On April 14, 2022, the Korea Trade Commission (KTC) issued administrative fines for infringement of a FinFET patent against three foreign companies. This is the first KTC action in which monetary fines were issued against foreign entities for selling infringing goods to Koreans. Previously, sanctions against foreign entities were limited to injunctions while administrative fines were assessed only against Korean entities (e.g., importers of infringing goods).

The KTC is a Korean government agency (similar to the US ITC) responsible for supervising the Korean system for import-related injuries and serves to prevent unfair trade practices. Unlike the courts, the KTC has powers to conduct its own investigations to determine whether a domestic industry has been harmed by imports or unfair trade practices as well as to recommend relief measures. The KTC has the authority to commence an investigation upon petition by any party or even independently. 

Recently, KIP (the IP management arm of a prestigious Korean University, Korea Advanced Institute of Science and Technology) filed a complaint with the KTC for investigation of unfair trade practices for violation of its FinFET patent (KR Patent No. 10-458288) around June 2021. The KTC found that three foreign companies infringed KIP's FinFET patent through sales of CPUs and graphic cards to Korean customers, and imposed monetary fines of KRW 9.4 million (approx. USD 7,500), KRW 460,000 (approx. USD 360), and KRW 450 million (approx. USD 360,000).

Although the KTC is authorized to issue fines for selling infringing goods to Korean entities, there are no practical means of enforcing the fines against foreign entities (if the foreign entity does not have a presence in Korea). The KTC's standard practice has been to impose only injunctive relief against foreign entities. The KTC broke from this long standing practice for the first time (there was also no need to issue an injunction because the FinFET patent had already expired in August 2021). Thus, we will have to see how the monetary fines are collected. 

Although it is unclear whether the KTC will continue to assess monetary fines against foreign entities, we will continue to monitor for developments and provide updates.