The Korea Advanced Institute of Science and Technology (KAIST) is reported to be in the process of suing to "allow them to pay the unpaid patent fees." After losing in the first trial, they have appealed and moved to the second trial. While it is common to file lawsuits repeatedly to "receive money," it is rare to demand repeated trials to "pay money." What is the story behind this?
The lawsuit filed by KAIST is against the Korean Intellectual Property Office. Even if one holds a patent, the rights may be extinguished if the patent fees are not paid on time. KAIST is currently in court trying to regain its rights by belatedly paying the patent fees for two patents that it held.
On April 29, 2019, KAIST registered two patents with the Korean Intellectual Property Office. Along with the patent registration, they also paid three years' worth of patent fees. This was done in accordance with the patent law, which states that the first three years' worth of patent fees must be paid in a lump sum on the date of registration. There were no issues up to this point.
However, issues arose when the fourth-year patent fees were not paid on time. KAIST intended to assign the payment of the patent fees to a professional company, Company A, through the patent attorney who registered the patent. However, it was revealed that the attorney did not pass the patent fee payment work to Company A, while reporting to KAIST that the work had been assigned to Company A.
Ultimately, KAIST lost its rights as it failed to pay the fourth-year patent fees even by the "additional payment deadline." Furthermore, they missed the "restoration registration application deadline," which was their last chance to regain their patent rights, solidifying their loss of rights.
After belatedly realizing this fact, KAIST stated that it would pay the unpaid patent fees. However, the Korean Intellectual Property Office did not accept this, stating, "KAIST has not paid the patent fees without justifiable reasons during this time." Consequently, KAIST has filed a lawsuit against the Korean Intellectual Property Office.
The Seoul Administrative Court's Administrative Division 12, presided over by Director General Kang Jae-won, issued a ruling against KAIST in March.
The court noted, "It appears that the negligence of the patent attorney was the main cause of the non-payment of the patent fees," but also emphasized that "the patent holder, even if they delegated the patent fee-related tasks directly or indirectly to others, has a general duty to verify whether they complied with the payment deadlines and other related matters."
The court further stated, "KAIST merely repeated requests to assign patent fee management tasks to the attorney, but during the 3 years and 6 months leading up to the patent's expiration, there were no records of KAIST being billed for patent fee payments by Company A, and they failed to check whether the management responsibilities were properly fulfilled. It is difficult to see that KAIST fulfilled its duty as a patent holder."
The court also commented, "Even if the Korean Intellectual Property Office did not properly notify of each patent fee payment notice, this cannot be considered a justification for a violation of the patent holder's duty of care."
KAIST appealed against the first trial verdict. Prior to this, KAIST argued that "to diligently pay the patent fees, we decided to delegate patent fee management tasks to a company and fulfilled our general duty of care, but due to issues that arose during the transfer of responsibilities, there were 'justifiable reasons' for not paying the fees." They requested the court to apply the patent law provision allowing a patent holder who has not paid fees due to 'justifiable reasons' within the additional payment period, or not maintained within the preservation period, to pay or restore the patent fees within two months from the date such reasons ceased.