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Patents to Block Illegal Online Distribution of Software (‘SW’)

Patents to Block Illegal Online Distribution of Software (‘SW’)

- Law related to protecting online transmission of SW will be enforced (March 11, 2020) -

Does selling software (SW) online that was a patent invention stolen from another party correspond to an infringement of a patent? The answer will be different before and after March 11, 2020, the date from which a new patent law regulation will be enforced. Up to this point, the answer has been “no”.

Since SW is not included among objects of protection under the Korean Patent Act, SW has been protected as a patent only in the case that the SW was realized as a method invention* and contained inside of computer-readable media such as USB, etc. and distributed offline.

Per the trend of the SW distribution environment changing to online means, KIPO has kept revising the law since 2005 in order to prevent SW which contains patent inventions from being illegally distributed online.

The first revision plan for including SW as patentable objects foundered many times due to objections from private organizations and from ministries and offices concerned because infringement objects would be overly expanded and related industries could be intimidated thereby even despite continuous consultation.

KIPO drew the final plan for blocking illegal distribution of SW online in order to protect patentees’ rights and also to benefit the related industry, and the revised law has now had the opportunity to be passed.

Meanwhile, it is not immediately a patent infringement that SW including a patent invention is transmitted* online. The revised law is to prevent patent-including SW from being infringed by sellers who distribute such SW illegally while having knowledge of infringing. Benign acts, such as using such SW at home or for personal use, do not correspond to an act of infringement.

*meaning simple SW transmission, SW uploading and downloading by using cloud computing, etc.

The Commissioner of KIPO stated that “This revised law should contribute to fair competition in the SW industry by protecting SW distributed online”. Also, he mentioned, “It is anticipated to be helpful for protecting the technologies of ‘startups’ and small and medium-sized businesses by rationally protecting SW which is a key technology of the Fourth Industrial Revolution, including in areas such as AI and Big Data analysis, etc.”

[Explanatory material on partial revised plan for Patent Act in relation to SW transmission protection]

□ Main contents of revised law

ㅇ Item No. 2013563; Date of Bill: May 14, 2018; Members: 10 people - Ki Hun, Song et al.

ㅇ (Ground for suggestion) Since the SW distribution environment has changed from offline to online, it is required to expand the scope of invention in order for online transmission of SW which includes patented technologies to correspond to the working of a patented invention.

ㅇ (Main contents)

① In the case of a method invention, an act of subscribing to the use of such method will be included in the working of a patented invention (item 2 (3) B)

- To protect acts of transmitting SW online which include patent inventions

< Present state of protection for existing SW patents >

* “△” means that SW will be protected only in the case that a recording medium with saved SW is equipped in a device.

② The effect of a patent right will be valid only in the case that a person subscribes to a method of use while having knowledge of infringing the patent right or Exclusive License for preventing SW industry shrinkage* (new clause of Article 94 (2) of item).

* To be applied to intentional cases and not applied to mistakes.

ㅇ (Expected effect) As an effect of preventing in advance online SW transmission which includes patented technologies, patentees’ interests will be protected, and meanwhile, it is expected to guarantee SW developers’ creations since patent rights will be effective towards intentional infringement acts.

□ Background of promoting revised law

ㅇ Distribution of SW including patented material via offline (USB and CD, etc.) has been protected by the Patent Act; however, distribution of the same SW online could not be protected.

* If A transmits SW which infringes a patent to B online and B sells it as a CD to C, B obviously violates the patent. However, the matter of A violating the patent is not clear.

- It is irrational to differentiate the matter of protecting a patent according to SW’s distribution channel, especially in the case that it is the same SW.

* Main countries protecting SW by such patent regulations, without differentiating between online or offline distribution.

* Japan and Germany include SW as an object. America recognizes indirect infringement. United Kingdom interprets such as a use subscription.

ㅇ Improving the system for effective protection of patents related to SW distributed online is required due to the trend that the SW distribution environment has changed from offline to almost exclusively online.

[Source: KIPO]

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