Sangmin Song, Director, Anti-Monopoly Div., KFTC MRFTA & IP Rights 1

2 Overview IP Guidelines MRFTA and Intellectual Property Rights 1 2 Qualcomm in 2009 : Abuse of Market Dominance GSK vs. Dong-A Pharmaceuticals: Pay for delay Samsung vs. Apple: Seeking an Injunctive Relief Cases 3 Suggested changes on current IP Guidelines Revision of IP Guidelines

3 MRFTA & Intellectual Property Rights Both have the same ultimate goal They are complementary in promoting innovation and enhancing consumer welfare Antitrust law promotes innovation by protecting competition, which is the driving force behind the market economy IP rights provide incentive for innovation by granting exclusive rights for a certain period of time

4 MRFTA & Intellectual Property Rights Article 59 (Exercise of Right to Intangible Property) This Act shall not apply to any act which is deemed lawful exercise of the right under the Copyright Act, the Patent Act, the Utility Model Act, the Design Protection Act or the Trademark Act. Basic Principle : The Act does not apply to lawful exercise of IP rights.

5 MRFTA & Intellectual Property Rights MRFTA may apply to the exercise of IPRs when the anticompetitive harm associated with their exercise outweighs any procompetitive benefits. Subject to Article 3 (abuse of market dominance) or Article 19 (cartel)

6 IP Guidelines 2 Suggested changes on current IP Guidelines Revision of IP Guidelines

7 Suggested changes on current IP Guidelines Adopted by SSO SEPDe facto SEP A FRAND Commitment Outcome of market competition No FRAND Commitment Some have expressed concerns: “it is inappropriate to treat SEPs and de facto SEPs in the same manner”

8 de facto SEPs Current guidelines : define standard technologies to include de facto SEPs (“technologies actually used widely as the standard in the relevant technology area”) Revised guidelines : exclude de facto SEPs in the definition of standard technologies → distinguish de facto SEPs from (genuine) SEPs Revision of IP Rights Guidelines

9 Definition of SEPs Current Guidelines : Patents used to implement standard technologies Revised Guidelines : Patents used to implement standard technologies + subject to a voluntary FRAND commitment

10 Refusal to license IPR Current guidelines: raise concerns that any refusal to license may be a potential MRFTA violation. Revised guidelines : clarify factors to be considered in the assessment of refusals to license IPR. Revision of IP Rights Guidelines

11 Qualcomm in 2009: Abuse of Market Dominance GSK vs. Dong-A Pharmaceutical: Pay for delay agreements Samsung vs. Apple : Seeking an injunctive relief Cases 3

12 Qualcomm’s Abuse of Market Dominance (2009) Cases SEP Holder of CDMA wireless communication technologies + modem chips Charging discriminatory royalties depending on whether licensees are using Qualcomm’s modem chips if using Qualcomm’s modem chips: 5% otherwise: 5.75% (Decision) Abuse of market dominance (Remedial measures & a total fine of approx. 270 billion won)

13 ① Withdrawal of a generic drug from the market ② Restrict the development and sales of medicine that can compete against GSK Cases GSK vs Dong-A: Pay for delay agreement(2011) In return, GSK offered financial benefits to Dong-A such as exclusive sales right of new drugs GSK (Glaxo Smith Kline) is the patent holder (original medicine) Dong-A Pharmaceuticals is a licensee (Generic medicine) (Decision) Collusion (Remedial measures & a total fine of 5.2 billion won ) Pay-for-delay Agreement

14 Samsung vs. Apple (2014) Cases A SEP Holder filed injunction (Issue) whether the company is a Willing Licensee * Whether or not the parties participated in the negotiations in good faith (Decision) No MRFTA violation

Thank you 15