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RECORD OF DISCUSSION "PRIVATE"
1. Representatives of the Governments of the Republic of Korea and of the United States of America held a series of consultations from November, 1985 to July, 1986 in Seoul and Washington. concerning the opening of the Korean insurance market and protection of foreign intellectual property rights in Korea.
2. As a result of the consultations, understandings were reached on the measures to be taken by the Government of the Republic of Korea on both matters subject to the approval of the respective governments. The contents of the understandings reached between the two sides are attached.
3. Based on these understandings and in anticipation that the measures to be taken by the Government of the Republic of Korea will proceed as scheduled, the U.S. Government agreed to terminate the investigation of the Korean insurance market, as well as the protection of intellectual property rights initiated under Section 301 of the Trade Act of 1974, as amended.
4. As of the date both governments notify each other of their approval, the understandings set forth in the attached annexes will be implemented and the 301 investigation will terminated.
For the Government of the Republic of Korea For the Government of the United States of America
Annexes: 1. Exchange of letters on insurance 2. Exchange of letters on process patents 3. Record of understanding on intellectual property 4. Explanatory letter on administrative guidance.
Dear (ROKG Official):
I have the honor to acknowledge receipt of your letter of today's date which reads as follows:
Dear Ambassador Yeutter:
This letter sets forth measures that the Government of the Republic of Korea (ROKG) will undertake in connection with insurance practices.
A. NON-LIFE INSURANCE
1. The ROKG will license two U.S. firms to underwrite compulsory fire insurance and will assist the two U.S. firms to become admitted to the fire pool in all geographic areas by July 31, 1986.
2. The allocation of premia and risks within the fire pool is not subject to government regulation or control, but is a matter of private agreement. Accordingly, the method of allocating premia and risks within the fire pool will be negotiated and, decided upon by the participating firms, including participating U.S. firms. The ROKG will provide support for a fair and reasonable system of allocation of premia within the fire pool. In this regard, it is understood that U.S. firms will participate in the fire pool on the basis of the same allocation formula that applies to Korean firms participating in the pool. This principle would Permit U.S. firms, under the current allocation formula, to share equally, in premia distribution within the pool. Subsequent to the date of this letter, the U.S. firms referred to in paragraphs A. 1. and A. 2. will participate fully in any reformulation of the distribution of premia. It is understood that any change in the current formula would be through agreement among all t
he insurance firms participating in the pool including the two U.S. firms referred to in paragraphs A. 1. and A. 2. It is understood that the U.S. firms operating in the pool will not share risks and participate in the allocation of premia for the buildings owned by the government or defense contractors. It is further understood that the proportional share of underwriting activity in the fire pool represented by the buildings owned by the government. Or defense contractors will not change significantly. Should either government so request, the two governments shall consult in the consultative mechanism concerning this issue.
B. LIFE INSURANCE
The ROKG will license at least one branch of a U.S. insurance firm to underwrite life insurance by the end of 1986.
C. ADDITIONAL LICENSES
The ROKG will license qualified U.S. insurance firms to underwrite life and non-life insurance in Korea. Korean insurance authorities will be prepared to receive license applications as soon as the section 301 case is terminated, and will provide all necessary information as to the technical requirements for submitting applications. All applications will be reviewed in a timely fashion and decisions rendered on the qualifications of U.S. firms will be provided in writing.
D. CONSULTATIVE MECHANISM
The ROKG and the United States government agree to consult through the Korea-U.S. Economic Consultation Trade Subgroup regarding (1) any matters relating to the implementation of the understanding reached with respect to the 301 case on insurance (e.g., complaints about specific practices, the operation of the fire pool, technical and administrative matters and new entrants to the market) and (2) other issues on insurance of interest to either party. Consultations in the Trade Subgroup concerning regulatory and capitalization requirements, reinsurance and retention levels will begin in August 1986 and proceed according to a schedule to be developed by the two governments with a view to reaching specific understandings during 1986.
It is our understanding that, in recognition of these measures, the United States Government has terminated the investigation into insurance practice in Korea initiated under section 301 of the Trade Act of 1974, as amended.
Sincerely
ROKG Official
Based on the commitments contained in your letter, and in anticipation that implementation of these commitments will proceed as scheduled, the United States Government has terminated the investigation into insurance practices in Korea initiated under section 301 of the Trade Act of 1974, as amended.
Sincerely
Clayton Yeutter
EXCHANGE OF LETTERS ON PROCESS PATENTS
Dear ROKG Official:
I have the honor to acknowledge receipt of your letter of today's date which reads as follows:
Dear Ambassador Yeutter:
This letter sets forth the measures to be taken by the Government of the Republic of Korea (ROKG) to provide product patent protection for certain pending process patent applications.
Applications for process patents that are pending in Korea on the effective date of the new law may be amended to include product patent claims upon the request of the applicant. The opportunity to submit product claims will be in effect for 90 days following the effective date of the Korean patent law. The specific procedures for filing such amendments will be substantially the same as those contained in the existing law.
Sincerely,
ROKG Official
I acknowledge your letter as an integral part of the resolution of the section 301 case on intellectual property protection.
