SOUTH KOREA Trends and Developments Contributed by: Samuel Lee, Ye In Han, Inkyoung Choi and Jaeyoung Seol, Bae, Kim & Lee LLC
• For originator companies (patent holders), unau ‑ thorised production under the guise of “research” threatens to erode their patent monopolies. They fear that allowing such production creates a loophole for competitors to stockpile commercial inventory or facilitate early market entry under the pretext of development, thereby undermining the value of their intellectual property. • For developers and CDMOs, the lack of legal clar ‑ ity has created a “chilling effect”. Without a clear exemption, Korean CDMOs faced the risk of patent infringement lawsuits simply for fulfilling contracts to produce clinical trial materials (CTM). This uncertainty threatened to stall legitimate R&D activ ‑ ities and divert high-value manufacturing contracts to other jurisdictions with clearer legal exemptions. The landmark 2025 ruling In this high-stakes context, the Supreme Court of Korea’s ruling in 2025 (Case No 2025Da202970) serves as a watershed moment. The Court addressed this ambiguity head-on, delivering a decision that fun ‑ damentally reshapes the boundaries of the experi ‑ mental use exemption in Korea. By moving beyond a rigid, textual interpretation of the law to a more func ‑ tional, industry-aware approach, the Supreme Court has established a new legal standard. This article provides an in-depth analysis of the rul ‑ ing, contrasting the strict constructionism of the lower courts with the Supreme Court’s teleological reason ‑ ing, and explores the newfound “safety valve” test that will govern future disputes in the life sciences sector in Korea. Legal framework: Korea’s Bolar exemption in a comparative context To understand the significance of the 2025 ruling, it is essential to first understand the statutory basis of the exemption and how it compares to global standards. Article 96 (1)(i) of the Patent Act The cornerstone of this dispute is Article 96 (1)(i) of the Korean Patent Act. The statute stipulates that the exclusive rights of a patent holder do not extend to “working for the purpose of research or experiment”. The legislative intent behind this provision is to strike a balance between two competing public interests:
• incentivising innovation – granting inventors a tem ‑ porary monopoly to recoup their investment; and • promoting technological progress: ensuring that the existence of a patent does not block third par ‑ ties from studying the invention to improve upon it or to create alternative solutions. Ideally, this provision serves as a “safe harbour”, allowing R&D for new drugs or generics to proceed without fear of litigation. This ensures that once a pat ‑ ent expires, the public can immediately benefit from cheaper generics or improved biosimilars, rather than awaiting additional years for the development and regulatory process. Comparative analysis: the global standard The concept of exempting experimental use is well- established globally, though the specific scope varies. Korea’s provision is often compared to the US Bolar exemption, named after the landmark case Roche Products, Inc. v Bolar Pharmaceutical Co . • United States: Following the Roche decision, which held that experimental use for regulatory approval was infringement, the US Congress enacted 35 U.S.C. Section 271 (e)(1) (the Hatch-Waxman Act). This statutory safe harbour broadly exempts from infringement any use of a patented invention “reasonably related to the development and sub ‑ mission of information under a federal law which regulates the manufacture, use, or sale of drugs”. It focuses heavily on the regulatory purpose. • European Union: The EU does not have a single harmonised patent law, but most member states have implemented the Bolar provision. Further ‑ more, the Unified Patent Court Agreement (UPCA) and national laws generally permit experimen ‑ tal use aimed at generating data for regulatory approval, reflecting a policy consensus that R&D activities should not be blocked. • WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agree ‑ ment”: Article 30 of the TRIPS Agreement allows members to provide limited exceptions to the exclusive rights conferred by a patent, provided such exceptions do not unreasonably conflict with normal exploitation of the patent.
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