2000Du9229 Revocation of Disposition to cancel Registration of Utility Model

by Supreme Court of Korea

Justices Yoo Ji-dam (Presiding Justice), Son Ji-yol (Justice in charge), Cho Moo-jeh, Kang Shin-wook

Main Issues

1. The meaning of "altering the petitioner's legal relationship," which is the requisite condition for an administrative refusal of a national's petition to become an administrative disposition that is appealable
2. Whether a utility model right holder whose right was illegally or mistakenly registered as cancelled has the right to petition for registration of its restoration (affirmative)

Summary of Decision

1. In order for an administrative agency's refusal of a petition by a national to be an administrative disposition which is subject to appeal, the act to be petitioned must be an exercise of public power or a comparable administrative action, the refusal must alter petitioner's legal relationship, and the national must have legal or logical standing to invoke an administrative action. In this case, altering the petitioner's legal relationship encompasses not only a direct change in the petitioner's legal relationship in substance, but also a material obstruction of the petitioner's exercise of his/her substantive rights.
2. Even if a utility model right is illegally or mistakenly registered as cancelled, such registration does not directly affect the legal relationship of the utility model right holder in substance. Therefore, the refusal of the Commissioner of the Korean Intellectual Property Office (hereinafter referred to as 'the Commissioner') to restore the utility model right that was registered as cancelled does not alter the substantive rights in the utility model right owned by the utility model right holder. However, when the utility model right is registered as cancelled, the utility model right holder is precluded from citing his/her rights in the utility model register and further from engaging in any act that requires registration, such as disposing of or pledging his or her utility model right as collateral. This results in material obstruction in the utility model right holder's exercise of his/her rights, and therefore, the restoration of the utility model registration constitutes an act of directly altering the legal relationship of the utility model right holder. The utility model right holder may request the other party in interest to restore the registration of his/her utility model right which was illegally or mistakenly cancelled due to the other interested party's application, and moreover, if the utility model right was illegally or mistakenly registered as cancelled through the Commissioner's official authority, the utility model right holder has the right to petition the Commissioner for registration of restoration of the utility model right that was once registered as cancelled.

Reference Provisions

1. Article 1 [Overview of Administrative Litigation], Article 2, and Article 19 of the Administrative Litigation Act
2. Articles 29, 34, and 42 of the Utility Model Act, Article 2, Item 1, Article 4, Item 1 and Article 8 of the Utility Model Registration Regulation, Article 101 Paragraph 1 and Article 118, Paragraph 3 of the Trademark Act, Article 13 Paragraph 1 and Article 30 of the Patent Registration Regulation, and Articles 1 [Overview of Administrative Litigation], 2 and 19 of the Administration Litigation Act

Article 1 of the Administrative Litigation Act (Purpose)

The purpose of this Act is to relieve citizens from the infringement of their rights or interests by the illegal dispositions of administrative agencies and the exercise or non-exercise of public power, and settle properly disputes over the rights involved in public law or the application of law, through administrative litigation procedures.

Article 2 of the Administrative Litigation Act (Definitions)

(1) For the purpose of this Act, the definitions of terms shall be as follows:

1. The term "disposition, etc." means the exercise of or refusal to exercise public power by an administrative agency as function of law enforcement in relation to a specific fact, other similar administrative actions (hereinafter referred to as the "disposition") and an adjudication on the administrative appeal
2. The term "omission" means the failure of an administrative agency to take a certain disposition for a considerable period of time, notwithstanding its legal obligation to do so, against an application of a party.

(2) In the application of this Act, the term "administrative agencies" shall include administrative organs, public entities and their organs or private persons delegated or commissioned with administrative power under Acts and subordinate statutes.

Article 19 of the Administrative Litigation Act (Objects of Revocation Litigation)

The disposition, etc. shall be subject to a revocation litigation; provided, however, that in case of a litigation instituted to seek the revocation of an adjudication, it is permitted only when a reason exists that the adjudication itself has a proper illegality.

Article 29 of the Utility Model Act (Registration Fees)

(1) A person who wishes to register a utility model right or the owner of a utility model right under Article 35 (1), shall pay registration fees.

