three strike rule is redundant and unnecessary. Its urgent necessity proclaimed by the government and copyright industries turns out to be untrue. Second, the notice-and-takedown system did work. The figure of 100% compliance by ISPs shows it worked too much. To ISPs, the compliance to the Commission’s recommendations is the easiest and cheapest way. What we have to concern is its chilling effect on freedom of speech and on everyone’s right to access to information.

[1] The ‘repeat infringer’ refers to one who has been warned or noticed to cease to transmit illegal material more than three times by ISPs. The warning or the notice by ISPs is to be made upon an order by MCST and such an order has to be issued after consultation with the Copyright Commission. The warning is directed to those who conduct illegal reproduction or transmitting copyrighted works, and the notice requires ISPs to delete or stop transmission of the illegally reproduced material.

The ‘user account’ refers to an account provided by an ISP in question for identifying or managing users. It includes user accounts provided by the same ISP other than the account used in the transmission of the illegally reproduced material. However, a user’s email account is excluded.

[2] For the ‘web site,’ Article 133bis uses the term ‘bulletin board,’ a definition of which is provided in other law (“Act on Promotion of Information and Communications Network Utilization and Information Protection”). According to it, a ‘bulletin board’ refers to “regardless of its name, a computer programme or a technological device that enables a user to post information such as sign, character, voice, sound, image or video on an information telecommunication network for the purpose of disclosing the information to the public. A bulletin board that may be shut down under the three strikes rule is broad to cover what is operated for commercial purposes or provides convenience for users.

* The MCST describes the Korean three strikes rule in a slightly different nuance here.

EC Event: ACTA Stakeholders’ Consultation Meeting

2010-02-25T17:10:00.002Z

DG Trade of EC announced this event.

http://trade.ec.europa.eu/doclib/press/index.cfm?id=517&serie=318&langId=en

ACTA – Stakeholders' Consultation Meeting

The Directorate General for Trade of the European Commission is organising a meeting on 22 March 2010, to inform and consult interested parties about the negotiation of a plurilateral Anti-Counterfeiting Trade Agreement (ACTA).

The goal of ACTA is to provide an improved framework for countries committed to intellectual property protection, in view of effectively addressing the challenges of IPR infringement today.

The purposes of the meeting will be to:

1) Inform stakeholders about the ACTA goals and the negotiation process so far;

2) Receive comments from stakeholders about their views (expectations or concerns) regarding ACTA.

Relevant information about the ACTA negotiations can be found at the External Trade website. A detailed written state-of-play of the negotiation is available at the same location.

PRACTICAL DETAILS

Date: Monday 22nd March 2010
Time: 10.00 – 12:30
Location: Charlemagne Building, Room Alcide de Gaspieri - Rue de la Loi, 170 B-1049 Brussels

To register (pre-registration is required for security reasons)

- Please send an email with your name and the name of the represented organisation to TRADE-ACTA-MEETING@ec.europa.eu
- Due to the room capacity (approx. 350), participation will be on a first-come, first-serve basis. Presence of more than one person per participating organisation will also be conditioned to the total number of participants.
- Closing date for registration: 15 March 2010
- Please note: Admission is free. However, the European Commission is not able to cover travel or subsistence expenses for attendance at this meeting.
- Those unable to participate in the meeting and/or wishing to present their positions in writing may send their comments to TRADE-ACTA-MEETING@ec.europa.eu , no later than 22 March 2010.

The Formation of Critical Realism

2010-02-07T22:47:00.002Z

About the Book

This series of interviews, conducted in the form of exchanges between Roy Bhaskar and Mervyn Hartwig, tells a riveting story of the formation and development of critical realism.

Three intersecting and interweaving narratives unfold in the course of this unfinished story: the personal narrative of Roy Bhaskar, born of an Indian father and English mother, a child of post-war Britain and Indian partition and independence; the intellectual narrative of the emergence and growth of critical realism; and a world-historical story, itself theorized by critical realism in its discussion of the development of modernity.

This book gives an invaluable account of the development of critical realism, and its consolidation as a leading philosophy of our times. It takes us through the major moments of its formation, the principal objections to and controversies within critical realism, the establishment of its institutions, and considers its limits and future development. Special features of the book include discussion of the genesis of critical realism, and the origins and nature of the so-called dialectical and spiritual turns.

The informal dialogical style of The Formation of Critical Realism makes it compelling reading and an invaluable source for students of critical realism as well as all those interested in the intellectual story of our times.

UK Human Rights Committee on "three strikes" Rule

2010-02-07T01:22:00.004Z

Digital Economy Bill introduced by the UK Government in the House of Lards on 19 November 2009 contains so-called "three strike" rule (gratuate response). This is to combat an illegal file-sharing via a two-stage process: first, by requiring ISPs to maintain a list of accounts of suspected users; and second, through delegated powers to introduce technical measures, such as disconnection.

The Billl provoked concerns about rights to privacy, freedom of expression, and procedural justice and fairness. On February 5, 2010, the Joint Committee on Human Rights appointed by the House of Lords and the House of Commons issued its final report on the issues.

Concerning the procedural fairness and justice, the report says:

"1.44 We accept that there is no clear answer to whether the decisions taken during the process of issuing copyright infringement reports and infringement lists involve the determination of any individuals’ civil rights and that it is unlikely that Article 6 ECHR is engaged. However, in the light of the acceptance by the EU that a fair process is necessary for regulation of individual service users’ access to the internet, we consider that statutory provision for a right to appeal to an independent body against inclusion on any infringement list at this stage would lead to a fairer procedure and so be a human rights enhancing measure.

...

1.48 Although there is very little detail about the appeal mechanism, the enforcement and reviewing bodies on the face of the Bill, it is our view that, provided the time frame for review and appeal is adequate and the measures are routinely suspended until the right of appeal is exhausted, it is unlikely that these provisions will be structurally incompatible with Article 6 ECHR. The provision of a review by an independent reviewing body and a full right to appeal before the First Tier Tribunal, prior to the imposition of any sanction is adequate to meet the requirements of the Convention for a hearing by an independent and impartial tribunal."

New Rule on the Social Use of Patented Invention

2010-01-31T15:02:00.005Z

On January 27, 2010, the Korean Patent Act was amended to facilitate social use of patented invention. Two changes were brought by the amendment.

First, the government may use a patented invention in public interest. This means that the government use is no longer limited to national defense or other circumstances of emergency. But the government use must meet a controversial requirement of “non-commercial use.” This is controversial because the government may allow a third party (mainly for-profit businesses) to use the patented invention. This rule on the government use goes into effect on July 28, 2010.

Second, it is made clear that an experimental use exemption encompasses any activities for getting an approval of pharmaceutical products or agricultural chemicals. This change took effect as of January 27, 2010.

English translation of the Amendment:

Article 106bis (Government Use of Patented Invention)
(1) If a patented invention is necessary for national emergency, other extreme urgency or non-commercial use in public interest, the government may use the patented invention or allow a person other than the government to use the patented invention.
(2) When the government or the person other than the government knows or has demonstrable grounds to know the existence of a valid patent right, the patentee, the exclusive licensee or the registered non-exclusive licensee of the patent right shall be informed promptly of the fact that the patented invention is used according to Paragraph 1.
(3) The government or the person other than the government, when a patented invention is used pursuant to Paragraph 1, shall pay a reasonable compensation to the patentee, the exclusive licensee or the registered non-exclusive licensee of the patent.
(4) Matters necessary for the government use and the payment of the reasonable compensation are prescribed by Presidential Decree.

Article 96 (Limitations on a Patent Right)
(1) The effect of a patent right does not extend to any of the following subparagraphs.
(i) Working a patented invention for research or experimental purposes (including research or experiment for the purpose of getting an approval or reporting a pharmaceutical product pursuant to the Pharmaceutical Affairs Act or for registering agricultural chemical pursuant to the Agricultural Chemicals Regulation Act.

Blogging ACTA Across The Globe: Lessons From Korea

2010-01-28T15:07:00.002Z

For Korea, ACTA is the Anti-Commons Trade Agreement

http://www.eff.org/deeplinks/2010/01/acta-and-korea

In August 2008, our group, IPLeft, demanded that the Korean government disclose relevant information about its stance on the negotiation of ACTA. The disclosure was denied, as was our appeal. The reason for the denial was unconvincing: the disclosure, we were told, would result in "a harmful effect on a diplomatic relationship with foreign countries and severe damage to considerable national interests".

How does the participation in an international cooperation to combat the trade of "counterfeit and pirated goods" harmfully impact foreign relationships? Which national interests are to be damaged by open and transparent discussion? Unlike its attitude to civic society and the general public, it turned out that the Korean government already provided relevant information to, and sought opinions from, particular business groups from the earliest stages of the negotiation, at least from November 2007.

When it comes to ACTA, transparency and openness became principles that apply only to a small number of business interests. This is why the secrecy of ACTA is so bad: it mirrors a particular perspective that views the system of intellectual property as a means for maximizing commercial profit and which pays little attention to the broader social, cultural and economic implications of the IP system.

This imbalanced and biased approach is infused into the draft texts that we have seen. The draft chapters on civil enforcement, criminal enforcement, and border measures lack procedural justice and fairness. They improperly promote the interests of IP holders to the detriment of the other party in civil, criminal and administrative proceedings.

The provisions contained in the proposed Internet Chapter appear to impose undue obligations on ISPs. The extent to which ISPs are to be liable for copyright infringement by users is a matter of domestic cultural policy, not a trade issue. Careful balancing of interests and fine-tuning are necessary, including factors specific to local culture and environment which cannot be concluded in a closed room occupied by trade negotiators.

More significantly, the liability of ISPs is of great importance not merely for the protection of copyright: it is important for the protection and realization of everyone’s right to take part in cultural life as declared in legally binding international human rights instruments. One of our concerns about ACTA is the risk of undercutting the principle of the rule of law and the possible conflict with human rights, in particular with the right to a fair trial, the right to equality before courts and tribunals, the right to equality of arms, and the right to be presumed innocent. ACTA tries to introduce substantial changes in civil and criminal procedures. But the proposed changes give rise to issues of procedural justice and fairness, jeopardizing Korea’s obligations under the international human rights instruments, e.g., the International Covenant on Civil and Political Rights, and potentially weakening the democratic values recognized in our Constitution.

For instance, pursuant to the US-Japan joint proposal, any provisional measures such as a preliminary injunction may be rendered by judicial authorities without a prior hearing of the alleged infringer. Here, neither "irreparable harm to the right holder" nor "a demonstrable risk of evidence being destroyed" is explicitly required. Even the Customs office may take an ex-officio action to suspend the release of suspected copyright or trademark infringing goods. Moreover, right holders may be awarded a predetermined amount of damages without having a burden to show the amount of damage or even when the amount is greater than actual damage. An even more severe breach of principles of procedural justice is found in a so-called "camcorder provision" under which anyone who attempts to use an audiovisual recording device to make a copy of any part of an audiovisual work in a theater may be criminally punished. This out-of-proportion rule not only produces a direct conflict with the right to be presumed innocent but also undermines the principle of fair use or fair dealing.

