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                                                   2008/SOM3/IPEG/017
                                                      Agenda item: 4b-iii




      2008 Anti Counterfeiting Activities in Korea
                          Purpose: Information
                          Submitted by: Korea




                             27th Intellectual Property Rights Experts’
                                                        Group Meeting
                                                            Lima, Peru
                                                    15-16 August 2008
  Anti counterfeiting Activities
          In Korea



              2008




Korean Intellectual Property Office
                                      CONTENTS


I. Introduction


 .
Ⅱ Korea’s IPR Protection System
  1. Major IPR protection bodies and Laws that Protect IPRs in Korea
    1.1. Council for the Intellectual Property Rights Protection Policy
    1.2. Korean Intellectual Property Office
    1.3. Public Prosecutors' Offices and the Police
    1.4. Korea Customs Service
    1.5. Local Governments
    1.6. Korean Trade Commission
  2. Laws that Aim to Prevent Trademark Counterfeiting
    2.1. Trademark Act
    2.1.1. Protection of Trademark Rights
      2.1.1.1. Civil Remedies
      2.1.1.2. Criminal Sanctions
    2.1.2. Protection of Unregistered, Well-known Trademarks
    2.2. UnfairCompetitionPreventionandTradeSecretProtectionAct


 .
Ⅲ Korea’s IPR Protection Vision & Strategy
 1. IPR Protection Vision & Strategy
 2. Strengthen PR to Raise Consumer Awareness
 3. Improve System to Protect IPR holders
 4. Strengthen Enforcement Against Counterfeit
 5. Capacity Building of IPR Protection Staff
 6. International Cooperation for IPR Protection


Ⅳ Future Anticounterfeiting Activities
 .
  I. Introduction

    The adequate and reasonable protection of intellectual property rights (IPRs) is a
  fundamental duty of any government. It is also a duty that suits the Korean
  government's policy of promoting the development of industry through fair competition.
  Furthermore, in today's global economy, the protection of intellectual property (IP) is an
  issue that the entire world should strive to resolve.
    The Korean government has therefore taken vigorous activities to protect IP. For
  instance, it has concentrated on aligning its relevant laws and regulations with
  international standards of IPR protection, such as the Agreement on Trade-Related
  Aspects of Intellectual Property Rights (TRIPs Agreement) of the World Trade
  Organization (WTO). It has also enforced strong policies and measures to guarantee the
  efficacy of its regulations.


                  Table 1. Results of IPR enforcement in Korea, 2002~2007

                                                          ( ): Persons arrested and indicted
                                    Trademark
                                    Act,
                                                                             Sound
                     Patent Act, Unfair
                                                                            Records,
                        Utility     Competition                  Computer
                                                                            Video Products
                     Model Act, Prevention         Copyright     Programs
         Total                                                              and
                      Industrial and                  Act       Protection
                                                                             Game
                        Design      Trade                           Act
                                                                            Software
                     Protection Act Secret
                                                                             Act
                                    Protection
                                    Act
      cases persons cases persons cases persons cases persons cases persons cases persons
            48,544           2,432         8,866        25,345        5,711          6,190
2007 38,919         1,420           6,197        23,833        3,252         4,217
             (498)             (3)         (195)           (5)         (10)          (285)
            77,389           2,212        11,976        18,556        4,915        39,730
2006 60,218         1,217           8,814        15,624        2,850        31,713
            (2,771)            (0)         (377)           (1)          (8)        (2,385)
            48,395           2,391         7,323        15,157        3,888        19,636
2005 38,347         1,235           5,325        12,743        2,151        16,893
             (641)             (3)         (365)           (7)         (15)          (251)
            56,218           1,696        10,470        12,746        5,505        25,801
2004 45,266         1,061           8,309        11,778        2,948        21,170
            (1,031)            (3)         (564)          (17)         (12)          (435)
            40,246           1,594         8,542        10,641        2,603        16,869
2003 33,346          983            6,857         9,488        1,541        14,677
             (976)             (2)         (586)          (15)         (35)          (338)
2002 35,418 42,132 1,004 1,649 8,123 9,755 9,037 9,945 1,833 2,759 15,421 18,004
         (1,262)       (12)         (693)               (16)          (13)           (538)
Source: Supreme Prosecutors' Office


   Although the enforcement and improvement of the law is essential for preventing
trafficking in counterfeit goods, the problem cannot be solved by strict enforcement
alone. Rather, to protect IPRs such as trademark rights, it is crucial to develop a social
and cultural environment in which IP is respected by the public.
 .
Ⅱ Korea’s IPR Protection System

