Korea's US patent aid pays for lawsuits an American co-owner can still block

Under US federal court precedent, an infringement suit over a jointly owned patent must in principle name every holder as a plaintiff, so an American partner that cites litigation costs and declines to join leaves its Korean co-owner unable even to file ^[12]. Seoul's package pays for cease-and-desist letters and lawsuits ^[4]. On a co-owned patent, that money can be spent only if the partner agrees to sue ^[17].

Licensing runs the other way. In Korea, a co-owner cannot grant a non-exclusive license without the consent of the other owners ^[10]. In the US, a single co-owner can license a third party on its own and owes the other owners no share of the royalties ^[11]. Taken together, the American partner in a joint venture can license a shared invention to an outside firm and keep the entire royalty. It also decides whether the Korean side gets to sue anyone else who uses it ^[18].

Joint ownership comes up in exactly the setting the package was built for. It is meant to cut infringement and leak risk for Korean companies setting up US units, forming joint ventures with American partners and running joint research and development, with some of the resulting technology registered as US patents ^[8]. The Seoul Economic Daily, which reported the plan, judged much of the package weighted toward advice and training, and said consulting alone cannot resolve problems that stem from the two legal systems ^[9].

The paper reported that patent experts want the government to intervene on licensing and litigation consent, and that KIPO has taken no action ^[13]. Asked what steps were being prepared, an official said, "There is no policy currently being pursued at the government level." ^[14]

The head of one non-practicing entity said joint-ownership contracts should secure advance consent to grant non-exclusive licenses and an agreement to cooperate on patent lawsuits ^[15]. "Since this stems from differences between Korean and U.S. law, the government should take an active role in drawing up a joint manual to protect our companies, which are in the weaker position," the executive said ^[16]. Those clauses are private contract terms. They have to be won in negotiation, by the party the executive describes as weaker ^[15].

The reporting does not include a budget figure, so what the government will spend on each of the first 90 or so firms is unknown ^[6].

There are a few ways this goes. Advisers paid under the package could write consent and cooperation clauses into joint-venture contracts as routine, closing much of the gap privately. The government could draft the joint manual the executive wants, though the official's answer puts that outside current policy ^[14]. Or firms sign standard terms with the consulting in hand and meet the problem only when a partner licenses a shared patent or sits out a suit. We think the third is the likeliest for the smaller firms, because the published scope of the patent consulting covers filings, design-arounds, defense and enforcement, and joint-ownership contract terms are not on the list ^[4]. The counter-case is that a clause is the cheapest fix available and the package's advisers are well placed to insist on one. If the first cohort's joint-ownership agreements come back with advance licensing consent and litigation-cooperation clauses, the half-a-solution criticism in the paper's report ^[9] will have been wrong.