National autonomy is vital in order to decide the proper level of local IP protection and enforcement. Korean IP law has undergone substantial revision due to the threat of trade sanctions from both the US and the EU since the early 1980s. This economic coercion has continued for about thirty years, and has led to an emergence of consistent domestic pressure for stronger IP protection.

Interestingly, the strongest advocates for these reforms in Korea are not the IP industries: they are the executive branches in government which claim competance over the administration of patent, trademark, and copyright. To them, stronger IP protection and enforcement is a chance to enhance their position. The unending economic pressure and the heavy reliance of our domestic economy upon exports have produced this environment. The problem is that these state actors are much more influential than other, emerging local businesses, because they possess institutional capacities and resources to promote a maximalist IP regulatory culture.

With this power, these government agencies have introduced new laws in Korea which may well be used to support controversial provisions currently being discussed in Guadalajara, Mexico. Examples include a filtering obligation imposed on certain online service providers, and a "graduated response" rule under which the Minister of Culture can suspend or terminate the Internet account of a repeat infringer or even shut down a website that the repeat infringer is using. Advocates claim that the shutting-down provision is incorporated in the US-Korea Free Trade Agreement (and Side Letters) (currently awaiting ratification), and may possibly be pushed by the US in modified form during the ACTA negotiations. If ACTA is concluded with an inspiration of such provisions and applied to Korea under the name of international harmony, our effort to reform the copyright system would be undermined, and opportunities for democratic policy discussion at local level would be lost.

Contrary to the beliefs of ACTA negotiators, stronger, criminal enforcement rules can create unintended consequences among the general public. In Korea, following the introduction of these new laws, reports of criminal copyright infringement skyrocketed from 14,838 to 90,979 between 2005 and 2008. Among these, juveniles victims occupied 24% in 2008, an increase from 1.9% in 2005.

This reported increase, however, does not represent a rapid rise of the unauthorized use of copyrighted material by juveniles. Rather, it shows how criminal sanctions can be misused. Under the Korean Copyright Act, any unauthorized acts of reproduction or distribution of copyrighted works can invoke a criminal liability. This wide coverage of criminal sanction paves the way to abuse or misuse of criminal enforcement. ACTA is no different in this sense. In order to be "willful copyright piracy" under ACTA, an infringing activity needs to be "on a commercial scale". But commercial scale is defined so broadly that it covers activities with "no direct or indirect motivation of financial gain". With this broad definition, the infringement on a commercial scale may include almost every unauthorized use of copyrighted work. So, for instance, those who download a single piece of music may risk criminal penalties. In other words, ACTA opens the door to the global misuse of criminal enforcement rules, beyond even what we've seen in Korea.

Here, criminal sanctions have become a sort of new business model for lawyers acting for copyright holders (mainly music and film industries). They monitor Internet users and send warning letters to suspected individuals threatening a criminal action. In exchange for not taking the criminal action, they ask for a cash settlement. Criminal enforcement procedures provide copyright holders with leverage; using the threat of criminal action as leverage for the settlement negotiation as the initiation of criminal procedure is triggered by a complaint by the right holder. Among the 90,979 complaints in 2008, 56% were settled out of court.

ACTA risks exporting Korea's criminal enforcement regime, while importing the worst of other countries' IP laws. But that's not the only reason to oppose it. A trade agreement that breaches procedural justice, fairness, transparency, and proportionality is not Anti-Counterfeiting: it's Anti-Commons.

Glivec price cut by Government was revoked by Court

2010-01-26T15:04:00.003Z

The court applied a rule (Ministerial Decree) which was revised on December 29, 2006. According to the rule, adjustment of the ceiling price can be rendered by the Minister of Health when the ceiling price is "highly unreasonable."

http://www.tradingmarkets.com/news/stock-alert/nvs_south-korean-court-oks-pricing-of-novartis-anti-leukemia-drug-720347.html

SEOUL, Jan 22, 2010 (AsiaPulse via COMTEX) --

A Seoul court on Friday said the price of Gleevec, an anti-leukemia drug developed by Swiss pharmaceutical firm Novartis, is not "unreasonable," ruling in favor of the drugmaker in a years-long battle with the local government over the cost of the medicine.

Last September, the Ministry for Health, Welfare and Family Affairs notified Novartis of its decision to reduce the price of Gleevec to 19,818 won (US$17.3) per capsule from 23,045 won, the initial price agreed to by the government and Novartis under a deal reached in January 2003. The move came one year after a group of civic activists and patients appealed to the ministry, complaining that leukemia patients were forced to pay up to 2 million won per month for the medicine.

Following the ministry's notification, the Swiss pharmaceutical giant filed a suit with the Seoul Administrative Court, seeking to nullify the government's move to lower the price.

"As Gleevec's upper-ceiling price was set as the average price of the drug in the seven most advanced countries, including the United States, it is hard to conclude the price was considerably unreasonable," the court said in its ruling.

Gleevec is used to treat patients with chronic myelogenous leukemia (CML), a form of blood cancer in which the body produces too many abnormal white blood cells. The deadly disease afflicts about 500 people in Korea each year, according to the ministry.

Major foreign pharmaceutical firms and the Korean government have battled over the pricing of several other essential drugs. Civic groups say that charging the same price in Korea as in the world's richest countries is unfair considering that per capita GDP is a lot higher in those countries.

The health ministry said it will review the ruling and decide whether to appeal the case or not in two weeks.

"This ruling is a regrettable decision as it could set a bad precedent in nullifying the ministry's administrative order," a health official said.

Novartis said it respects the court's decision, declining to elaborate further.

EC investigation on patent deal by originator and generic drug companies

2010-01-13T14:28:00.005Z

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/12&format=HTML&aged=0&language=EN&guiLanguage=en

Brussels, 12 th January 2010

Antitrust: Commission launches monitoring of patent settlements concluded between pharmaceutical companies

The European Commission can confirm that on 12 January 2010, on the basis of EU antitrust rules, it addressed requests for information to certain pharmaceutical companies asking them to submit copies of their patent settlement agreements. The requests cover patent settlement agreements concluded between originator and generic pharmaceutical companies in the period from 1 July 2008 to 31 December 2009 and relating to the EU/EEA. The Commission is in particular looking at patent settlements where an originator company pays off a generic competitor in return for delayed market entry of a generic drug. This monitoring exercise has been launched in the light of the findings of the competition inquiry into the pharmaceutical sector Inquiry (published in July 2009, see IP/09/1098 and MEMO/09/321 ). The sector inquiry highlighted the risk that certain types of patent settlements may have negative effects on European consumers by depriving them of a broader choice of medicines at lower prices and indicated that the Commission could monitor such patent settlements.

Commissioner Kroes commented: "The Commission's pharmaceutical sector inquiry points to significant shortcomings in the pharmaceutical sector. Patent settlements are an area of concern, not least if there are situations where an originator company pays off a generic competitor in return for delayed market entry. We need to monitor this type of agreement in order to better understand why, by whom and under which conditions they are concluded. The monitoring will also provide us with the possibility to act should this become necessary. Since completing the sector inquiry, the Commission has launched a number of new antitrust investigations and we will continue to do so should this be necessary."

A selected number of originator and generic companies received an information request in which they are asked to submit to the Commission a copy of all patent settlement agreements relevant for the EU/EEA markets and concluded in the period from 1 July 2008 to 31 December 2009, as well as copies of all annexes, related agreements and amendments. In order to limit the administrative burden on companies, they were asked for copies of the agreements without additional background information. Following receipt of the responses, the Commission will analyse the agreements and publish a short report providing a statistical overview. In case a specific settlement raises additional questions, a more targeted request for information could follow. Depending on the outcome of the exercise, this round of information requests may be repeated annually for as long as the Commission considers that there is a potential problem.

Generic Tamiflu Approved

2009-12-10T14:12:00.004Z

According to some local news stories, the Korea FDA approved, on December 9, a generic drug of Tamiflu (Tamivir Capsule manufactured by Chong Gun Dang) for the first time in Korea. For instance, see http://www.arirang.co.kr/Player/Player_Script.asp?vSeq=51913&code=News or http://www.ytn.co.kr/_ln/0103_200912091015149083.

Around 10 additional local pharmaceutical companies have applied for an approval for their generic drugs and are likely to be approved soon. However the approval does not mean actual distribution of the off-patent drugs. Without getting a license from Gilead Science (a patent holder of Tamiflu), the local companies can not put their products on the market.

Notes from the Meeting between Civil Society Organization Members and Korean Government (MCST)

2009-11-27T14:24:00.004Z

Notes from the Meeting between Civil Society Organization Members and Korean Government (MCST)

November 27, 2009

MCST: Why national civil society groups are interested in the proposed WIPO Treaty? What makes CSO members take part in such a movement?

CSO: Although Korean domestic laws already have provisions similar to the proposed WIPO Treaty, access to foreign works can be enhanced by the proposed WIPO Treaty. Our participation is also vital for the shared aims of people with reading disabilities all over the world.

MCST: Korean delegation is "supportive" of the proposed WIPO Treaty and hopes the proposal will become an international treaty as proposed, rather than weakened. One of the concerns is that some delegations =96 including that of the US =96 worry that the proposed WIPO Treaty may encourage copyright infringements, which are already prevalent. If such concern is not relaxed, entering into a treaty is to be delayed. Furthermore, since the WIPO Internet Treaty of 1996 we have not seen any other treaty concluded within the WIPO (e.g. the broadcasting treaty); getting agreement on such a treaty for people with reading disabilities is also difficult. But the text of a treaty is already on the table and this is a good start.

MCST: Concerning the "alternative ways" to which the Korean delegation referred at the WIPO meeting, the MCST has no clear ideas about what exactly these =93alternative ways=94 are, and the Korean delegation is not in a position to oppose the proposed WIPO Treaty. When the WIPO discusses a treaty, any urgent efforts by the WIPO necessary for helping people with reading disabilities are likely to be halted because the WIPO is an intergovernmental organization with limited resources. [On the other hand, according to a local news story (mediaus.co.kr), the "alternative ways" may include "recommendations" which are easier to agree on than a treaty that may take more than 10 years, says an official of the MCST.

CSO: Our concern is that many industrialized countries have indirectly expressed their opposition and that the Korean government has frequently followed the U.S. position. So the statement on "alternative ways" seems to be no different from such indirect opposition. Nonetheless, we welcome if the MCST is in a supportive position and demand a clear expression of support from the Korean delegation at the next session of the SCCR.

MCST: Concerning domestic policy on people with reading disabilities, publishers still oppose the recently revised provisions in the Copyright Act regarding copyright limitation for such people. Thus the MCST focuses more on practical issues such as how to ensure the prevention of copyright infringement in the process of converting copyrighted works into an accessible format for people with reading disabilities.

Open Letter to the Korean Government Concerning the Proposed WIPO Treaty for People with Reading Disabilities

2009-11-04T14:20:00.002Z

Open Letter to the Korean Government Concerning the Proposed WIPO Treaty for People with Reading Disabilities

The 18th session of the Standing Committee on Copyright and Related Rights (SCCR) of the World Intellectual Property Organization (WIPO) was held on 25 to 29 May 2009. During this session, Brazil, Ecuador and Paraguay proposed official discussions on the WIPO Treaty for Improved Access for Blind, Visually Impaired and Other Persons with Reading Disabilities (the proposed WIPO Treaty), which was presented by the World Blind Union last year.