 1. Major IPR protection bodies and Laws that Protect IPRs in Korea




            Table 2. Laws that Protect Intellectual Property Rights in Korea

       Types of IPRs                      Law                          Authority
              Patents          Patent Act
Industrial    UtilityModels    Utility Model Act
property                       Industrial               Design
rights        Designs
                               Protection Act                  Korean
                Trademarks     Trademark Act                   Intellectual
Unfair             competition                                 Property Office
                               Unfair Competition Prevention
prevention
                               and Trade Secret Protection Act
and trade secret protection
Semiconductor integrated Semiconductor Integrated
circuit layout rights          Circuit Layout Design Act
Copyrights                     Copyright Act
Sound records,                 Sound Records,
                                                               Ministry of
video products and             Video Products and
                                                               Culture, Sports and
game software                  Game Software Act
                                                               Tourism
                               Computer Programs
Computer programs
                               Protection Act
                                                                    Ministry of Food,
New Breeds of Plants               Seed Industry Act                Agriculture,Forestry           and
                                                                    Fisheries
Customs           clearance
                                                                    Korea Customs
regulations                 Customs Act
                                                                    Service
on counterfeit goods


   1.1 Council for the Intellectual Property Rights Protection Policy

 On May 3, 2004, the Korean Government held the inaugural meeting of the Council
for the Intellectual Property Rights Protection Policy, which was convened under the
auspices of the Office for Government Policy Coordination. In addition to ten non-
official experts, the council comprised representatives of the following government
agencies: the Ministry of Justice, the Ministry of Foreign Affairs and Trade, the Ministry of
Education and Human Resources Development, the Ministry of Culture and Tourism, the
Ministryof Information and Communications, the Ministryof Planning and Budget, the Korea Customs Service,
the National Police Agency, KIPO, the Korea Food and Drug Administration, and the
Government Information Agency. And annual meetings to discuss IP protection policy
are held.


  The council plans to coordinate the IPR matters of each government office through
the following means: by improving the legal and administrative infrastructure, by
planning joint crackdowns, by educating the public, by cooperating on an IP protection
plan with the relevant government offices, by examining the current state of affairs, and
by thoroughly reviewing the results.


1.2 Korean Intellectual Property Office

KIPO manages the Unfair Competition Prevention and Trade Secret Protection Act, the
Semiconductor Integrated Circuits Layout Design Act as well as four major industrial
property right acts, including the Patent Act. In addition, we investigate and crack down
on counterfeit goods to prevent unfair competition we monitor those who sell
counterfeit goods online and report them to the police; and we notify the Korea
Communications Committee of any illicit sales information for the purpose of shutting
down counterfeiting operations.
1.3. Public Prosecutors' Offices and the Police

   Public prosecutors and the police investigate counterfeiters and distributors of
counterfeit goods in a bid to maintain social and trade order. Their anticounterfeiting
activities are focused on punishing violators.


  Operating in this capacity is the Joint Investigative Center on IPR Violations at the
Supreme Public Prosecutors' Office and the Regional Joint Investigation Teams at major
district public prosecutors' offices. These departments comprise public prosecutors who
exclusively investigate IPR violations, and every year their anticounterfeiting activities
reap positive results.


   Annual meetings to discuss investigations of IP criminals are held by field officers of
the following eight government agencies: the Prosecutors' Office, the Ministry of Foreign
Affairs and Trade, the Ministry of Culture and Tourism, the Ministry of Information and
Communication, the National Police Agency, the Korea Customs Service, the Korea Food
and Drug Administration and KIPO. The officers analyze and review the results of
crackdowns on IPR infringers and consider other activities of combating IPR
infringement. KIPO actively participates in the meeting in order to eradicate the
problem of counterfeit goods.


