South Korean and American negotiators reached a free trade agreement (hereinafter referred to as
"FTA") on April 2, 2007 after 14-month negotiation talks.


It is expected that the FTA will take effect by late 2008 at the latest with congressional approval of both
nations. Followings are the patent-related items on FTA, which are worthy of attention. 

1. Patent term extension
 
    (1). Patent term extension due to delay in granting patent

          Delays in granting patents longer than 4 years from the filing date and 3 years from the date
          of requesting the substantial examination in Korea shall result in an extension of the 
          patent term, except when such delay is attributed to the applicant.

    (2). Pharmaceutical patent term extension

          To compensate a patentee for unreasonable curtailment of the patent term as a result of the
          marketing approval process such as safety test of a pharmaceutical product, an extension
          of pharmaceutical patent term is permitted.

          Under the present Korean patent law, periods from the date of request for marketing approval
          or the issuance date of the patent, whichever is later, to the date of marketing approval shall
          be added up to the patent term. However, this patent term extension cannot exceed 5years,
          a period attributable to actions of the patentee shall not be included in such extension.
          Meanwhile, the request for the patent term extension shall be filed within 3 months from the
          date of marketing approval and 6 months prior to the patent term expiration date. 


2. Extension of grace period

    Grace period for loss of novelty and inventive-step has been extended from 6 months to
    1 year (12-month) with consideration of international trends towards extension.

 
3. Bolar provision

    The "Bolar exemption" is a policy that allows generic manufacturers to prepare production and
    regulatory procedures before a patent expires, so the products can be ready for sale as soon as
    the patent expires. According to this exemption, despite the patent rights, performing research
    and tests for preparing regulatory approval does not constitute infringement, while
    manufacturing and stockpiling drugs for sale other than regulatory approval of drugs for sale is
    regarded as an act of  infringement of the pharmaceutical patent.

 
4. Linkage between regulatory approval of drugs and patents

    In case the drug approving authority permits a generic drug based on information about
    efficiency and safety of previously approved drug, it is required to
 
    (i).  notify the patentee of the fact that the request for permission is submitted;
    (ii). prepare a linkage measure on the drug approval process with patent concerned to prevent
          marketing drugs.

    On the other hand, in the U.S.A., the approval process for generic drugs shall stop automatically
    for 30 months, when the patentee demands an infringement suit against generic manufacturers.
    However, South Korea promised to develop a program available domestically, considering the
    U.S. procedures.


5. Cancellation of patent right

    A patent may be cancelled only on grounds that would have justified a refusal to grant the patent.
    Accordingly, Article 116 of the Korean Patent Act, which speculates the cancellation of a patent
    right under the reason of non-use, shall be deleted by revision.