Warning letters issued to customers of an alleged infringer
Issuance of a cease and desist letter is usually recognised as the first step to be taken by a patentee against an alleged infringer in a patent infringement dispute in Korea. A warning letter to an alleged infringer puts such person on notice and serves the purpose of establishing the infringer’s intent or bad faith if the conduct persists. This would be useful in a subsequent law suit. Furthermore, a warning letter opens up the possibility of an amicable settlement of the dispute, with minimal time and expense.
Patentees sometimes also consider sending a letter directly to customers or suppliers of an alleged infringer, in the hope of maximising pressure on the alleged infringer. However, Korean courts have been sensitive to the abusive use of a warning letter sent to clients of infringers and have rendered decisions highlighting the risk of using this tactic.
Trend of Korean court decisions
While the Korean Supreme Court has not frequently addressed the liability of patentees enforcing their patent rights, a series of lower court decisions have been rendered involving warning letters sent to customers of alleged infringers. Korean courts have held that patentees are liable for damages caused by their wrongful interference in business relationships where: a warning letter to clients of the alleged infringer incorrectly stated that the subject patent was registered when, in fact, the patent application was actually still pending at the time of issuing the letter; a patentee sent a warning letter without trying to seek judicially available remedies such as a preliminary or permanent injunction; and a patentee sent a warning letter demanding that the customer of an alleged infringer directly contact him instead of the patentee resorting to proper judicial procedures.
Recent district court decision
On May 1 2015, the Seoul District Court applied a stricter standard, finding the attorney of a patentee liable for a tortious act. The court held that sending a warning letter to customers of the alleged infringer, demanding that they terminate their business relationship without taking any legal measures to obtain injunctive relief, exceeded the fair enforcement of a patent right. The attorney raised the defences of legal mistake and compliance with an attorney’s duty. The court rejected those defences, holding that a high degree of care is required when sending a warning letter to clients of the alleged infringer instead of to the infringer himself because such a warning letter is more susceptible to defame and interfere in business activities, depriving the alleged infringer of business opportunities with his clients. The case was appealed and is still pending before the Seoul High Court.
Even though there is a chance that this decision will be reversed on appeal, it is important to recognise the trend of Korean courts to require a high level of care when a patentee sends a warning letter to a third party. To reduce the potential risk of legal liability in relation to issuance of a warning letter, a patentee should be aware that Korean courts apply a stricter standard for a letter to a third party than to an alleged infringer. If a patentee chooses to send a warning letter to third parties, the patentee should refrain from misstating the factual background or sending a letter solely to the third party without seeking other legal remedies in court.