It is widely accepted that a number of people with reading disabilities throughout the world have suffered from restriction in self-development and social participation due to limited access to copyrighted works. Constructing social conditions in which people with reading disabilities can equally participate in the cultural life and enjoy scientific advancement and its benefits is not only a legitimate right of these people, but also an obligation of the state. As a way of fulfilling this obligation, South Korea has tried, like some other states, to ensure rights of people with reading disabilities through the provision of limitations on copyright in the Copyright Act. Yet copyright provisions differ from one country to the next, and efforts to protect people's right to access in different countries has been constrained. It is therefore necessary to establish an internationally applied rule regarding minimum standards on copyright limitations for people with reading disabilities. This is also vital for striking a fair balance between the protection of copyright and the fair use of copyrighted works, which is inherent and essential in a copyright system.

Considering this, we ask the following questions on the position of the Ministry of Culture, Sports and Tourism (MCST) in connection with the proposed WIPO Treaty.

(1) At the 18th session of the SCCR, the Korean delegation, while admitting the importance of enhancing access to copyrighted works by people with reading disabilities, supported "alternative ways", rather than negotiating a treaty. What does the MCST actually mean by "alternative ways" that can enhance the right to access of people with reading disabilities in an effective and sustainable manner, as
opposed to temporary assistance for these people?

(2) What is the reason for the position of the MCST and the Korean delegation supporting "alternative ways" rather than a treaty?

(3) Has the MCST, as an executive branch in charge of copyright policies, conducted a detailed review of the proposed WIPO Treaty? We ask that any review be made public.

(4) Does the MCST consider the proposed WIPO Treaty to be in conflict with any provisions of the Korea Copyright Act?

(5) We believe that the proposed WIPO Treaty can be negotiated in parallel with any efforts seeking to enhance access to information for people with reading disabilities. International efforts to improve access to information for people with reading disabilities started several years ago, and relevant discussions within the WIPO began in 2003. We hardly see any reason to delay discussions on an international treaty for that purpose.

We would like to know if the MCST and the Korean delegation to the WIPO intend to clearly express strong support for the proposed WIPO Treaty.

November 4, 2009

Disability Discrimination Act of Solidarity in Korea (DDASK) IPLeft (Intellectual Property Left)

Copyright L&E for Libraries

2009-05-26T14:11:00.003+01:00

Bill No. 4389 to Amend the Korea Copyright Act Introduced on April 2, 2009 by Ten Congressmen (Lead by Congressman Choi, Munsoon)

1. Current Provision on Copyright L&E for Libraries

Article 31(Reproduction, etc. in Libraries, etc.)
(1)Libraries under the Libraries and Reading Promotion Act and the facilities (including the heads of the relevant facilities hereinafter referred to as "libraries, etc.") as prescribed by Presidential Decree among those facilities which provide books, documents, records and other materials (hereinafter referred to as "books, etc.") for public use may reproduce the works by utilizing books, etc. held by the libraries, etc. (in the case of Subparagraph 1, including the books, etc. reproduced by or interactively transmitted to the libraries, etc. in accordance with the provision of Paragraph 3 hereof) in any of the following cases: provided that in the case of Subparagraphs 1 and 3, the works may not be reproduced in digital format.
1. Where, at the request of a user and for the purpose of research and study, a single copy of a part of books, etc. already made public is provided to him
2. Where it is necessary for libraries, etc. to reproduce books, etc. for the purpose of preserving such books, etc. and
3. Where libraries, etc. provide other libraries etc. with a reproduction of books, etc. that are out of print or scarcely available for similar reasons at the request of other libraries etc. for their collection purpose.
(2) Libraries, etc. may reproduce or interactively transmit their books, etc. to allow users to peruse them in such libraries, etc. by using devices capable of information processing such as computers, etc. In such case, the number of users who may peruse them at the same time shall not exceed the number of copies of such books, etc. held by the libraries, etc. or authorized to be used by the persons with copyrights or other rights protected according to this Act.
(3) Libraries, etc. may reproduce or interactively transmit their books, etc. to allow users in other libraries, etc. to peruse them by using computers, etc.; provided that, in those cases where all or a part of the books, etc. have been published for sale, such books, etc. shall not be reproduced or interactively transmitted unless a period of five years has elapsed since the publication date of such books, etc.
(4) In reproducing books, etc. pursuant to Subparagraph 2 of Paragraph (1), Paragraph (2) or Paragraph (3), libraries, etc. shall not reproduce such books, etc. in digital format if they are being sold in digital format.
(5) In reproducing books, etc. in digital format pursuant to Subparagraph 1 of Paragraph (1), or reproducing or interactively transmitting books, etc. for the purpose of allowing perusal inside other libraries, etc. pursuant to Paragraph (3), libraries, etc. shall pay the owners of authors' property rights compensation in accordance with the standards determined and published by the Minister of Culture provided that said provision shall not apply to books, etc. (excluding those books, etc. which are, in part or in whole, published for a sales purpose) regarding which the state, local governments or schools as provided in Article 2 of the Higher Education Act hold authors' property rights.
(6) The regulation regarding compensation in Paragraph 5 to Paragraph 9 of Article 25, shall apply mutatis mutandis to foregoing Paragraph 5 with regard to distribution of compensation, etc.
(7) If books, etc. are reproduced or interactively transmitted in digital format pursuant to the foregoing Paragraphs (1) through (3), libraries, etc. shall take necessary measures as provided by Presidential Decree such as reproduction prevention measures in order to prevent infringement of copyrights and other rights protected under this Act.

2. Amendment

Article 31(Reproduction, etc. in Libraries, etc.)
(1) In Libraries under the Libraries and Reading Promotion Act and the facilities (hereinafter referred to as "libraries, etc.") as prescribed by Presidential Decree among those facilities which provide books, documents, records and other materials (hereinafter referred to as "books, etc.") for public use may be produced the works by utilizing books, etc. held by the libraries, etc. (in the case of Subparagraph 1, including the books, etc. reproduced by or interactively transmitted to the libraries, etc. in accordance with the provision of Paragraph 2 hereof) in any of the following cases: provided that in the case of Subparagraph 1, the works may not be reproduced in digital format.
a. Where, at the request of a user and for the purpose of research and study, a single copy of a part of books, etc. already made public is provided to him
b. Where it is necessary for libraries, etc. to reproduce books, etc. for the purpose of preserving such books, etc. and
c. Where libraries, etc. provide other libraries etc. with a reproduction of books, etc. that are out of print or scarcely available for similar reasons at the request of other libraries etc. for their collection purpose.
(2) Libraries, etc. may reproduce or interactively transmit their books, etc. to allow users to peruse them in such libraries, etc. (including an Internet address that is supported by an information telecommunication network of such libraries, etc.), in other libraries, etc., and outside of the libraries, etc. by using devices capable of information processing such as computers, etc., provided that in case where all or a part of the books, etc. have been published for sale (excluding books, etc. that are out of print or scarcely available for similar reasons), such books, etc. shall not be perused outside the libraries, etc. unless a period of five years has passed from the publication date of such books, etc.
(3) (Deleted)
(4) In reproducing books, etc. pursuant to Paragraph (2), libraries, etc. shall not reproduce such books, etc. in digital format if they are being sold in digital format.
(5) In reproducing or interactively transmitting books, etc. for inside other libraries, etc. or for outside libraries, etc., libraries, etc. shall pay the owners of authors' property rights compensation in accordance with the standards determined and published by the Minister of Culture provided that said provision shall not
apply to:
a. books, etc. (excluding those books, etc. which are, in part or in whole, published for a sales purpose) regarding which the state, local governments or schools as provided in Article 2 of the Higher Education Act hold authors' property rights;
b. books, etc. of which use is permitted free of charge by the owners of authors' property rights; and
c. those cases pursuant to Subparagraphs 2 and 3 of Paragraph 1.

(6) The regulation regarding compensation in Paragraph 5 to Paragraph 9 of Article 25, shall apply mutatis mutandis to foregoing Paragraph 5 with regard to distribution of compensation, etc. In this case the state or local governments may provide with a subsidy for libraries, etc.

(7) If books, etc. are reproduced or interactively transmitted in digital format pursuant to the foregoing Paragraphs (1) through (2), libraries, etc. shall take necessary measures as provided by Presidential Decree such as reproduction prevention measures in order to prevent infringement of copyrights and other rights protected under this Act.

3. Explanation of the Amendment

3-1. Paragraph (1)

The current provision is designed to allow "libraries" to make copies. This creates an unintended consequence: only librarians can reproduce works upon request of users. Put differently, users can not make their own copies of works held by a library even with using a self-service photocopier which is under control of the library. Therefore, librarians need to be engaged in every reproduction task and to police the activities of users.

The Amendment abolishes the division between librarian copying and copying by users and permits copying by users or agencies employed by libraries.

Further, the Amendment permits the copying of works in "digital format." Such a copy can be provided for other libraries where the works are unavailable or scarcely available due to, e.g., out-of-print.

3-2. Paragraph (2)

Expansion of "in the library"

Under the current provision, a library is defined as an establishment occupying physically the same space. Therefore, for instance, when a university has several libraries distant but connected by the same computer network, each library is separate one within the meaning of current Article 31.

The Amendment expands the concept of "in the library" by adding the phrase "including an Internet address that is supported by an information telecommunication network of such libraries, etc."

Remote Access

Under the current provision, in order to access works provided in digital format by a library, users have to visit the library. Further, in such a library, the number of users concurrently accessing the digital works is limited by the number of physical copies held by the library.

The Amendment removes these two limitations, allowing remote access to the digital works regardless of the number of the physical copies kept by the library. In consideration of concerns of and harmful impacts on the publishers, the Amendment provides that peruse by readers outside the libraries is only permitted after five years have passed from the date when the works were published for sale. Even after the elapse of five years, libraries have to pay compensation to a copyright holder for their providing for the remote use (Paragraph 5).

3-3. Paragraph (3)

Deleted in accordance with the amendment of Paragraph (2).

3-4. Paragraph (4)

It is permitted that libraries reproduce works in digital formats even when they are being sold in digital format so long as the reproduction is made for the purpose of preservation under Subparagraph 2 of Paragraph 1.

3-5. Paragraph (5)

The current compensation rule applies to any interactive transmission between libraries. The Amendment rules out the transmission of works that are non-for-sale.

3-6. Paragraph (6)

The Amendment enables the State or local government to financially assist a library having a slim budget for paying compensation to the copyright holders.

EU Wants Patent Provisions In ACTA

2009-05-08T14:33:00.004+01:00

According to Inside US Trade, "the European Union is insisting that the Anti-Counterfeiting Trade Agreement (ACTA) cover all intellectual property rights, including patents, and not focus exclusively on copyright and counterfeit items."

While the US-Japan joint proposals focus on trademark and copyright infringement (counterfeiting and piracy in ACTA's jargon), the EU "favors greater inclusion of patent protections in the talks." But it seems that the EU "is not pushing for patent infringements to be subject to ACTA criminal enforcement."