(2) Registration fees for the first year of registration under Paragraph (1) shall be paid simultaneously with an application for a utility model (a divisional application in case of a division under Article 16 or a dual application in case of a joint-filing under Article 17).

(3) Matters necessary for payment of registration fees, including procedures and time limits for payments under Paragraph (1), shall be prescribed by the Ordinance of the Ministry of Industry and Energy.

Article 34 of the Utility Model Act (Mutatis Mutandis Application of Provisions of Patent Act)

The provisions of Articles 80 and 83 of the Patent Act shall apply mutatis mutandis to registration fees and utility model registrations.

Article 42 of the Utility Model Act (Mutatis Mutandis Application of Provisions of Patent Act)

The provisions of Articles 97, Articles 99 through 103, Articles 106 through 116, Articles 118 through 125, and 125-2 of the Patent Act shall apply mutatis mutandis to utility model rights.

Article 2 of the Utility Model Registration Regulation (Prior notice Registration)

Prior notice registration shall be made in the following cases:

1. In case where a lawsuit for cancellation or restoration of registration on grounds of nullification or cancellation of the cause for registration is filed; however, this shall apply to only the case where it is possible to oppose against a bona fide third party with such nullification or revocation.

2.~9. <omitted>

Article 4 of the Utility Model Registration Regulation (Registration by Authority)

The following matters may be registered by the Commissioner of the Korea Intellectual Property Office only by his own authority; provided, however, that the matters falling under items 6 through 10 shall be registered only if a written notice is given by the Chief Judge of the Korea Intellectual Property Tribunal:

1. Establishment or extinguishment of utility model (except by the waiver) and reinstatement of registration

2.~12. <omitted>

Article 8 of the Utility Model Registration Regulation (Mutatis Mutandis Application of Provisions of Patent Act)

The provisions of Article 2, Articles 4 through 7, Articles 9 through 13, Articles 15 through 17, Articles 19 through 22, Articles 24 through 31, Article 31-2, Article 32, Articles 34 through 48 and Articles 50 through 63 of the Decree on Registration of Patent shall apply mutatis mutandis to the registration of utility model and the procedures related thereto and the register of utility model.

Article 101 of the Patent Act (Effects of Registration of Patent Right and Exclusive License)

(1) Unless registered, the following shall be of no effect:

1.The transfer (except through inheritance or other general succession) or extinguishment by abandonment, or restriction on the disposal of a patent right

2.~3. <omitted>

(2) <omitted>

Article 118 of the Patent Act (Effects of Registration of Non-exclusive License)

(1), (2) <omitted>

(3) The transfer, modification, extinguishment or restriction on disposal of a non-exclusive license or the establishment, transfer, modification, extinguishment or restriction on disposal of a pledge relating to a non-exclusive license shall not be effective against a third party unless it is registered.

Article 13 of the Patent Registration Regulation (If registration Is to Be Filed)

(1) Unless otherwise effected by the Commissioner of the Intellectual Property Office by his authority pursuant to applicable laws and regulations, registration may not be effected by any means other than application or request.

(2) <omitted>

Article 30 of the Patent Registration Regulation (Restoration of Cancelled Registration)

When there exists any third person having interest in the registration, upon application for a restoration of a cancelled registration, the said application form should be appended by his letter of consent or a copy of a court judgment opposable against him.

Reference Cases

Supreme Court Decision 84Nu227 delivered on October 23, 1984 (Gong1984, 1858),

Supreme Court Decision 89Nu5348 delivered on December 12, 1997 (Gong1990, 291),

Supreme Court Decision 91Nu4911 delivered on March 31, 1992 (Gong1992, 1442),

Supreme Court Decision 92Nu7542 delivered on December 8, 1992 (Gong1993Sang, 470),

Supreme Court Decision 91Nu8968 delivered on March 23, 1993,

Supreme Court Decision 95Nu13081 delivered on May 14, 1996 (Gong1996Ha, 1886),

Supreme Court Decision 96Nu14036 delivered on July 10, 1998 (Gong1998Ha, 2125),

Supreme Court Decision 98Du18824 delivered on December 22, 2000

• Plaintiff, Appellant: Ye Hae-geum (Attorneys Kim Moon-soo and 4 others, Counsel for plaintiff-appellant)

• Defendant, Appellee: Commissioner of Intellectual Property Office

• Court of First Instance: Seoul Administrative Court Decision 99Gu28926 delivered on April 20, 2000

• Court of Second Instance: Seoul High Court Decision 2000Nu5939 delivered on October 26, 2000

Disposition

The appeal shall be dismissed. All costs of this appeal are assessed against the plaintiff-appellant.