   Table 3. Results of the anticounterfeiting activities of the prosecution (in relation to
violations of the Trademark Act and the Unfair Competition Prevention and Trade

Secret Protection Act), 2002~2007


                               2002 2003    2004  2005   2006  2007
         Persons investigated 9,775 8,542 10,470 7,323 11,976 8,866
          (Persons arrested) (693) (586)   (564) (365)  (377) (195)


1.4 Korea Customs Service

  To stem the inroads of counterfeit merchandise at the earliest possible stage, the
Korea Customs Service, under the authority of the Customs Act and other relevant laws,
has set up investigation teams that exclusively survey and control counterfeit goods.
   If you own a Trademark, you can request customs authorities to record your
registered trademark in order to restrict the import or export of goods that infringe your
trademark rights. The custom officials can suspend operations on suspect articles
presented for import or export clearance, and they can investigate the suspected
infringers. The Korea Customs Service also runs a Cyber Exhibition of Counterfeit and
Genuine Goods on its Web site <http://www.customs.go.kr/cyber/index.htm>.
\

                 Table 4. Results of customs crackdowns, 2002~2007


                                    2002 2003 2004 2005 2006 2007
                   Crackdowns       347 433 451 389 1,007 926
                 Sum of money
                                   0.249 0.489 0.211 0.159 2.666 0.678
             (trillion Korean won)


1.5 Local Governments

   The Commissioner of KIPO delegates administrative authority for anticounterfeiting
to the head of each local government.
   Under KIPO's guidelines, local governments can initiate administrative investigations
in conjunction with the prosecution, the police and KIPO. They also promote customer
awareness of anticounterfeiting within their jurisdictions.


1.6 Korean Trade Commission

Whenever goods are found to violate IPRs pertaining to patents, trademarks, industrial
designs, copyrights, business and so on, the Korean Trade Commission may order the
suspension of related imports, exports, sales, and manufacturing; ban the landing of
such goods and abandon such goods; order the publication of corrective action; order
the publication of violations of the Act; or take other necessary corrective measures
under the provisions of the Act on the Investigation of Unfair International Trade
Practices and Remedy against Injury to Industry.
2. Laws that Aim to Prevent Trademark Counterfeiting

  Legal action against counterfeiters is based primarily on the Trademark Act and the
Unfair Competition Prevention and Trade Secret Protection Act. These laws maintain
orderly trade by protecting trademarks.


   Furthermore, under the laws, the manufacturing, selling, importing and exporting of
counterfeit goods can infringeatrademarkrightandbeconsideredanactofunfaircompetition.


 2.1 Trademark Act


  2.1.1 Protection of Trademark Rights

   The Trademark Act provides the owner of a trademark registered with the Korean
Intellectual Property Office (KIPO) an exclusive right to use the registered trademark
on designated goods. The trademark owner can also prevent unauthorized third parties
from using confusingly similar marks.
    A trademark right is infringed if you use a trademark that is identical with or similar to the registered
trademark of another person and if you use it on goods that are identical with or similar to the designated
goods for which the trademark is registered.


   2.1.1.1 Civil Remedies


      • Injunction against Infringement

 If you own a trademark right, you can request any person who is infringing or likely to
infringe your right to stop the infringement. You can also demand the destruction of the
infringing articles and the removal of the facilities used for the infringement, or take
other measures necessary to prevent the infringement.


      • Compensation for Damages from Infringement

   Under Civil Law, if you own a trademark right, you can claim compensation for
damages from any person who has intentionally or negligently infringed your trademark
right.
  To estimate the damages in this type of compensation claim, you simply multiply the
expected profit of a single legitimate good by the number of counterfeit goods sold.


     • Other Remedies

   If you own a trademark right, you can request the court to order the person who has
injured your business reputation by intentionally or negligently infringing your
trademark right to take the necessary measures to restore your business reputation.
Furthermore, you can make this request in lieu of or in addition to being compensated
for damages. You can also claim restitution of unjust profits under Civil Law.


  2.1.1.2. Criminal Sanctions

  Any person who infringes a trademark right is subject to imprisonment of up to seven
years or a fine of up to a hundred million Korean won.
  Furthermore, if a representative of a legal entity or an agent, employee or any other
servant of a legal entity or natural person infringes a trademark right in relation to the
business of the legal entity or natural person, then the legal entity or natural person, in
addition to the offender, is subject to a fine of up to three hundred million Korean won.


  2.1.2. Protection of Unregistered, Well-known Trademarks

   If you own a well-known trademark that is not registered at KIPO, the Trademark Act
still offers you indirect but strong protection by prohibiting the registration for an
identical or similar mark, though it does not allow you to take action against an
infringement of your unregistered trademark.
   Applications for identical or similar marks are rejected under the following
circumstances:
        )
     (ⅰ whenever the trademark is identical with or similar to another person's
          trademark that is well-known among consumers as indicating the goods of
          that other person, and the trademark is to be used on goods that are identical
          with or similar to the goods of that other person.
        )
     (ⅱ whenever the trademark is likely to cause confusion with the goods or services
          of another person because the trademark is recognized among consumers as
          designating the goods or services of that other person.
      )
    (ⅲ whenever the trademark is identical with or similar to a trademark that is
        recognized as indicating the goods of a particular person by customers inside
        or outside of the Republic of Korea, and the trademark is to be used to obtain
        unjust profits or to inflict harm on the particular person.