Duke University and Trimeris in Compulsory License Case of Fuzeon

2009-05-01T14:38:00.005+01:00

Today took place a meeting of the Dispute Settlement Committee within the Korea Patent Office to hear opinions of parties involved in a case of compulsory license of Fuzeon patent. I did not attend the meeting but obtained the material presented by Duke University and Trimeris through their Korean attorney, Kim & Chang.

Duke University and Trimeris, resting on four grounds, insisted the CL request to be dismissed. First they argued that IPLeft and KANOS who initiated this case lack the standing to request a CL because they have neither ability to manufacture nor import a pharmaceutical product covered by the Fuzeon patents. The Patent Act does not allow a licensee under the CL to be assigned to a third party. Therefore IPLeft and KANOS are not "person who intends to work the patented invention" within the meaning of Article 107.

Second, Duke University and Trimeris argued that the statutory condition of a prior negotiation was not met. Under Article 107, the condition of a prior negotiation is exempted only when the intended working of a patented invention is of non-commercial use. IPLeft and KANOS failed to establish the non-commercial working as they indicated to sell a product under the CL at a price set by government (25,746
KW).

Third ground relates to the statutory requirement of "the particular necessity for the public interest". Duke University and Trimeris took a position that granting a compulsory license is exceptional and should be subject to a strict interpretation of the statutory requirement as it imposes a restriction on property right protected under the Constitution and the Patent Act. They argued the requirement of particular necessity for the public interest can be met when there is no substitutional measure in an emergent situation. Further, the determination of the particular necessity for the public interest should be made by balance striking between "the interests of the
general public and a patentee" through the protection of a patent right and "the interests of the general public" through the exceptional limitation of patent protection.

Duke University and Trimeris went further to argue that the authorization of a CL should be considered on its individual merits according to Article 31(a) of TRIPS: individual situation of relevant state. Such factors as economic status of Korea (OECD member state, world top 14th in GDP, world top 4th in R&D investment per GDP) and technology strength of Korea (world top 4th in PCT patent applications, world top 3rd in the number of US patent applications, and R&D activities in 488 items by 45 domestic pharmaceutical companies) should be taken into account for the "individual merits" of TRIPS Art. 31(a).

According to Duke University and Trimeris, very small group of patients who needs Fuzeon indicates no emergency. IPLeft and KANOS estimated the patients being approximately 150. In contrast, Roche Korea approximated 68 patients and only two patients have called for Fuzeon which has been provided free of charge through the Korea Orphan Drug Center.

Concerning the substitutional measure and access to medicine, Duke University and Trimeris maintained that the patients can be treated by other product such as Prezista sold by Jansen and Fuzeon has been provided free of charge by Korea Orphan Drug Center since February 25, 2009.

Fourth, Duke University and Trimeris insisted that the CL is ineffective because there is no generic and manufacturing Fuzeon is technologically too difficult. Further, granting a CL on the Fuzeon patent would only produce a harmful impact: reducing incentive to develop new pharmaceutical products and in turn hampering innovation and industrial progress.

* Relevant provisions of Patent Act:

Article 107 Adjudication for the Grant of a Nonexclusive License (1) Where a patented invention falls under any of the following subparagraphs, a person who intends to work the patented invention may request the Commissioner of the Korean Intellectual Property Office to make an adjudication (referred to as "an adjudication") for the establishment of a nonexclusive license, provided no agreement is reached despite having a consultation (referred to as "a consultation" in this Article) under reasonable conditions with the patentee or exclusive licensee on the grant of a nonexclusive license for the patented invention or a consultation is impossible to arrange; however, the person may request an adjudication even in the absence of a consultation if the patented invention is to be worked noncommercially for the public interest or in any case that falls under subparagraph (iv):
(i) where the patented invention has not been worked for more than three consecutive years in the Republic of Korea, except for natural disasters, unavoidable circumstances or other justifiable reasons prescribed by Presidential Decree;
(ii) where the patented invention has not continuously been worked commercially or industrially in the Republic of Korea on a substantial scale during a period of three years or more without justification, or where the domestic demand for the patented invention has not been satisfied to an appropriate extent and under reasonable conditions;
(iii) where working the patented invention noncommercially is necessary for the interests of the public; or
(iv) where working the patented invention is necessary to remedy a practice determined to be unfair after the judicial or administrative process
(v) where working the patented invention is necessary for the export of medicine to a country (referred to as "an importing country") that intends to import the medicine (including effective ingredients that are necessary for the production of the medicine and diagnostic kits necessary for the use of the medicine) in order to treat diseases that threaten the health of the majority of its citizens.
(2) Paragraph (1)(i) and (ii) of this Article does not apply unless a period of four years has elapsed after the filing date of the application for the patented invention.
(3) In adjudicating the authorization of a nonexclusive license, the Commissioner of the Korean Intellectual Property Office shall consider the necessity of each request.
(4) When the Commissioner of the Korean Intellectual Property Office makes an adjudication under subparagraphs (i) to (iii) or (v) of paragraph (1), the following conditions apply to the person for whom the adjudication was made:
(i) where the adjudication is made under subparagraphs (i) to (iii) of paragraph (1), the nonexclusive license must be implemented for the primary purpose of meeting domestic demand; and
(ii) where the adjudication is made under subparagraph (v) of paragraph (1), all the medicine produced under the terms of the adjudication must be exported to importing countries.
(5) The Commissioner of the Korean Intellectual Property Office shall ensure that reasonable consideration is given to every adjudication. When making an adjudication under subparagraph (iv) or (v) of paragraph (1), the Commissioner of the Korean Intellectual Property Office may consider the factors in each of the following subparagraphs:
(i) where an adjudication is made under subparagraph (iv) of paragraph (1), the need to rectify unfair transactions; and
(ii) where an adjudication is made under subparagraph (v) of paragraph (1), the economic value generated in importing countries by the working of the patented invention.
(6) For semiconductor technology, a request for adjudication may be made only in the
cases set forth in subparagraph (1)(iii) (where the noncommercial working of the patented invention is permitted in a limited way for the interests of the public) and (1)(iv).

Article 109 Solicitation of Opinion from the Intellectual Property Rights Dispute
Committee and the Heads of Relevant Authorities Before adjudicating, the Commissioner of the Korean Intellectual Property Office may solicit an opinion from the Intellectual Property Rights Dispute Committee established under Article 41 of the Invention Promotion Act and the heads of relevant authorities and seek assistance from relevant administrative authorities or interested parties.

Korean Government on the Production of Tamiflu and Relenza through Compulsory license

2009-05-01T14:16:00.005+01:00

According to a report of Yunhap News, an official in the Minister of Health and Welfare said yesterday "when Tamiflu and Relenza runs short of domestic supply, a compulsory license of patents will be issued to make possible domestic production." He added, reportedly, that upon the request of civil society groups asking to amend a compulsory license provisions of the Patent Act, they reviewed the relevant provisions and concluded that the domestic production of necessary medicines is possible by the decision of Patent Office to issue a compulsory license. In this case, 3% of sales price would be given to the patentees as a royalty.

I'm not sure this is an official position of Korean government. For the original text which is in Korean, refer to http://news.naver.com/main/read.nhn?mode=3DLSD&mid=3Dsec&sid1=3D101&oid=3D0=01&aid=3D0002636646.

Another news report on the same date, also in Korean, says that the scenario of issuing a compulsory license is just a principle story and Korean government has not specifically considered it. See http://news.naver.com/main/read.nhn?mode=3DLSD&mid=3Dsec&sid1=3D100&oid=3D2=77&aid=3D0002149279.

At the moment, the stockpile of Tamiflu and Relenza in Korea covers only 5% of population. Government plans to increase the stock to 10% by the end of this year. On the other hand, more than ten Korean pharmaceutical companies announced they had a sfficient ability to produce pharmaceutical products equivalent to Tamiflu and Relenza. It was 2005. So far only one company, Yuhan Corporation, is chosen by Roche Holdings AG, a sole and exclusive licensee of Tamiflu patent which is owned by Gilead Science, Inc. as one of the producers of Tamiflu. In reality, however, Yuhan is simply allowed to take part a portion of production of Tamiflu, which means that Yuhan has no contractual power to produce Tamiflu for the domestic supply.

Compulsory License of Tamiflu (from Gilead Report of February 2009)

2009-04-28T14:43:00.003+01:00

http://www.secinfo.com/d14D5a.s17Qe.htm

Compulsory Licenses

In a number of developing countries, government officials and other interested groups have suggested that pharmaceutical companies should make drugs for HIV infection available at low cost. Alternatively, governments in those developing countries could require that we grant compulsory licenses to allow competitors to manufacture and sell their own versions of our products, thereby reducing our product sales. For example, in the past, certain offices of the government of Brazil have expressed concern over the affordability of our HIV products and declared that they were considering issuing compulsory licenses to permit the manufacture of otherwise patented products for HIV infection, including Viread. As a result of discussions with the Brazilian government, we reached agreement with the Brazilian Health Ministry in May 2006 to reduce the price of Viread in Brazil by approximately 50%. In addition, concerns over the cost and availability of Tamiflu related to a potential avian flu pandemic have generated international discussions over compulsory licensing of our Tamiflu patents. For example, the Canadian government may allow Canadian manufacturers to manufacture and export the active ingredient in Tamiflu to eligible developing and least developed countries under Canada=92s Access to Medicines Regime. Furthermore, Roche has issued voluntary licenses to permit third party manufacturing of Tamiflu. For example, Roche has granted a sublicense to Shanghai Pharmaceutical (Group) Co., Ltd. for China and a sublicense to India=92s Hetero Drugs Limited for India and certain developing countries. Should one or more compulsory licenses be issued permitting generic manufacturing to override our Tamiflu patents, or should Roche issue additional voluntary licenses to permit third party manufacturing of Tamiflu, those developments could reduce royalties we receive from Roche's sales of Tamiflu. Certain countries do not permit enforcement of our patents, and manufacturers are able to sell generic versions of our products in those countries. Compulsory licenses or sales of generic versions of our products could significantly reduce our sales and adversely affect our results of operations, particularly if generic versions of our products are imported into territories where we have existing commercial sales.

US-Korea FTA Approved by Korean Parliamentary Committee

2009-04-22T14:45:00.002+01:00

http://www.reuters.com/article/politicsNews/idUSTRE53L16Q20090422

SEOUL (Reuters) - The South Korean parliament's foreign affairs committee approved on Wednesday a free trade deal with the United States signed two years ago, paving the way for the entire assembly to vote on the pact this month.

Amid a rowdy scene in which ruling conservative Grand National Party members physically fought off opposition lawmakers trying to stop the proceedings, the committee passed the deal, which some studies have said will boost the two countries' $78 billion annual bilateral trade by as much as a quarter.

But despite earlier expectations that the wider assembly vote would be held soon after the committee's approval, the GNP may not put the deal to a vote until June, its floor leader was quoted as saying by South Korea's Yonhap news agency.

The scene was reminiscent of a melee over the trade pact in parliament late last year, when sledgehammer-swinging opposition MPs tried to break through a barricade of office furniture and fire extinguisher-spraying ruling party legislative aides.

The agreement has broad support among members of South Korea's ruling conservative Grand National Party (GNP) and according to surveys is backed by a majority of the public.

