Appropriateness of Recognized Amount for Trial Cost

(Patent & Trademark Newspaper on January 20, 2023)

                                                                                                               Myung-Shin KIM

                                                                                                               Advisor, The Korean Patent Attorneys Association

In case of an appeal trial against a rejection decision by an examiner regarding a patent or trademark application case or permission trial for correction of a patent claim by a patentee, Article 165, Para.3 of the Patent Law stipulates that the trial cost shall be born by the plaintiff. However, in the case of inter-parties trials, including patent invalidation trials, trials for confirmation of the patent claim's scope and cancellation trials, etc. (excluding ex parte appeal trials), suits in the Patent Court, and suits in the Supreme Court, the lost party shall bear the trial or suit costs.

Now, let us review how much the trial or suit cost the won party can request compensation to the lost party when the decision of the Intellectual Property Trial and Appeal Board (IPTAB), the judgment of the Patent Court, or that of the Supreme Court has been finalized.

Suppose the plaintiff wins the invalidation trial and requests compensation of the trial cost to the defendant. In that case, the plaintiff shall apply a decision regarding the trial cost with the President of the IPTAB after the conclusion of the IPTAB, according to the Patent Law and the Notification of the Korean Intellectual Property Office (KIPO). The President of the IPTAB renders the decision of trial cost to the plaintiff and defendant. The trial cost includes the official filing fee of 240,000 Won (Korean currency), the patent attorney charges of 240,000 Won, and other expenses for witnesses or experts. Therefore, in a usual case, a plaintiff who won a trial can request compensation amounting to 480,000 Won to the defendant. A defendant who won a trial can request only the compensation amount of 240,000 Won because there is no official filing fee. Further, when the Patent Court or Supreme Court finalizes a cancellation suit against a decision of the IPTAB, the won party can submit an application for determination of the suit cost with the Patent Court, and based on this decision, the won party can request compensation to the lost party. According to the Civil Procedure Code, the Official Fee Law for the Civil Procedure, and the Regulation of the Supreme Court, the official filing fee for the Patent Court is about 410,000 Won, whereas the official filing fee for the Supreme Court is about 820,000 Won. The recognized amount for the maximum attorney charges at the Patent Court or the Supreme Court is 7,400,000 Won each.

The recognized amount for attorney charges in the Patent Court and Supreme Court must be increased realistically, and that for patent attorneys in the IPTAB must also be increased by at least 5,000,000 Won because the present amount is significantly beyond common sense. Therefore, it must be balanced with the Patent Court's and Supreme Court's costs.

The decision of IPTAB, like the judgment of the Patent Court and Supreme Court, has a fundamental principle that the lost party must pay the trial cost to the won party. However, even when a party wins the trial, the party rarely requests the recognized amount for the trial cost to the lost party because the recoverable amount is minimal. According to Article 165 of the Patent Law, and Article 98 of the Civil Procedure Code, the decision of the IPTAB stated that the lost party must pay the trial cost to the won party. However, the practical precedents of the IPTAB were different from the laws concerned. Notably, the suit costs of the Patent Court and Supreme Court are more than 30 times the trial cost. As such, the notification of the KIPO will likely violate the basic principle of the Patent Law and the Civil Procedure Code.

Considering the dignity of the IPTAB and the legal status of a patent attorney, the recognized amount for trial costs should be increased reasonably. Further, if the lost party compensates the trial cost reasonably, a party concerned may be more careful when demanding a trial with the IPTAB. This trend will prevent vexatious problems and also decrease the number of unnecessary trials.

On the other hand, if the right of a patent or trademark is invalidated, the lost party may have a possibility to raise a complaint against the KIPO as to why the KIPO gave an imperfect right to the patentee or trademark owner. To settle this complaint, the KIPO should decrease the ratio of invalidation trials by employing more examiners and an exact prior technical search. For this reason, we cannot change the principle of the burden of trial cost.

Currently, if the IPTAB cancels the examiner's decision and returns the case to the Examination Bureau, the KIPO pays back only the official filing fee to the applicant.

Now, let us review why the plaintiff has the burden of the trial cost in the inter-parties appeal case.

The parties in the inter-parties appeal cases are the applicant and the KIPO. Although the IPTAB belongs to the KIPO and the Commissioner of the KIPO has authority over the human resources of the IPTAB, the IPTAB is an independent organization with a unique administration system. Moreover, as far as an industrial property right is concerned, the IPTAB is acting as the first instance because the Patent Court handles an appeal case against the decision of the IPTAB as the second instance. Therefore, if the KIPO loses the trial of the IPTAB in the inter-parties appeal case, the KIPO must bear the burden of the trial cost. But when a patentee demands a permission trial for correction of a patent claim among the inter-parties appeal cases (unless there is a mistake of examination by an examiner), the patentee must bear the burden of the trial cost because the legal benefit is only for the patentee.

I presume that the plaintiff has burdened the trial cost because an examiner and a trial examiner belonged to the KIPO. From now on, if the lost party burdens the trial cost, even in the inter-parties appeal cases, then an examiner will pay more attention when rejecting a patent or trademark registration. This environment will lead to a more detailed examination and decrease the number of unreasonable rejection cases on a patent or trademark registration.