SOUTH KOREA Trends and Developments Contributed by: Samuel Lee, Ye In Han, Inkyoung Choi and Jaeyoung Seol, Bae, Kim & Lee LLC
Bae, Kim & Lee LLC Centropolis B 26 Ujeongguk-ro Jongno-gu Seoul 03161 Korea Tel: +82 2 3404 0000 Fax: +82 2 3404 0001 Email: bkl@bkl.co.kr Web: www.bkl.co.kr/law?lang=en
A New Equilibrium for the Bolar Exemption: Implications for Both Originators and Developers Introduction: resolving patent uncertainty in a globalised supply chain The evolution of Korea as a strategic life sciences hub Over the past two decades, South Korea has under ‑ gone a remarkable transformation in the global life sciences sector. Transcending its historical role as a localised manufacturer of generic chemical drugs, the nation has emerged as a powerhouse for biotechno ‑ logical innovation, a global leader in biosimilars and a critical node in the global pharmaceutical supply chain. This industrial shift is spearheaded by the meteoric rise of Korean contract development and manufac ‑ turing organisations (CDMOs). These entities have invested billions of dollars in securing the world’s largest bioreactor capacities, positioning Korea as the “factory of the world” for complex biologics. Consequently, Korea has become a preferred part ‑ ner for global pharmaceutical companies seeking to outsource the production of both commercial prod ‑ ucts and investigational medicinal products (IMPs) required for clinical development. Simultaneously, Seoul has consistently ranked among the top global cities for industry-sponsored clinical trials, owing to its advanced medical infrastructure, high patient recruit ‑ ment and compliance rates and data quality.
The emerging legal tension: innovation versus patent monopoly However, this rapid industrial sophistication has out ‑ paced the clarity of existing legal frameworks, creat ‑ ing a precarious tension between patent protection and the experimental use exception to patent infringe ‑ ment allowing the preparation and submission of data for regulatory approval – eg, allowing research and development (R&D) to have freedom from patent infringement in order to conduct clinical trials, also known as the “Bolar exception” to patent infringe ‑ ment. The classic patent law model assumes a simple, linear supply chain where a single entity researches, develops, manufactures, and sells a product within a single jurisdiction. The modern reality is vastly different. Drug develop ‑ ment is now a fragmented and globalised process: a candidate substance might be discovered in the Unit ‑ ed States, manufactured by a CDMO in South Korea, and tested in clinical trials across Russia, Europe and South America. In this complex web, legal questions regarding the territorial limits of patent rights have become increasingly acute. The core controversy The most pressing question has been: does the out ‑ sourced production of investigational drugs in Korea, intended solely for clinical trials overseas, constitute patent infringement in Korea? This issue poses a significant dilemma for the industry.
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