  2.2. Unfair Competition Prevention and Trade Secret Protection Act

  The Unfair Competition Prevention and Trade Secret Protection Act also protects
well-known trademarks (especially those that are unregistered).


  If you have been injured or are likely to be injured by an act of unfair competition,
you can bring a civil action before the court seeking injunctive relief, monetary damage
and restoration of your business reputation or goodwill. This is possible, for example,
when someone causes confusion with your goods by using a trademark that is identical
with or similar to a trademark of yours that is well known in Korea.


   Under the Unfair Competition Prevention and Trade Secret Protection Act, a person
who engages in an act of unfair competition is subject to imprisonment of up to three
years or a fine of up to thirty million Korean won. The Act also stipulates that KIPO
and local governments can investigate acts of unfair competition and issue warnings to
offenders.


  When the Commissioner of KIPO or the heads of local governments determine that
an act of unfair competition has been committed, they can warn the offender to cease
the offence or order that the mark used in the offence be removed or destroyed within a
specific period of up to thirty days.
Ⅲ KIPO's IPR Protection Vision and Strategy
 .




1. IPR Protection Vision and Strategy
As the knowledge-based economy gains force, efficient protection of IPRs is becoming
a more important factor in the task of strengthening national competitiveness. Even
though we have strengthened our IPR protection measures, the manufacture and
distribution of counterfeit goods still persists and the international ranking of the IPR
protection level in Korea is not high. Furthermore, improvements in the quality and
design of Korean goods have led to a surge in the illicit copying of Korean goods
overseas


Table 5. Korea's IPR protection ranking according to the International Institute for
Management Development
                  Year    2003    2004    2005     2006    2007
                 Rank      36      33      30       38       34


Counterfeiting can cause huge economic damage. It may lead to reduced sales; it may
threaten the security and health of the people it may hinder competitiveness in overseas
markets, especially in terms of market share and exports; and it may ruin the reputation
of goods and national brands.
Thus, at KIPO, we have established the following five strategic goals:
    ․   to raise consumer awareness of counterfeiting
    ․   to improve the IPR protection system
    ․   to intensify efforts to eradicate counterfeit goods
    ․   to enhance our capability to crack down on counterfeit goods
    ․   to strengthen international cooperation on the IPR protection.

By promoting these goals, we hope to score a top ten ranking in our level of IPR
protection by 2013 so that our international reputation for IPR protection is on a par
with the major developed countries.


2. Strengthen PR to Raise Consumer Awareness

A core element of raising the level of IPR protection is consumer awareness of the
illegality of counterfeit goods. Accordingly, we use various means of raising consumer
awareness of counterfeiting.
Firstly, we promote awareness through the TV, newspapers, the subway and portal sites.
From 2008, we plan to target the young generation by organizing a focus group of
university students, who are the future consumers, and by inviting university students to
enter a contest for the best advertisement.
In addition, we publish both Korean and English versions of our IPR awareness
brochures and manage a Cyber IPR Protection Center where the public can report
counterfeit goods and receive a variety of useful information.


Table 6. Publication of IPR awareness brochures
               Year            2002     2003    2004 2005  2006   2007
       Types of brochures       4         4       3    4     4      4
           Total copies       41,165 13,300 14,035 15,300 16,000 21,000

3. Improve System to Protect IPR holders

To enhance the protection of right holders, we will continue to recommend revisions to
the IP legislation. With regard to the Patent Act, we plan extend the term of a patent by
a period equivalent to any registration delays that are attributable to the processes of the
patent examination or trials and lawsuits. In addition, we plan to extend the period of
public disclosure exceptions from six months to twelve months. The extended period
will give inventors more time to apply for a patent even if their technology has been laid
open to the public. Moreover, to better protect the lawful rights of a patent right holder,
we plan to abolish the cancellation of a patent right due to nonuse.


Currently the Trademark Act only offers trademark protection to marks that are visually
recognizable; however, we intend to broaden the scope of trademark protection to marks
that can be recognized by a sound or smell.