But it could face fresh resistance from opposition MPs and the country's powerful farm lobby, who believe government compensation plans do not adequately address the losses that may hit farmers as protectionist measures are rolled back and competition intensifies.

South Korean officials have said an early passage of the bill could add pressure on the U.S. Congress to ratify the deal. Congress has yet to begin debate on the pact.

Two senior U.S. senators on Monday urged President Barack Obama to begin the process of passing the deal, which he opposed during last year's election campaign, saying approval of the pact was needed to help reinforce the United States' partnership with South Korea.

Obama called during last year's campaign for the South Korean agreement to be renegotiated to include more favorable provisions for U.S. automakers and other manufacturers.

(Reporting by Jack Kim; Editing by Jonathan Hopfner)

----------------

http://www.koreatimes.co.kr/www/news/nation/2009/04/113_43599.html

South Korea's parliamentary committee Wednesday passed a bill to ratify the government's free trade agreement with the United States, sending it to a plenary session for final approval, according to Yonhap News Agency.

The endorsement by the National Assembly's Foreign Affairs, Trade and Unification Committee came amid protests from opposition lawmakers who claim that the move is premature and that Seoul should wait until Washington becomes more favorable toward the agreement.

Seoul and Washington signed the free trade deal in June 2007, but its ratification has been delayed by opposition in both countries. It must be ratified by legislative bodies of both countries to take effect.

The FTA will knock down tariff and non-tariff barriers between the two economies whose two-way trade reached $84.7 billion in 2008, according to the Korea International Trade Association.

Patent Linkage in EU FTA

2009-04-07T14:48:00.003+01:00

http://www.europarl.europa.eu/sides/getDoc.do?type=WQ&reference=E-2009-0927&language=EN

Parliamentary Questions
17 February 2009
E-0927/09
WRITTEN QUESTION by David Martin (PSE) to the Commission

Subject: Patent linkage in the draft EU-Korea free trade agreement Answer

Article 9.9.5 of the draft EU-Korea free trade agreement (FTA) introduces patent linkage into the agreement. Patent linkage is both a TRIPs Plus provision and contrary to EC law. Patent linkage in the EU-Korea FTA may seriously hinder access to affordable medicines and indeed the Commission itself has acted against comparative provisions introduced in the EU. Can the Commission therefore elaborate on the implications of and reasons behind the incorporation of Article 9.9.5 into the draft agreement and clarify how patent linkage can be introduced into an FTA when the Commission itself does not believe it should exist in national EC law?

-----
http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2009-0927&language=EN

24 March 2009
E-0927/2009
Answer given by Baroness Ashton on behalf of the Commission

Negotiations of a Free Trade Agreement (FTA) with Korea are currently ongoing, including on a chapter with detailed provisions on Intellectual Property.

These negotiations on intellectual property have to be seen against the backdrop of other FTAs signed by the Parties, and in particular the FTA signed between Korea and the United States (US) of 30 June 2007 ('KorUS' -- of which the text is publicly available), which provides for detailed provisions related to pharmaceuticals products.

It follows from KorUS that Korea should in principle introduce 'patent linkage' in its legal system. The question of patent linkage being a topic of intellectual property, it has been raised in the discussions between the Commission and Korea, in line with the Commission's overall approach in FTA negotiations to ensure that our FTA partners do not discriminate our economic operators as compared to those of third countries. If and when Korea were to undertake commitments on this issue vis-=E0-vis another trading partner, as is the case with the US, EU companies should in principle also benefit from such commitments.

The Honourable Member is right in pointing out that EU rules do not provide for patent linkage. This is not the Commission's intention to introduce a change of EU rules or EU policy on patent linkage through the FTA with Korea.

The intellectual property aspects of the EU-Korea FTA negotiations are still underway, and the Commission can not, at this stage, prejudge the final outcome of these, which are conducted with the objective of reaching a balanced agreement, taking into account the diverse interests at stake.

EC Report - IPRs & Climate Change

2009-03-13T14:09:00.002Z

Executive Summary

Access to technology for reducing greenhouse gas emissions is important for developing countries to help them address the challenges of climate change. The innovative technologies in this domain have become increasingly patented. In international climate change debates in the run-up to the 2009 Copenhagen Summit on Climate Change, the developing countries have regularly claimed that this strong presence of intellectual property rights on carbon abatement technology, owned by the developed countries, constitutes a major barrier to developing economies' greenhouse gas abatement efforts. The purpose of this study is to examine the validity of this claim. It traces patent protection and ownership data for seven relevant emissions-reducing energy technologies in a representative sample of low-income developing countries and emerging market economies, over the period 1998-2008.

[SNIP]

This leads to the conclusion that patent rights can not possibly be an obstacle for the transfer of climate change technologies to the vast majority of developing countries:
there are hardly any patents on these technologies registered in these countries. A relaxation of the property rights regime for the relevant technologies in these countries would not improve technology transfer to these countries.

[SNIP]

The reasons for an alleged insufficiency (if any) in the transfer of technologies to lowincome developing countries should thus be sought elsewhere: insufficient technical knowledge and absorption capacity to produce these innovative technologies locally, insufficient market size to justify local production units, and insufficient purchasing power and financial resources to acquire the innovative products. Solutions, if needed, should be sought in policies that aim to overcome these insufficiencies. Even without access to technology, some domestic policies could have a high direct pay-off, for instance a reduction in energy subsidies that reduce the private incentive to deploy cheap but effective abatement technologies. Grant subsidies from developed countries to encourage developing countries' access to specific IPR-protected carbon abatement technologies may actually distort the market and result in the acquisition of not very cost effective carbon abatement technology. Instead, support should compensate low-income developing countries for the overall economic burden of carbon abatement while preserving the countries' incentive to minimise the costs of that abatement.

Abuse of Copyright Criminal Enforcement

2009-02-24T23:05:00.001Z

In many jurisdictions, criminal enforcement of IP provisions plays a
subordinate role in practice than civil enforcement. However, this
would not be the case in the jurisdictions where the criminal sanction
on copyright infringement does not require a "commercial scale." I
hardly believe the requirement of "commercial scale" makes things
different if it is defined so broadly as to cover any acts "for
purposes of commercial advantage or private financial gain" (like
ACTA) and the financial gain is defined to include "receipt or
expectation of anything of value." (e.g., Art. 18.10:26, FN 33 in
US-Korea FTA).

According to a press release last week by the Korea Supreme
Prosecutors' Office, the number of criminal complaints based on the
copyright infringement has skyrocketed to 90,979 in 2008 from 25,027
in 2007 and 18,227 in 2006 (see Table below). Among these figures,
juveniles are revealed to be an ever increasing target of the criminal
enforcement. Now copyright infringement becomes one of the most
frequently occurred cases in cases of violation of economic laws.

IIPA would argue that this is due to "the ubiquity of online
infringement throughout Korea's highly networked digital marketplace."
(IIPA's 2008 Special 301 Report). However, this explanation fails to
provide an account for the rapid increase in 2007 and 2008, and
especially for the faster rise of juvenile cases. To my view, the main
reasons of the increase are twofold.

First, regardless of purpose or scale, any unauthorized acts of
reproduction or distribution of copyrighted works may invoke a
criminal liability under the Korea Copyright Act. This paves the way
to abuse or misuse of criminal enforcement.

Second, the copyright holders (mainly music and film industries) and
law firms acting for them actually misused the enforcement provisions.
They send letters to suspected individuals (mostly Internet end users)
threatening a criminal action. In exchange of not taking the criminal
action, they ask a cash settlement. Copyright holders are capable of
using the threat of criminal action as leverage for the settlement
negotiation as the initiation of criminal procedure is subject to a
complaint by the rightholder. Presumably, more than 80% cases have
been solved by the cash settlement, which means that the complaints
received by the Prosecutors' Office should be multiplied by four or
five when counting the number of the abusive threat.

As clear from the Table below, most of the complaints are decided by
the Prosecutors not to prosecute (20 times more than the cases
actually brought to the court). This indicates that most of the threat
of criminal sanction is abusive and misused. For instance, Mr. Cho
(31) received a letter from the police simply because he used one
piece of music for his blog. He was requested to pay one million KRW
for the settlement with a law firm which was unclear to legitimately
represent the copyright holder. There are lots of instances similar to
the Cho's case. One tragic example is Song's case. He was a high
school student and got a summon from the police about his downloading
online novels. Being fearful of punishment, he committed suicide in
November 2007.

Year	2006	2007	2008
Complains (Total)	18,227	25,027 (+137%)	90,979 (+364%)
Complaint (Juveniles)	611	2,832 (+464%)	2,3470 (+829%)
Decision of the Prosecution
- Indictment	1,496	1,663 (+111%)	4,003 (+240%)
- Non-Prosecution Disposition	15,640	21,808 (+139%)	83,862 (+385%)
- Etc. (incl. Stay of indictment)	1,767	1,508 (-15%)	3,150 (+209%)
Source: The Korea Supreme Prosecutors' Office, Press Release, Feb. 2009 - http://www.spo.go.kr/user.tdf?a=user.board.BoardApp&c=2002&seq=716&board_id=sppo_press&cp=1&pg=1&npp=10&catmenu=020201&chungcd=01000000

As one of the ways to solve this problem, the Korean government
launched an online campaign for cleaning up the Internet. The site
(www.portalcopyright.com) run by the Minister of Justice in
collaboration with major Internet portals is decorated with slogans
"don't copy," "don't download," and "don't edit."

Entangled Web of Patents on Fuzeon

2008-10-26T15:17:00.005Z

Some argue that, unlike in IT industries, patent thickets are not problematic in pharmaceutical industry because the number of patents on a particular medicinal product is low. However, Fuzeon (enfuvirtide) shows an entangled web of patents, which may lead to high information costs in searching patents and getting licenses from patentees.

1. Orange Book

US FDA's Orange Book shows only three patents that cover Fuzeon:

(1) USP 5,464,933 "Synthetic peptide inhibitors of HIV transmission" (filing/priority date June 7, 1993);
(2) USP 6,133,418 "Synthetic peptide inhibitors of HIV transmission" (This is a division of application of '933 patent); and
(3) USP 6,475,491 "Treatment of HIV and other viral infections using combinatorial therapy" (This application is the US national phase of international application No. PCT/US96/09499, filed June 6, 1996 which is a continuation-in-part of US application No. 08/481,957 filed June 7, 1995 now abandoned.)

First two patents ('933 and '418) were granted to Duke University and the third one ('491) is owned by Trimeris. For the first '933 patent, US Federal Government has certain rights. However, there is no indication of US government interest for its division patent '418.

2. EPO INPADOC

European patent database retrieves at least nineteen (19) US patents/applications as family patents of the '933 patent. Some of them are child continuity patents/applications of '933 patent. The family patents are owned by Trimeris or Duke University or jointly. One patent ('395) is owned by individual inventors.

