Why did a South Korea court invoke the ‘extraterritorial activity’ exception in Prevenar 13 case?
In a patent infringement action filed by Pfizer, the Seoul Central District Court rendered a decision finding that another pharmaceutical company directly infringed Pfizer's composition patent—even though the infringer did not make the patented composition in Korea.
The court ruled on the basis that the infringer manufactured 13 individual conjugate solutions (the essential components of the patented composition) in Korea and then exported them to a company in Russia for the purpose of mixing the solutions into the patented composition (Seoul Central District Court Case No. 2020 KaHap 591823, decided on August 10, 2023).
Legal significance
Korean patent law has strictly respected the principle of territoriality in determining whether acts constitute patent infringement, in that if the patented invention is not actually practised in Korea, Korean courts have found no infringement.
However, in 2019, the Korean Supreme Court rendered a landmark decision in the so-called surgery suture case (Y Jacobs Medical v CS, et al) where an exception to this territoriality principle was recognised for the first time in Korean patent law history.
In the surgery suture case, the accused infringers manufactured all of the components of the patented product in Korea, and then exported them to an entity in Japan which assembled the components into the patented product.
The Supreme Court held that these activities constituted direct infringement of the patent, even though the patented product was not produced in Korea.
In this regard, the Supreme Court specifically held that a patented invention may be considered to be practised in Korea if:
(i) all of the components of the patented product or semi-finished products having all essential components of the patented product are produced in Korea (first element);
(ii) the components are exported to a single entity in a foreign country for the purpose of being processed or assembled into the patented product (second element); and
(iii) the processing or assembling is so insignificant or simple that merely manufacturing the components or semi-finished products has reached the state where the functional effects of the patented invention can be realised (third element).
Until now, this has been the only Korean court decision finding infringement on these terms. However, the Seoul Central District Court has now applied this earlier Supreme Court decision to find direct infringement in the patent infringement action filed by Pfizer, making this the second case in Korea to recognise an exception to the territoriality principle.
This new case has additional significance in that whereas the earlier Supreme Court decision was directed to a relatively simple medical device, the new decision found the same principle still would apply to a complicated vaccine case.
Facts
Claim 1 of Korean Patent No. 10-1298053 is directed to an immunogenic composition for use as a 13-valent pneumococcal conjugate vaccine (PCV), which comprises 13 distinct polysaccharide-protein conjugates, together with a physiologically acceptable vehicle, wherein each of the conjugates comprises a capsular polysaccharide from a different serotype of Streptococcus pneumonia conjugated to a carrier protein.
A Korean company, SK Bioscience, entered into a technology transfer and licence agreement with a Russian company, and assisted them with obtaining product approval from the Russian regulatory authority, as well as supplying them with the 13 individual conjugate solutions as well as the finished products.
The Russian company obtained product approval of the finished products, which were produced using the 13 individual conjugate solutions supplied by SK.
Parties’ arguments
Pfizer argued that under the logic of the Supreme Court’s decision in the surgery suture case, SK was infringing its patent by manufacturing the 13 individual conjugate solutions in Korea, and then exporting them to a single company in Russia for the purpose of mixing them into the patented composition.
In response, SK argued that:
(i) the patented composition should only be interpreted to cover the composition of the finished products which are ready to be administered, and not a bulk composition/simple mixture of the individual conjugate solutions alone, due to the phrase “for use as a 13-valent pneumococcal conjugate vaccine” in Claim 1;
(ii) the Supreme Court’s earlier decision in the surgery suture case should be limited to simple mechanical inventions, and should not apply to highly complicated vaccine cases; and
(iii) the process of mixing the 13 individual conjugate solutions to make the patented composition was not simple or insignificant since it involved very complicated controls and procedures.
District court’s decision
- Interpretation of claim
The district court applied well-established legal principles of claim interpretation, affirmed in several earlier Supreme Court decisions, to rule that the scope of Claim 1 was not limited to covering only the composition of the finished vaccine product (ie, a product completely formulated to be ready to be administered), but also covered a bulk composition to be made by mixing the 13 individual conjugate solutions in a predetermined ratio, for the following reasons:
