FormFactor loses its patents in Korea

The Supreme Court of Korea affirmed the lower court’s decision invalidating FormFactor’s patents, thereby allowing defendant Phicom to continue to use the technology. 파이컴, 반도체 특허소송 美업체에 승소 < 최신기사 < 산업 :: 한경닷컴 ::

I haven’t gotten my paws on the decision, so I will have to wait for several days before I can post my thought on that.

Some view this decision as nationalistic or at least an evidence of loose IPR protection in Korea. Patent Dispute Not True to FormFactor

This seemingly widespread perception of Korea’s not-quite-so-neat IPR protection system is resonating with what I read from bloggers about Starbucks v. StarPreya case. I won’t argue the perception is unfounded. Perception is perception and it’s not a fact. It’s an accumulation of impression from small bits of information. I find it fair for foreigners to think that the Korean legal system is not as hospitable for foreginers as it is for its nationals. I myself am sometimes horrified at Koreans’ extreme nationalistic behaviors as shown in the World Cup 2002, Dr. Hwang’s stem cell research scandal, and the most recent Director Shim Hyung Rae’s D-War movie syndrome. But, as I wrote in the Starbucks v. StarPreya post, I’m not hundred percent convinced that the judges’ decisions are nationalistically biased. When I come by the FormFactor decision, I might try to read between the lines and catch whether the Supreme Court’s decision was swayed by the sentiment of protecting OUR companies from the FOREIGN PREDATORS.

This case may also serve as another material for proving or disproving the perception that Korean courts are lenient towards small and medium companies when it comes to the battle between SMEs and big corps. This has been raised by Dram man in his comment on my iPhone Unlocking. I’m sure this is another widespread perception among foreign lawyers, foreign investors, and foreigners in general.

Another spin in this case is the US government’s effort to influence the decision. I heard from a source that the U.S. gov’t delivered messages through diplomatic channel. One can easily guess what the messages might have been. US industry’s negative perception about a foreign country’s legal system is one thing, US gov’t sending diplomatic messages to influence court’s decision is another. It reveals the attitude the US gov’t is taking in dealing with matters like this.

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2 thoughts on “FormFactor loses its patents in Korea

  1. Dram_man says:

    I think I have been slightly misconstrued on the issue. Allow me to elaborate.

    The courts notwithstanding, the practice of IP enforcement in Korea puts the onus on the rights holder. Enforcement officials are usually loathe to act on their on volition, if at all, even in the most egregious cases. Furthermore, to prod most authorities to act in Korea usually takes a good amount of time and money, especially for foreign rights holders. I think this is one way larger companies have the deck stacked against it in Korea.

    Moving to the courts, I do not quibble too much over the court’s finding of fact or interpretation of law in the favor of small businesses (paradoxically I think the opposite to be the case for Korean companies given recent developments). However, the court “suggested” settlements and liberal use of probation I think stacks the deck against large companies trying to crack down on IP abuse.

    Er go, for the average small enterprise there is:

    1. Little chance of being noticed by the rights holder due the general nature of market (which applies almost anywhere).

    2. If a small business is noticed, due to the costs of bringing a complaint, there is doubt if the rights holder would take action.

    3. If action is taken, I agree the court would justly find for the rights holder, however I postulate the penalty to be light. First, its difficult to justify compensatory damages to a Korean court. Second, its impossible to prove punitive damages. Third, any sentence in a criminal case will likely be suspended or given automatic probation.

    Er go, I would say that for a small businessman in Korea IP violations are pretty risk free. Low chance of getting “caught”, low chance of getting prosecuted, and finally a very low penalty for their actions.

  2. iplawyer says:

    Your comment makes me think of writing a paper on the legal or financial barriers to enforcement effort by big corps and SMEs. Thanks for the input.

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