(1) USP 6,013,263 Measles virus peptides with antifusogenic and antiviral activities (Trimeris)
(2) USP 6,017,536 Simian immunodeficiency virus peptides with antifusogenic and antiviral activities (Trimeris)
(3) USP 6,054,265 Screening assays for compounds that inhibit membrane fusion-associated events (Trimeris)
(4) USP 6,060,065 Compositions for inhibition of membrane fusion-associated events, including influenza virus transmission (Trimeris & Duke)
(5) USP 6,068,973 Methods for inhibition of membrane fusion-associated events, including influenza virus (Trimeris)
(6) USP 6,093,794 Isolated peptides derived from the Epstein-Barr virus containing fusion inhibitory domains (Trimeris)
(7) USP 6,228,983 Human respiratory syncytial virus peptides with antifusogenic and antiviral activities (Trimeris)
(8) USP 6,333,395 Compositions for inhibition of membrane fusion-associated events, including human parainfluenza virus transmission (BARNEY SHAWN (US); LAMBERT DENNIS (US))
(9) USP 6,440,656 Methods for the inhibition of respiratory syncytial virus transmission (Trimeris)
(10) USP 6,479,055 Methods for inhibition of membrane fusion-associated events, including respiratory syncytial virus transmission (Trimeris)
(11) USP 6,518,013 Methods for the inhibition of epstein-barr virus transmission employing anti-viral peptides capable of abrogating viral fusion and transmission (Trimeris)
(12) USP 6,824,783 Methods for inhibition of membrane fusion-associated events, including HIV transmission (Duke)
(13) USP 6,951,717 Methods and compositions for inhibition of membrane fusion-associated events, including HIV transmission
(14) US 2004052820 A1 Fusion proteins comprising DP-178 and other viral fusion inhibitor peptides useful for treating aids (Duke & Trimeris)
(15) US7273614 B2 Nucleic acids encoding DP-178 and other viral fusion inhibitor peptides useful for treating aids (Duke)
(16) US2004033235 A1 Nucleic acids encoding DP-178 and other viral fusion inhibitor peptides useful for treating aids (Duke)
(17) US2007037141 A1 Methods and compositions for inhibition of membrane fusion-associated events, including HIV transmission (Trimeris)
(18) US2007202123 A1 Fusion proteins comprising DP-178 and other viral fusion inhibitor peptides useful for treating aids (Duke)
(19) US2007202127 A1 Nucleic acids encoding DP-178 and other viral fusion inhibitor peptides useful for treating aids (Trimeris)

3. License Agreement between Duke University and Trimeris

According to the license agreement of February 3, 1993 (http://www.secinfo.com/dsVsn.81Py.d.htm, of which the licensee SL-1 Pharmaceuticals, Inc is an original corporation of Trimeris), Duke University granted a worldwide exclusive license to Trimeris. Trimeris issued to the Duke University 820,000 shares of stocks in lieu of any royalty (Art. 3.01).

The license agreement specifies one invention - a US patent application No. 07/916,540 entitled "compounds which inhibit HIV replication" and filed on 20 July 1992. This application was abandoned but its continuation application was granted USP 5,656,480 and USP 6,573,078, which are neither contained in Orange Book nor retrieved from family patents of EPO INPADOC.

4. License Agreement between Trimeris and Roche

In 1999 and 2000, Trimeris reached an agreement to grant to Roche an exclusive, worldwide license for FUZEON and certain other peptide compounds in the field of HIV. Under the license agreements, Trimeris agreed to share development expenses and profits for FUZEON and certain other compounds, in the United States and Canada equally with Roche. Outside of the United States and Canada, Roche agreed to fund all development costs and pay Trimeris royalties on net sales of FUZEON and the other compounds. Through a series of amendments to the license agreements, Roche became responsible for all decisions regarding future FUZEON manufacturing volume, including management of the inventory supply chain.

The agreements between Trimeris and Roche are kept confidential and patent information involved is unknown.

5. License Agreement between Trimeris and New York Blood Center

New York Blood Center (NYBC) granted to Trimeris an exclusive, worldwide, royalty-bearing license for patents relating to certain HIV peptides. Under this license, Trimeris is required to pay the NYBC a royalty of 0.5% of net sales of FUZEON until $100 million of net sales is attained, after which the royalty reduces to 0.25%. The obligation to pay royalties to the NYBC ends on August 22, 2012.

According to NYBC, "in early 1990s, Dr. Jiang and colleagues discovered the first anti-HIV peptide derived from the HIV-1 gp41 C-terminal heptad repeat region. The patents on this discovery were licensed to Trimeris Inc., a pharmaceutical company which, in partnership with F. Hoffmann-La Roche Ltd., has developed a peptidic anti-HIV drug, Fuzeon." See http://www.nybloodcenter.org/research/index.do?sid0=7&sid1=32&page_id=31&content_id=91.

USPTO's database reveals ten patents of which Dr. Jiang is one of the inventors and NYBC is an assignee.

7,241,803 Compounds for inhibition of HIV infection by blocking HIV entry
6,727,240 Methods for preventing HIV-1 or HIV-2 infection
6,596,497 Screening of antiviral compounds targeted to the HIV-1 gp41 core structure
6,165,493 "Methods and compositions for decreasing the frequency of HIV, herpesvirus and sexually transmitted bacterial infections"
5,985,313 Method for decreasing the frequency of transmission of viral infections using cellulose acetate phthalate or hydroxypropyl methylcellulose phthalate excipients
5,985,275 .beta.-Lactoglobulin modified with aromatic anhydride compound for preventing HIV infection
5,952,009 Methods for preventing the transmission of or treating patients infected with herpesvirus
5,840,843 Synthetic polypeptides as inhibitors of HIV-1
5,798,206 Methods for screening of test compounds for inhibiting binding of a CD4-HIV 1 complex to a chemokine receptor
5,444,044 Synthetic polypeptides as inhibitors of HIV-1

6. Dispute between Novartis (Novartis Vaccines and Diagnostics, Inc.) and Trimeris/Roche

On November 2007, Novartis filed a patent infringement suit against Trimeris and Roche. Complaint of Novartis is based on its US Patent 7,285,271. See http://www.patentdocs.typepad.com/patent_docs/files/novartis_v_roche.pdf.

The '271 patent has a long history of continuation applications. The USPTO's Patent Application Information Retrieval system shows the '271 patent "is a Continuation of 08/083,391 06-28-1993 Patented 6,458,527; is a continuation of 07/931,191 08-17-1992 Abandoned; is a Division of 07/138,894 12-24-1987 Patented 5,156,949; is a Continuation-in-part of 06/773,447 09-06-1985 Abandoned; is a Continuation-in-part of
06/696,534 01-30-1985 Abandoned; is a Continuation-in-part of 06/667,501 10-31-1984 Abandoned." [Unfortunately, published document of the '271 patent contains incorrect information on the related US patent documents.]

Surprisingly enough, the first parent application of '271 patent was filed twenty-four years ago.

ACTA and Ladder

2008-09-15T15:23:00.002+01:00

"ACTA is anther name of "kicking away the ladder" with which the industrialised nations climbed to the top.

During the debate of Patent Act of 1790, Richard Wells argued that Americans should not be deprived of the advantage of imitating any of the English invention. This argument prevailed in the US House, and patent on "imported technologies" became
prohibited. This policy objective was invigorated by discrimination of foreign inventors in the US statute lasted for about 70 years from 1793."

Summary of Korea-US FTA (Health Related)

2007-04-17T18:54:00.001+01:00

This summary is based on the press release of South Korean Government (SKG) on the conclusion of FTA negotiations with US. The released materials by SKG are all in Korean, and thus my translations of some terminologies and expressions may be different from the actual English text.

1. Drug Pricing and Reimbursement System under National Health Insurance

Demands of US include assurance of the minimum price (such as A-7 average price) of new drugs; introduction of price negotiation process for generic drugs; future adjustment of reimbursement price in consideration of inflation; withdrawal of SKG's plan to lower the price of off-patent drug to 80%; and putting off evaluation of
cost-effectiveness of drug.

SKG said it denied all of the demands and the final text does not contain such demands. However, I do not know how the positions of SKG are reflected in the text.

As I know, general principles include "to recognize the value of patented medicine [actual English text may have different expression]." What I am concerned is that the meaning of "value of patented medicine" is unclear and the pharmaceutical companies may argue the value of patented drugs is ignored when Korean government
cuts the price in the negotiation process between SKG and the pharmaceutical companies.

2. Transparency

2-1. Independent review process

It is agreed to accept the US demand to establish an independent review process in which a body independent from a national health organization reviews decisions of the organization regarding the price and reimbursement. SKG argues that the independent body has no authority to overturn the original decision.

However, as I heard, there is no written agreement on the "no authority to overturn the original decision."

2-2. Dissemination of Information

It is agreed to permit a pharmaceutical company to disseminate information regarding its pharmaceutical through the Internet linked to the company's website.

3. Pharmaceutical and Medical Devices Commission

SKG uses the term "commission" rather than working group. The mandate of the commission includes review of the implementation of agreement and promotion of mutual understanding of the agreement.

4. Intellectual Property Rights

4-1. Patent Term Extension Due to Approval Delay

It is agreed to provide a patent term extension to compensate for delays in drug approval process. When the drug is imported drug, the delay in exporting country may be excluded.

However, it is not clear if the exporting country includes US and Korea. And there is no limitation on the maximum period of the extension.

4-2. Patent Term Extension Due to Delay in Granting Patent

It is agreed to allow a patent term extension in case of delays in granting patent more than three years from the request of patent examination.

4-3. Data Exclusivity

US demanded the market exclusivity on data submitted for approval. SKG accepted this demand as SK has provided 6-year protection for new drug since 1995.

As I know, the data exclusivity covers "same and similar product" in both 5-year and 3-year exclusivity and the languages are quite similar to the AU-US FTA.

4-4. Compulsory License

There is nothing with respect to the grounds of compulsory license of patented invention. I heard that US withdrew its demand to narrow the grounds.

4-5. Approval and Patent Linkage

It is very likely that the agreed text on the linkage is quite similar to AU-US FTA.

According to the explanation of SKG, US demanded the inclusion of automatic stay of approval of generic manufacturer's application in case of a patent infringement action by a patent holder, but SKG denied. [I can not understand this position.] SKG further explains that SKG may introduce an automatic 9-month or 4-month stay rather
than 30-month stay in US law. The 9-month or 4-month stems from the time span from the filing of preliminary injunction to a court decision. However, SKG has no data on the average period in court decisions in civil actions (not the preliminary injunction) of pharmaceutical patent infringement.

4-6. Bolar Provision

As I know, the Bolar provision included in the FTA text does not replace or exclude the broader exception for research and experimental use of a patented invention under current Korean Patent Act.

U.S. government pushed Korea to drop new drug policy

2006-07-20T20:28:00.000+01:00

U.S. government pushed Korea to drop new drug policy
Written by Heeseob Nam (hurips@gmail.com)
July 21, 2006
http://www.bilaterals.org/article.php3?id_article=5315

Alexander Vershbow, U.S. Ambassador to the Republic of Korea, visited Korean Ministry of Public Health on July 19 and had a meeting with Korean Minister (Mr. Yoo). On July 18, Mr. Vershbow requested the meeting and the purposes of his visit are to deliver U.S. government’s concerns on the drug pricing policy of Korean government. On May, the Korean government announced to reform its drug pricing policy of the national healthcare system by adopting measures to positively list reimbursable prescription drugs rather than the current “negative list”, which only lists the exclusions. During the second round of the KORUS FTA, the US negotiators expressed its strong opposition to the positive list system and refused to attend the Pharmaceutical and Medical Device Working Group meeting.