Reasoning

1. The judgment of the court below

Plaintiff filed an application for registration of a utility model on an absorber magnetic device on July 22, 1988, together with Mr. Jeong Hyeong, not a party to this lawsuit. After publication on February 21, 1991, Plaintiff registered the utility model on May 17, 1991 (Reg. No. : 0056701, hereinafter referred to as 'the Utility Model'). On September 27, 1999, Defendant registered the utility model as cancelled pursuant to Article 34 of the Utility Model Act (hereinafter referred to as 'the UMA') and Article 81 of the Patent Act (hereinafter referred to as 'the PA'), on the ground of Plaintiff's failure to pay the registration fees prescribed in Article 29 of the UMA for 9 years during the payment period (payment was due by February 21, 1999, extended due date: August 21, 1999, based on the date of publication). On December 28, Defendant received a petition from Plaintiff for restoration of the registration of the Utility Model, but refused to do so in a letter (hereinafter referred to as 'the Response Letter') of November 15, 1999 on the ground that Plaintiff's utility model registration had already been cancelled. With respect to the main claim seeking revocation of the refusal to remove the cancellation registration of the Utility Model, the court below found that where a utility model registration is cancelled in accordance with Article 34 of the UMA and such cancellation is registered in the original register of the utility model right, there is no provision in the UMA or other related laws that allow the utility model right holder to petition for a removal of the cancellation registration. Also, in light of the fact that the registration of cancellation itself does not bring any direct changes upon any right inherent in the utility model, there should logically be no right to such petition. Therefore, the court below sustained the judgment of the court of first instance that dismissed the petition on the ground that the Response Letter is not an administrative disposition that can be appealed. The court below reasoned that even if the Response Letter had been an administrative disposition, because Plaintiff paid the registration fee after the extended payment period, the registration of Utility Model must have been cancelled in accordance with Article 34 of the UMA. With respect to the conjunctive claim seeking confirmation of Plaintiff's ownership of the Utility Model right, the court below rejected the claim on the ground that the filing of a motion for validation of the existence of a utility model right with an administrative agency does not fall under any category of appeal litigation, party litigation, public litigation, or institution litigation under Article 4 of the Administrative Litigation Act.

2. Judgment of the Supreme Court on the main claim

A. In light of the records, plaintiff's petition to revoke the refusal to remove the cancellation registration of the utility model in its main claim is, in essence, a petition to revoke the refusal to restore the cancelled utility model right. Accordingly, we examine whether such refusal constitutes an administrative disposition that can be appealed.

In order for an administrative agency's refusal of a petition by a national to be an administrative disposition which can be subject to appeal, the act of the petition must be an exercise of public power or a comparable administrative action, the refusal must alter petitioner's legal relationship, and the national must have legal or logical standing to invoke an administrative action. (See e.g., Supreme Court Decision 96Nu14036 delivered on July 10, 1998.) In this case, altering the petitioner's legal relationship encompasses not only a direct change in the petitioner's legal relationship in substance, but also a material obstruction of the petitioner's exercise of his/her substantive rights. (See Supreme Court Decision 91Nu4911 delivered on March 31, 1992; Supreme Court Decision 92Nu7542 delivered on December 8, 1992; Supreme Court Decision 91Nu8968 delivered on March 23, 1993; Supreme Court Decision 98Du18824 delivered on December 22, 2000.)

