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The Supreme Court Clarifies the Limits of Application of Res Judicata in Patent Cases


Under Article 163 of the Patent Act, res judicata prevents a re-trial of a final and conclusive IPTAB patent decision "based on the same facts and evidence," but does not apply to IPTAB decisions based on a "rejection" for non-substantive reasons. However, there has been some ambiguity in Korean law regarding whether certain types of "rejection" decisions might still be proper grounds for a later dismissal on res judicata grounds, if they involve some substantive review of the evidence presented. The Supreme Court has now clarified that res judicata cannot be invoked based on any decisions constituting a "rejection," even if the rejection involved some level of substantive review, as it would exceed the scope of Article 163 to treat any "rejection" as equivalent to a dismissal decision on the merits (Supreme Court Decision No. 2021Hu10077 rendered on June 3, 2021).

The principle of res judicata in IPTAB cases is set forth in Article 163 of the Patent Act, which provides that "[i]f a trial ruling rendered under this Act becomes final and conclusive, no person may demand re-trial, based on the same facts and evidence, provided that the foregoing shall not apply where the final and conclusive trial ruling is a rejection." In other words, the Patent Act gives res judicata effect to the IPTAB's decisions, for the purpose of preventing inconsistent decisions and abusive litigation and to promote efficiency in resolving patent disputes, unless a particular decision involves a "rejection" for non-substantive reasons (such as lack of standing).

While Article 163 indicates that res judicata does not apply to a petition that is "rejected" without a review on the merits (Articles 141 and 142 of the Patent Act), an ambiguity can arise in some cases because "same evidence" in this context can mean "not only the same evidence as that of a previous trial ruling that became final and conclusive, but also evidence that is not strong enough to overturn said ruling" (see Supreme Court Decision No. 90Hu1840 rendered on November 26, 1991). As a result, it has been possible for a case to be rejected on res judicata grounds even if it involved evidence that is literally different from a prior final decision on the same patent (such as new prior art references), if the IPTAB substantively reviewed the new evidence and determined it was "not strong enough" to overturn the prior ruling, and therefore constituted the "same evidence" as the prior ruling.

The instant case involved review of a patent invalidation petition that was rejected on res judicata grounds because it involved the "same evidence" as a previous invalidation decision involving the same patent, which had already become final and conclusive. The previous decision also involved a rejection on res judicata grounds over an earlier original decision upholding the validity of the same patent, and had been confirmed by the Patent Court. Both the first and second rejections for res judicata involved different prior art references from the original case, but the Patent Court determined that those references were still substantially the "same evidence" as those presented in the original case. However, the Supreme Court clearly ruled in Decision No. 2021Hu10077 rendered on June 3, 2021 that a "rejection" cannot have res judicata effect, for the following reasons:

  • The doctrine of res judicata is essentially a formality requirement for a petition for trial, and it would be beyond the scope of Article 163 of the Patent Act to treat any "rejection" decision as equivalent for res judicata purposes to a dismissal decision after a substantive trial on the merits, even if some review of evidence may be required.
  • While res judicata serves the purposes of seeking to prevent abusive litigation and contradictory trial rulings, this is counterbalanced by the fact that the right to petition for trial is an equally important right, and it is difficult to justify acknowledging exceptions to the treatment of "rejections" under Article 163 to allow them to have res judicata effect as to third parties.

Interestingly, while the Patent Court had earlier upheld the first res judicata rejection (as noted above), on remand in the second res judicata case, the Patent Court held that if a trial presents only new evidence that does not overlap with the evidence submitted in a previous final and conclusive trial ruling, the new evidence does not constitute "same evidence," and would not be subject to res judicata effect (Patent Court Decision No. 2021Heo3680 rendered on November 25, 2021).

In this case, the Supreme Court's decision did not change the substantive outcome, because even though the rejection on res judicata grounds was determined to be improper, the Patent Court on remand still held that the patent was inventive over the new references presented, and thus apparently still considered them not strong enough to overturn its initial ruling of validity. However, the Supreme Court's decision and the Patent Court's decision on remand did clarify the meaning of "same evidence" in Article 163 of the Patent Act and that "rejection" decisions under Article 163 are not merits decisions for res judicata purposes, which should clarify application of the res judicata doctrine in Korea going forward.

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#Patent #2022 Issue 1