Reportedly, Mr. Vershbow strongly argued that the positive list system should be reconsidered since it would strike a blow to transnational pharmaceutical companies. After the meeting, Mr. Vershbow told a pressman that “Very constructive discussion. We both share common interests in putting FTA talks back on the track. … We also believe that it is important for foreign pharmaceutical companies to have a playing field in Korean market.”

Many Koreans believes this is an intervention of domestic affairs and pressure upon Korean government to withdraw the introduction of beneficial new drug policy. Before his trip to the U.S. this weekend, Mr. Vershbow tried to deliver his government’s position to Korean government on one hand and seek possible ways to get much fruits in the FTA negotiations on the other hand.

It is revealed that in the meeting Mr. Vershbow expressed “conditional acceptance” of the positive list system. Reportedly, he told that if the Korean government delays the implementation of the policy and has further discussions for the details with the U.S., the positive list system would be allowed to implement. This double-faced strategy shows that the intention of the U.S. lies in getting more concessions from Korean side in the KORUS FTA negotiation, which include stronger protection of intellectual property rights on pharmaceuticals. Korean Minister of Public Health showed the possibility of compromise by saying “If the U.S. brings up reasonable proposals, I would consider them as faithfully as possible.”

According to Korean government’s plan, legislation steps will be taken next week for the implementation of the positive list system. Official announcements from the Korean government are only focused on defending the positive list system without mentioning anything about another key issues that would be impaired by the compromise.

* For Korean NGO Statement on the positive list system and negotiation of 2nd round of the KORUS FTA, refer to http://www.bilaterals.org/article.php3?id_article=5313

** For an official speech of Mr. Vershbow on the KORUS FTA, refer to http://korea.usembassy.gov/the_korus_fta.html

Korean Civil Societies Statement on 2nd Round of Korea-US FTA Talks

2006-07-20T20:27:00.001+01:00

Korean Civil Societies Statement on 2nd Round of Korea-US FTA Talks

- What the Korean government should take away from the crippled talks of 2nd round is not to withdraw certain negotiating teams but to stop the negotiation itself -

The second round of FTA talks between Korea and United States ended on July 14, 2006 with cancellation of the final day’s entire schedule. In the second round, drug pricing policy of the Korean government became the central issue. The Korean government announced to reform its drug pricing policy of the national healthcare system by adopting measures to positively list reimbursable prescription drugs rather than the current “negative list”, which only lists the exclusions. This positive list system was planned on May 2006 and is expected to take effect on September 2006 when the third round of the KORUS FTA talks will be held in Seattle.

The US negotiators refused to attend the Pharmaceutical and Medical Device Working Group meeting from July 11 and expressed its strong opposition to the positive list system. Wendy Cutler, Assistant USTR and chief American negotiator, blamed that the system “can be used to discriminate against innovative drugs,” which are usually supplied by U.S. and thereby “limit the access of Korean patients and doctors to most innovative drugs in the world.” Subsequently, the U.S. negotiating teams did not attend the sessions for trade protection and service sectors and Korean side followed suit on Friday by canceling the meetings for commodity trade and environment.

We would first like to discuss the actions of both Korean and U.S. governments towards the new drug pricing policy planned by Korean government. The positive list system has been in operation in many OECD countries. If it discriminates against innovative drugs and limits patients’ access to these innovative drugs, the positive list system would already be abolished and failed to exist. However, the potential problems that the U.S. chief negotiator argued did not occur in any countries. The U.S. position on the positive list system is motivated by its aim to keep high prices on drugs supplied by U.S. pharmaceutical companies and ignores constitutional obligation of Korean government to implement comprehensive and systematic policies to maintain public health. In this regard, the U.S. government deserves reproach.

However, the Korean government should be the focus of greater criticism since it provided an excuse. Before the official launch of KORUS FTA this February, the Korean government made a promise the U.S. to address, as a precondition of the KORUS FTA, four areas of concern to the U.S.: beef; automobiles; pharmaceuticals; and screen quotas. With respect to the pharmaceuticals, Korean government agreed at the trade action agenda meeting last October, that no new drug reimbursement pricing policies would be introduced in the near future. Further, Korean government promised to set up an independent mechanism under which pharmaceutical companies could appeal the drug reimbursement decisions.

We view the actions of both governments’ negotiators to be intentional performances to disguise the substantive issues surrounding the problem. To the U.S. negotiators the Korean government’s pharmaceutical drug policy becomes the weapon for obtaining another greater concessions from the Korean side during the next round of talks. The U.S. pharmaceutical companies, even under the positive list system, has the power to file a suit against the Korean government through investor-government dispute and/or non-violation provisions after the KORUS FTA becomes effective. Reportedly, both sides have agreed to the investor-government dispute provision and as such the U.S. pharmaceutical companies may claim damages from the Korean government and request for abolishment of the positive list system. Further, when Korean side concedes to accept the U.S. request to introduce patent term extension and independent appeal system in drug pricing process, the positive list system loses its effect. Moreover, the U.S. pharmaceutical company, usually a patent holder for the drugs, is a single producer and the Korean government’s power to negotiate the drug price would be limited. In addition, the independent appeal system would further weaken the negotiating power of the Korean government. Therefore, the strong opposition displayed by the U.S. to the positive list system is merely negotiating strategy and tactic to gain more leverage in order to intervene on such matters as Korean drug policy and obtain term extension on drug patent, and linkage between patent and drug approval process from Korean side.

Likewise, the action of the Korean government is nothing more than fabricated performance. The Korean government has already agreed to protect intellectual property right holders as the investors, which would certainly weaken the effective function of the positive list system. During the second round, tens of thousands citizens intensely protested against the KORUS FTA, and public opinion in Korea took a turn from pro-FTA. The Korean government’s action to cancel the final day’s meeting was to appease the public and nothing more.

The dramatic performance staged by both sides clearly reveals the presence of significant problem in connection with free trade talks, as the nation’s public policy such as national healthcare system becomes a political pawn subject to trade negotiation. This will happen regularly when the proposed KORUS FTA is signed. Free trade agreement, in particular the KORUS FTA, would allow every public policy to be controlled by business interests. The shows played by both governments should be stopped. The business interests cannot take precedence over public interests.

July 14, 2006

Association of Korean Doctors for Health Rights
Association of Physicians for Humanism
Health Right Network
IPLeft, Intellectual Property Left
KANOS, Korea HIV/AIDS Network of Solidarity
Korea Dentists Association for Health Society
Korea Leukemia Patients Group
Korea Social Insurance Trade Union
Korean Federation of Medical Groups for Health Right
Korean Pharmacists For Democratic Society
Korean Progressive Network ‘Jinbonet’
Nanuri+ HIV/AIDS Human Rights Advocacy Group of Korea
Public Pharmaceutical Center
Solidarity for Worker’s Health

Who Gains from TRIPS Agreement

2006-07-17T18:22:00.001+01:00

Source: Global Economic Prospects and the Developing Countries (2002), Chapter 5 Intellectual Property: Balancing Incentives with Competitive Access, at Page 133

The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433

[Quotation]

Yang and Maskus (2001) studied technology licensing. The figures in the last column of table 5.1 update their results of estimating the impacts of international variations in patent rights on the volume of unaffiliated royalties and licensing fees (a measure of arm’s length technology transfer) paid to U.S. firms. Japan had a large absolute response, reflecting the importance of licensing in the Japanese economy.

However, large impacts were also discovered in the Republic of Korea, Mexico, Brazil, and Indonesia. Indeed the analysis suggested that licensing volumes would double in Mexico and India, and would go up by a factor of nearly five in Indonesia.

Balance of patent royalties and license fees

2006-07-17T18:18:00.001+01:00

Korean Balance of (Patent) Royalties and License Fees (Million USD)

Year
2006
January -95.3
February -83.0
March -235.2
April -188.8
May -107.3

2005 -2571
2004 -2584.8
2003 -2258.8
2002 -2166.9
2001 -2129.4
2000 -2533
1999 -2205.9
1998 -2109.2
1997 -2161.5
1996 -2245.6
1995 -2085.6
1994 -1565
1993 -1284.8
1992 -1523.7
1991 -1520.8
1990 -1327.3
1989 -1100.2
1988 -772.7
1987 -564
1986 -457.3
1985 -319.6
1984 -260.8
1983 -166
1982 -158
1981 -86.8
1980 -99

Direct Import of Medicines and Patent

2006-07-17T17:16:00.001+01:00

Written by Heeseob Nam on December 2002

1. Direct Importation and Related Regulations

According to the Foreign Trade Act, any person who intends to import goods needs to obtain an approval (import license) from the Minister of Commerce, Industry and Energy[1] (MCIE). However, exemption from the import license requirement is provided under the Foreign Trade Act if the goods to be imported are self-treatment drugs for a patient and the patient obtains a recommendation from the Commissioner of the Korea Food & Drug Administration[2] (KFDA) (Article 14(2) [3] of Foreign Trade Act, Article 27 of Presidential Decree of Foreign Trade Act, and Article 7-3 of Foreign Trade Administration Rule (Public Notice No. 2001-137 of the MCIE)).

Further, under Article 34 of the Pharmaceutical Affairs Act, any person who intends to import drugs needs to obtain approval for each drug from the KFDA or file a report with the Korean Association for Drug Imports and Exports[4] (KPTA) and then submit a Plan for Customs Entry Report to the KPTA. However, when the importation is for the purpose of a patient’s self-treatment, the above requirements are exempted.

In order to obtain exemption for a self-treatment drug, a patient must submit an application to the mayor’s office or the provincial governor’s office having jurisdiction over the hospital at which the patient is receiving treatment, or the Korea Orphan Drug Center. The application needs to be accompanied by the following documents: Recommendation Application for Exemption of Drug Importation Approval; and Medical Certificate issued by a national hospital, public health center, or medical institution as prescribed under Article 3(2) of the Medical Care Act.

In the Recommendation Application, the consignor, origin, HS code[5], description/size, unit/quantity, unit price, and amount of the drug must be clearly stated, and in the Medical Certificate, the name of the drug, usage and dosage for self-treatment must be stated.

2. No Legal Restrictions on the Type of Drugs for Direct Importation

According to the official responses of the Ministry of Health & Welfare[6] (MHW) and the KFDA[7] to our civil petition, there are no restrictions on the type of drugs and it is not necessary that the imported drug be officially approved and marketed in the exporting country for the exemption. In other words, even if the drug is patented in Korea or the drug is recognized as a new and innovative orphan drug, the recommendation for exemption is possible. Further, even if the exporting country does not verify the safety and efficacy of the imported drug, the recommendation can be issued only with the Medical Certificate. Please note that despite above mentioned no-legal restrictions, we need to conduct our own evaluation as to the safety and efficacy of your product.

In principle, drugs exempt from the import approval requirement must be self-treatment drugs having a value of less US$ 2,000. However, in case of drugs for ailments that require a specified treatment period, the import value may exceed US$ 2,000 if the minimum treatment period and drug quantity is specified. The US$ 2,000 limit will also not apply in cases where drugs are imported for two persons or more and each person's drug prescription is attached to the import approval exemption application.