Even if a utility model right is illegally or mistakenly registered as cancelled, such registration does not directly affect the legal relationship of the utility model right holder in substance. Therefore, the refusal of the Commissioner of the Korean Intellectual Property Office (the Commissioner) to restore the utility model right that was registered as cancelled does not alter the substantive rights in the utility model right owned by the utility model right holder. However, according to Article 101 Paragraph (1) and Article 118 Paragraph (3) of the PA, which are applied mutatis mutandis pursuant to Article 42 of the UMA, the transfer, cancellation by abandonment or restriction on disposition of the utility model right, as well as the creation, modification, and extinguishment of a pledge for a utility model right or exclusive license, or restriction on disposition require registration in order to be effective. In addition, to be effective against third parties, the transfer, modification, extinguishment, or restriction on disposition of a non-exclusive utility model license as well as the creation, transfer, modification, extinguishment, or restriction on disposition of a pledge for a non-exclusive license must be registered. Lastly, in light of its nature, an intellectual property right such as a utility model right cannot be defined other than by a registration. Given this, when the utility model right is registered as cancelled, the utility model right holder is precluded from citing his/her rights in the utility model register and further from engaging in any act that requires registration, such as disposing or pledging his/her utility model right. This results in material obstruction in the utility model right holder's exercise of his/her rights, and therefore, the restoration of the utility model registration constitutes an act of directly altering the legal relationship of the utility model right holder. On the other hand, Article 4 Item 1 of the Decree on Registration of Utility Model (the UM Decree) provides that registration of the establishment, extinguishment (with the exception of abandonment) and restoration of a utility model registration shall be done by the Commissioner ex officio. Article 2 Item 1 of the UM Decree provides that in a case where a lawsuit for that removal of cancellation registration or restoration of extinguished right is filed on the ground of nullification or cancellation of the cause for registration, prior notice of such lawsuit should be made. According to Article 13 Item 1 of the Decree on Registration of Patent (the Patent Decree), which is applied mutatis mutandis pursuant to the UM Decree, no registration may be made, besides by the Commissioner ex officio, without application or request, and Article 30 of the Patent Decree provides that a petition for restoration of a cancellation registration shall accompany a written consent by a third party in interest if there is any, or a copy of a court judgment effective against the third party in interest. To summarize, the utility model right holder may request the other party in interest to restore the registration of his/her utility model right which was illegally or mistakenly cancelled due to the other interested party's application, and moreover, if the utility model right was illegally or mistakenly registered as cancelled through the Commissioner's official authority, the utility model right holder has the right to petition the Commissioner for registration of restoration of the utility model right that was once registered as cancelled. Therefore, if defendant refused the petition for restoration of the cancelled utility model right filed by Plaintiff as one of the utility model right owners, such refusal falls within the class of administrative disposition that may be appealed. The court below's decision that sustained the judgment of the court of first instance which dismissed plaintiff's main claim was in error.

B. The court below, however, did not err on the registration fee due date because Article 7 Paragraph (7) of the Rules on Patent Fees· Registration Fees and Service Fees pursuant to the PA, the UMA, the Design Act and the Trademark Act (the Fees Rules) before amended by the Decree of the Commerce and Industry (the C & I Decree) No. 61 dated July 1, 1997, Article 7 Paragraph (7) of the Fees Rules and Article 2 Paragraph (2) of the Addenda thereto (wholly amended by the C&I Decree No. 61 dated July 1, 1997), and Article 7 Paragraph (7) of the Fee Rules and Article 4 of the Addenda thereto (wholly amended by the C&I Decree No. 69), provide that the due date or extended due date for the utility model registration fee is based on the publication date regardless of the amendments to the above provisions. The Utility Model was duly cancelled because plaintiff failed to pay the registration fee for nine years until August 21, 1999, which was the lawfully extended due date.

C. Although the court below erred in sustaining the judgment of court of the first instance that rejected the petition of the main claim on the ground that the Response was not an administrative disposition, the reversal of the court below's decision and subsequent dismissal of plaintiff's appeal regarding the main claim would be prejudicial to plaintiff since the plaintiff's main claim is groundless. Therefore, we affirm the court below's decision and the grounds for appeal cannot be accepted.

3. Judgment of the Supreme Court on the conjunctive claim

The judgment of the court below on the conjunctive claim is correct. There was neither reversible error in matters of law pertaining to the party's litigation under public law nor incomplete investigation in the trial due to a non-exercise of the right to ask for clarification.

4. Therefore, the appeal shall be dismissed. This decision is delivered with the assent of all Justices who heard the appeal.

Source

• Supreme Court Decision 2000Du9229 delivered on November 22, 2002, Supreme Court Library of Korea