We also aim to improve of enforcement of IPR laws. Right holders often have difficulty
estimating the damage and obtaining relief with regard petty trademark infringements
and infringements that occur frequently and simultaneously on the Internet. To solve
this problem, we plan to introduce a legal compensation system for damages whereby, if
you are a right holder, you can automatically be compensated to the value of fifty
million Korean won in cases where you can't prove the actual amount of damages.


A key to many IPR lawsuits is confidential information or trade secrets. However, the
parties of a lawsuit are generally reluctant to submit confidential information out of
concerns about the disclosure of trade secrets; in turn, this reluctance leads to delays and
deficiencies in lawsuit investigations. We therefore plan to introduce confidentiality
provisions and criminal penalties for breaches of confidentiality in the process of a
lawsuit.


4. Strengthen Enforcement against Counterfeit

The Industrial Property Protection Division of KIPO, which is in charge of preventing
unfair competition, conducts joint investigations with the police, the prosecution and
local governments regarding the circulation of counterfeit goods. That division also runs
a Counterfeit Goods Reporting Center (Tel:+82(42) 472-0121, Web site:
http://www.kipo.go.kr/ippc). The center receives reports on those who sell or distribute
counterfeit goods. When a report is received, the center issues offenders with a
corrective warning to either remove the infringed mark or to desist from selling or
distributing the counterfeit goods. If the sellers, manufacturers or wholesalers of
counterfeit goods ignore a corrective recommendation, the police or prosecution may
file criminal charges against them or we may conduct a joint crackdown.
Since 2007 we have detected various Web sites or blogs that sell counterfeit goods. In
those cases, we usually request the National Police Agency to investigate or we ask the
Broadcasting Communications Commission and the operator of the portal site to shut
the Web site or blog down.


Table 7. Results of crackdowns on counterfeit goods
              Year            2002     2003      2004 2005 2006   2007
          Prosecutions         409      311       198   88  128    116
      Corrective warnings      534      238       425  749  966   1,066
              Total            943      549       623  837 1,094 1,182
         Disclosed items     22,133 10,160 149,555 17,742 14,852 35,366



Table 8. Results of the Counterfeit Goods Reporting Center
                         Year                      2002 2003 2004 2005 2006 2007
                       Reports                     19 57 167 250 * 1,605 2,374
    Results Referrals to the police or prosecution 16 21 50 50 398          439

* The escalation in reports is due to the introduction of incentives for reporting
  counterfeit goods, which took effect on January 1, 2006.



Table 9. The most common counterfeit goods
                Year                2002 2003       2004     2005     2006     2007
          Bags and purses          4,147 1,763      1,307    1,916    2,066    7,823
                Shoes              1,170  402        615     1,280     471     1,203
               Clothes             8,817 2,623     84,781    7,102    2,172    4,598
            Accessories            5,600 4,219     53,849    6,969    8,747   20,830
      Others (labels, tags, etc.) 2,399 1,153       9,003     475     1,396     912
                Total             22,133 10,160   149,555   17,742   14,852   35,366



5. Capacity Building of IPR Protection Staff

KIPO endeavors to strengthen the capability of its officials who work with the police,
prosecution and local governments to enforce IPRs. Each year before a regular or joint
crackdown, we offer specialized practical training to our IPR enforcers.
In addition, we offer a course for IPR enforcers at the International Intellectual Property
Training Institute. Those who excel in this course are given special rewards.


Table 10. Training and informal discussions on public awareness
                     Year              2002 2003 2004 2005 2006 2007
             Number of sessions         22     17     23    23  33 28
            Number of participants     367 401 509 544 759 535


6. International cooperation on IPR protection

When concluding negotiations on the free trade agreement with the US, we highlighted
the importance of strengthening IPR protection and intensified measures to eradicate
trademark counterfeiting and piracy of copyrighted materials. Furthermore, in
negotiations for a free trade agreement with the EU, we have been endeavoring to
intensify IPR protection with a broad range of enforcement measures.
Moreover, we will continue to actively participate in negotiations of the Anti
counterfeiting Trade Agreement, which a multilateral agreement on the enhancement of
IPR enforcement, and positively engage in the anti counterfeiting and piracy initiative
of APEC.


Ⅴ Future Anti counterfeiting Activities
 .

The Korean government is committed to maintaining an advanced patent administration
system. In addition, we will endeavor to enhance our international reputation by
continually amending our laws and systems and by promoting efficient and effective
policies in line with international standards of IPR protection.

				
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