3. Patentee Unable to Block Customs Clearance of Directly Imported Drugs

According to Article 235 of the Customs Act, an owner of a copyright or a registered trademark may request the Commissioner of the Korea Customs Service[8] (KCS) to withhold customs clearance of any allegedly infringing goods. However, the Customs Act has no such provision applicable to patent infringing goods.

According to the official position of the KCS, the Commissioner does not permit the withholding of customs clearance based on a claim by a patentee that a certain shipment of goods entering Korea infringes such patentee’s patent rights. The reason for such different treatment is that unlike copyright or trademark infringement cases, it is not readily determinable whether a good infringes a patent. Therefore, to stop customs clearance of allegedly patent infringing goods, the patentee can only rely on formal court proceedings for the issuance of an injunction. However, in the case where drugs are directly imported by patients, the patentee may not even rely on formal court proceedings to prevent importation because, as more fully explained below, the act of directly importing patent infringing products for non-commercial or non-industrial purposes does not constitute patent infringement.

4. Direct Importation By Patients Does Not Constitute Patent Infringement

Unless permission is received from the patentee, the act of importing a patented drug into Korea for industrial or commercial purpose constitutes an infringement of the patent for such drug registered with the Korean Intellectual Property Office[1] (KIPO). Since Glivec is a patented drug (Patent No. 261366) owned by Novartis AG of Switzerland and a compulsory license for the Glivec patent has not yet been issued to the petitioners (People’s Health Coalition for Equitable Society, Association of Physicians for Humanism, and Korean Pharmacists for Democratic Society), anyone who imports a Glivec-like drug for supply to a third party (e.g., CML patient) will be liable for patent infringement.

Article 94 of the Patent Act provides that “a patentee has an exclusive right to work a patented invention both commercially and industrially.” The terms “commercial” and “industrial” for purposes of the Patent Act do not necessarily mean a for-profit activity and hence the importation by NGOs, even if it is for a non-profit purpose, may constitute a patent infringement. However, an individual’s working of a patented invention (e.g., purchasing a patented drug by a patient) is not an infringing act since it is neither commercial nor industrial. Therefore, the legal importation of your product should be made directly by the patients themselves. The Petitioner for the compulsory license will not be able to legally import your product for distribution to patients until they obtain the compulsory license from the KIPO.

[1] http://eportal.kipo.go.kr:8581/home/portal/ehtml/index.jsp
[1] http://www.mocie.go.kr/english/home/default.asp, Trade Policy Division; Tel +82-2-500-2366 Fax: +82-2-502-1754
[2] http://www.kfda.go.kr/english/english.html
[3] Any person, who intends to export or import goods designated by the Minister of Commerce, Industry and Energy in order to perform duties in accordance with treaties concluded and promulgated under the Constitution of the Republic of Korea and the generally accepted international laws and regulations as well as to preserve living resources, shall obtain the approval of the Minister of Trade, Industry and Energy; provided, that this shall not apply to the export and import of goods satisfying the standards as prescribed by the Presidential Decree, such as goods, the export or import of which is urgently required, or other goods the export or import procedures of which need to be simplified.
[4] http://www.kpta.or.kr/ According to the report of the KPTA, importation of medicine from India is US$ 32,099,918 including final product of US$ 48,568 from 1957 when the KPTA was established.
[5] Harmonized Commodity Description and Coding System
[6] http://www.mohw.go.kr/english/index.html
[7] KFDA Officials: Mr. Sang-yeul Lee (Tel: +822-380-1824, Fax: +822-359-6965, Email: sangyeul@kfda.go.kr) or Mr. Sang-Bong Kim (Tel: +822-380-1824)
[8] http://www.suctoms.go.kr/

Statement against Korea US FTA

2006-07-16T15:22:00.001+01:00

NGO's Joint Statement Against KORUS FTA

We say NO to FTA, which threatens people's health right

People's health is under threat.

Neo-liberal globalization is the keyword explaining the current global political and economic system. Its policies and orders, implemented through multinational as well as bilateral or regional trade agreements, deterioratepublic interest and deprive the people of their rights to access to public service in the name of Free trade. FTA aims to promote privatization and commercialization of essential services such as health care, education, culture, electricity, water, and every aspects of life. As a result, it restricts access to medicine and threatens food security and safe environment.The proposed KORUS FTA contains provisions that put profit of transnational corporations (TNCs) ahead of people's health right. These are the reasons why we say No to KORUS FTA.

1. FTA facilitates privatization and commercialization of public services including healthcare system

We believe that everyone has the right to health service such as prevention, treatment and rehabilitation based on one's needs. Commercialization of health service and privatization of public health facilities restrict people's access to proper health care. Approving profit hospitals and private health insurance system undermines the national healthcare system which has been mandatory in Korea. We oppose the KORUS FTA as it undermines the healthcare system as public goods.

2. TRIPS plus provisions seriously restrict people's access to medicine

Every nation is responsible to ensure its people to access medicine at affordable price. FTAs seriously block people's access to medicine by forcing various measures to strengthen patent and intellectual property protections on medicine. For instance, linkage between patent and drug approval, patent term extension for examination delay, exclusive right on drug approval data, expanding patentable subject matter, limiting the circumstances under which compulsory license may be issued, and prohibiting parallel import would restrict the entry of generic competitors and undermine the ability to access to medicine at affordable price. We are also concerned of other measures such as A-7 average price for innovative drug used to raise the drug price and serve to benefit patent owners. We demand that any measures that restrict compulsory licensing and parallel import against the spirit of Doha Declaration on TRIPS Agreement and Public Health should be stopped.

3. FTA threatens the safety of food and water

We believe that water is a common resource that everyone has the right to get access. Also, safety should be the priority concern in food trading. We worry that the decision to restart import of beef that is not safe from mad cow disease is made by Korean government simply because beef was considered as a barrier to FTA talk. It should have been based on medical and epidemiologic evidence provided by independent party. The agreements on SPS(Sanitary and Phytosanitary Measures) & TBT(Technical Barriers to Trade) should not be used as measures to promote export against people's health. Thus we oppose KORUS FTA that privatize water; reach agreements on SPS & TBT that threatens health; and decide import of beef on political basis.

4. The investor-to-government claim system can infringe on government's duty and right to protect public goods.

We have witnessed many cases that investor-to-government claim system seriously infringes on people's right to health, safe environment, and public security system. Under NAFTA, Ethyl and UPS claims against government showed that public health policy could be ruined for the profit of corporations. We also know the case that the attempt of New Brunswick state government to introduce a policy to improve public health system was set back by an investor's claim. Therefore we oppose the KORUS FTA that contains provisions of investor-to-government claim system.

Any international agreement, bilateral and regional trade agreements should not contain provisions that adversely affect people's health status. We conclude that KORUS FTA would infringe on people's health right. Also we conclude that it will be a barrier to the global movement to enforce people's health right. Thus, we oppose KORUS FTA, and ask individuals and organizations all over the world to join our action.

22 June, 2006

건강권실현을위한보건의료단체연합 (Korean Federation of Medical Groups for Health Right)
건강사회를위한약사회 (Korean Pharmacists For Democratic Society)
건강사회를위한치과의사회 (Korea Dentists Association for Health Society)
건강세상네트워크 (Health Right Network)
공공의약센터 (Public Pharmaceutical Center)
공익제보자와 함께 하는 모임기독청년의료인회 (Christian Medical Association for People Health)
노동건강연대 (Solidarity for Worker's Health)
다산인권센터 (Dasan Human Rights Center)
문화연대 (Cultural Action)
미디액트 (MEDIACT)
민주사회를위한변호사모임 (MINBYUN-Lawyers for a Democratic Society)
언론개혁기독교연대 (Christian Coalition for Media Reform)
원불교인권위원회 (Won Buddhism Committee for Human Rights)
의료소비자시민연대 (Consolidation for Medical consumer)
이윤보다 인간을 (People before Profit)
인도주의실천의사협의회 (Association of Physicians for Humanism)
전국농민회총연맹 (Korean Advanced Farmers Federation)
전국병원노동조합협의회 (Korea Hospital Union Association)
전국보건의료산업노동조합 (Korea Health and Medical Workers Union)
전국사회보험노동조합 (Korea Social Insurance trade Union)
정보공유연대 IPLeft (Intellectual Property Left 'IPLeft')
진보네트워크센터 (Korean Progressive Network 'Jinbonet')
참의료실현청년한의사회 (Association of Korea Doctors for Health Rights)
평화인권연대 (Solidarity for Peace and Human Rights)
한국노동네트워크 (The Council of Labornet in South Korea)
한국백혈병환우회
한국HIV/AIDS감염인연대 KANOS (KANOS, Korea HIV/AIDS Network of Solidarity)
함께하는시민행동 (Citizens’ Action Network)
HIV/AIDS인권모임 나누리+ (Nanuri+HIV/AIDS Human Rights Advocacy Group of Korea)

ACT UP-Paris
ACT UP East Bay
Agua Buena Human Rights Association, Costa Rica
AIDS ACCESS Foundation , Thailand
Aids Budget Unit-IDASA
AIDS Policy Project
Alternative Law Forum, India
AMERICAN SPIRIT
Asian Americans United
Association for the Sovereignty of Colmombia
Center for Health and Gender Equity (CHANGE), USA
Communicy HIV/AIDS Mobilization Project (CHAMP)
Essential Action (US)
Essential Drugs Project (UK)
Foundation for Media Alternatives
Frederick Noronha, Co-Founder, BytesForAll
Gestos- Soropositivity Communication & Gender (Brazil)
Glivec Concern Group from Hong Kong
Global AIDS Alliance
Global Alternate Information Applications (GAIA), India
Global Justice
Health Global Access Project (GAP) (US)
Housing Works, Inc. (US)
Lucia Victor Jayaseelan, Coordinating Officer , Committee for Asian Women (CAW)
Michel Bauwens, Foundation for P2P Alternatives
Middle East Children Alliance
Metropolitan Community Church of New York
Neighbors Against McPenntrification
Patients not Patents (US)
People's Health Movement US
Positive Malaysian Treatment Access & Advocacy Group (MTAAG+)
Thai Network for People Living with HIV/AIDS(TNP+)
The Educational Network for Global and Grassroots Exchange(ENGAGE)
The Foundation for Integrative AIDS Research (FAIR)
The International Community of Women Living with HIV/AIDS (ICW)
The Student Global AIDS CampaignTreatment Action Group (TAG)
Uganda Treatment Access movement
VOICE, Bangladesh

Royalty Guidelines and Actual Royalties in Exporting Pharmaceutical Patents

2006-07-16T15:17:00.000+01:00

Royalty guideline is set forth in Enforcement Ordinance for Disposal, Management andCompensation of Public Officials’ Invention (“Ordinance”) enacted July 1, 1999. The sameroyalty guideline was prescribed in Enforcement Ordinance for Disposal and Management ofGovernment Owned Patent that was enacted April 1976 and abolished July 1, 1999.

For more ... http://www.cptech.org/ip/health/c/korea/nam11032005.pdf

Protest against Proposed Talks of Korea US FTA

2006-03-08T07:37:00.000Z

Photos of HIV/AIDS Activists Protesting KORUS FTA, July 2006, Seoul