With the rapidly increasing number of disputes related to industrial property rights lately, lawsuits and adjudications, which cause increases in costs and time are becoming a huge financial and time burden for small and medium enterprises and individuals. To alleviate such burden, the current Act introduces the industrial property rights dispute mediation system to allow the mediation of a dispute at low cost over a short period.

According to the Korean Intellectual Property Office’s data, 53 out of 157 cases filed for mediation from 2016 to 2018 have succeeded while 101 failed for a failure rate of 64%. Its practical remedial benefit is quite low. The reason the failure rate is so high is that if the respondent does not attend even though an application is filed for mediation, mediation is considered to have failed and the mediation procedure comes to an end.

In particular, 8 out of 10 cases where small and medium enterprises or individuals filed an application for dispute mediation against large enterprises came to an end as large enterprises did not respond. If a dispute is not resolved by the above mediation system, the dispute moves on to a lawsuit or adjudication, which incurs extensive financial and time burdens, and it runs counter to the intended purpose of the system, which was promoted as being beneficial for small and medium enterprises and individuals.

A dispute regarding industrial property rights costs 58 million won on average and takes 40.2 months up to the third trial, and the above system is used by small and medium enterprises and individuals without extensive financial resources and time as an alternative for a lawsuit or adjudication. Since small and medium enterprises and individuals account for 96% of the dispute mediation applicants, it is necessary to improve the system’s practical remedial benefits.

The technology mediation dispute system by the Ministry of SMEs and Startups, which is similar to the above system, proceeds with a mediation procedure although the respondent does not attend, and has a higher percentage of mediation meetings and resolutions, which maximizes practical remedial benefits for small and medium enterprises.

In this regard, this Act aims to allow for proceeding with a mediation hearing on the scheduled day even if either party does not attend without any justifiable reason and considers mediation to have not succeeded only if both parties do not follow an attendance request 2 times without any justifiable reason, thereby improving the practical effectiveness of the industrial property rights dispute system (Article 45 paragraphs 2 and 3).

Article 45