Guidelines of reviewing undue exercise of intellectual property rights

I found a slightly more detailed statement of the law in relation to high-tech cooperation in the Korean IP Guidelines. The statement is very brief and provides no real guidance as to the legal theory under which horizontal cooperation would be illegal. Note that neither Art. 19 nor the Guidelines on Art. 19 produced by the KFTC elaborate on the high-tech issue. I think it would be appropriate for the KFTC to review Art. 7 of the IP Guidelines in light of the US law (as well as law in other jurisdictions) with particular reference to the work of Carl Shapiro (more detail about the Antitrust/IP guru in a later blog).

Guidelines of reviewing undue exercise of intellectual property rights (KFTC Aug. 2000)

Article 7 Cross-Licensing and Pooling-Arrangement of Intellectual Property Rights

When anti-competitiveness occurs from signing cross-licensing contracts or pooling-arrangement of intellectual property rights between licensors who are in mutually competitive or substitutive relations, provisions under Article 19 (Restrictions on Improper Concerted Acts) shall be applied.

Yep that is it! All one sentence of it! Also there is a problem of scope in that patent settlements and standards setting are not mentioned here. Will definitely have to analyse these points in my Ph.D!

Collusion in High-Tech Industries

This is a test blog. Recent cases of collusion in semiconductors and LCD monitors involving Korean executives has made the extraterriorial application of antitrust law a hot topic in Korea. The real issue, however, may be uncertainty in the enforcement of horizontal cooperation rules in a global setting.

There is an international consensus that so-called "hard-core" cartels are illegal, yet in Korea all forms of illegal cartel are treated essentially the same, i.e. through corrective measures and administrative fines for firms. Prosecutions are hard to find since the Korea Fair Trade Commission has been reluctant to file such complaints except in the case of serious - e.g. collusion maintained by means of threats or force - or repeated violations. (Min Ho Lee, "Recent Developments in the Treatment of Collusion by Korean Courts", Journal of Korean Law, Vol. 4 No. 2, p. 161)

It is also unlikely that presumptions of agreement under Art. 19(5) of the Monopoly Regulation and Fair Trade Act could be prosecuted criminally.

Not only are cartels not punished criminally as a rule for the above reasons, but guidance on illegality for other cooperative behaviour is insufficient. While the rule of reason applies generally to these acts, there is no indication as to how this would operate in the context of high-tech markets. Thus, there is a lack of legal certainty with regards to standard setting, cross-licenses, patent pools, patent settlements, etc. On this point, I am interested in the work of Professor Carl Shapiro and the US exeperience in general.