Sincerely,
Clayton Yeutter
RECORD OF UNDERSTANDING ON
INTELLECTUAL PROPERTY RIGHTS
A. COPYRIGHTS
l. The Government of the Republic of Korea (ROKG) will draft a comprehensive copyright bill which will be submitted to the National Assembly before the end of September 1986. The ROKG will exert its best efforts to ensure that the legislation is enacted so as to become effective no later than July 1,1987.
2. The ROKG will accede to the Universal Copyright Convention (UCC)and Geneva Phonograms Convention and will take the necessary steps to obtain the approval of the National Assembly for accession so as to make those conventions effective with respect to Korea within 90 days of the effective date of the new copyright law.
3. The copyright law which is enacted will be comprehensive in coverage, will provide protection to traditional works, e.g those enumerated in Article I of the UCC, and will conform to the UCC. Copyright protection for computer programs will be recognized in the new copyright law.
4. Copyright protection for computer software will be described in the Computer Program Protection Law, to become effective at the same time as the new copyright law. The provisions of the Computer Programs Protection Law will be consistent with the copyright protection afforded other literary works. An inter-ministerial committee (the Program Deliberation committee) will be established by law to ensure that administration of copyright protection for software conforms to administration for other works.
5. Protection for sound recordings for a term of 20 years will be included in the new copyright law as a neighboring right, complementing the existing Phonograms Law. In addition, the protection of sound recordings against unauthorized reproduction, importation and distribution will be strengthened through stricter enforcement of Korea's Phonograms Law.
6. The ROKG will study the feasibility of protection to data bases as compilations. In the mean time, the new copyright law will provide for protection of copyrightable works whether or not they are incorporated in a data base.
7. The ROKG will study the feasibility of extending protection to semiconductor chips with an intention to provide protection against unauthorized reproduction.
8. The ROKG will study satellite telecasts and cable TV, with a view toward protecting them under the new copyright law.
9. The ROKG will implement the translation compulsory licensing provisions in the new copyright law and the implementing regulations to conform with Article Vter of the UCC. The provisions of the new copyright law concerning the use of copyrighted works for the purpose of school education shall be implemented in a manner fully consistent with international copyright as reflected in the fair use provisions of the Tunis Model Law on Copyright for Developing Countries. Provisions permitting the reproduction of computer software when the author is unknown or cannot be found will be implemented in a manner consistent with the provisions of Article Vquater of the UCC.
10. The ROKG will strengthen penalties against copyright infringement under the new copyright law so that the rights of both domestic and foreign copyright owners can be protected effectively. Such penalties will be consistent with the nature and severity of penalties for other offenses under Korean law.
11. The ROKG will extend liability for copyright infringement under the new copyright law to include the same entities (sellers and distributors) as may be found liable for violation under Korea's Motion Picture Law and Phonograms Law.
12. The new copyright law will provide a term of life plus 50 years for works whose authors are individuals, and a term of 50 years from first publication in the country of origin for works authored by juridical entities, such as corporations
13. Through administrative guidance, printed materials copyrighted in the United States and published during the ten year period, and computer software created and first published in the five year period prior to the year in which the new copyright law becomes effective will be prevented from unauthorized reproduction, publication and distribution from the effective date of the new copyright law. As for sound recordings, video recordings, motion pictures and performances, through stricter enforcement of relevant laws, the ROKG will deny permission for their importation, reproduction, publication, or distribution (deny approval of application in the case of performances) in the absence of a valid license or contract.
B. PATENT RIGHTS
I. A comprehensive bill to amend the patent law to include patent coverage for chemical and pharmaceutical products and new uses of chemical and pharmaceutical products will be introduced to the National Assembly by the end of September 1986. The ROKG will exert its best efforts to secure enactment of the bill by the end of 1986. Regulations, guidelines and other administrative mechanisms will be formulated so that applications for patents may be accepted by the Office of Patents administration no later than July 1, 1987.
2. In drafting the proposed legislation, the ROKG will establish a patent term of 15 years from the date of publication of the patent application.
3. Measures related to Articles 45 and 59 of the patent law will be modified so that non-exclusive licenses will be granted only in those situations in which the dependent patent represents a substantial technical advance over the dominant patent.
4. Measures related to Articles 51 and 52 of the patent law will be modified to reduce the discretionary power of the Office of Patents Administration to grant non-exclusive licenses.
5 . Patent protection for new microorganisms will be effective at the same time as for chemical products and pharmaceuticals.
6. Korea will accede to the Budapest Treaty in 1987.
7. Through administrative guidance, certain products which are patented in the United States after January 1, 1980, but are marketed neither in Korea nor in the United States prior to the effective date of the new patent law, will be protected by denial of permission to manufacture or market such products in Korea without authorized permission of the United States patent owner(s) for ten years from the effective date of the amended Korean patent law. The identification of these products will be decided upon in the consultative mechanism no later than the effective date of the amended Korean patent law.
C. TRADEMARKS
1. The ROKG amended Article 24 of the Presidential Decree accompanying the Foreign Capital Inducement Act to remove the requirement for technology inducement as a condition for accepting applications for trademark licenses. By removing this requirement, the trademark license will be permitted to continue beyond the life of the accompanying technology inducement agreement, and joint venture or raw material supply agreement will no longer be necessary for trademark licensing.
2. Korea has completely repealed export requirements on goods covered by trademark licenses, and has lifted restrictions on royalty terms in licenses, under the new Ministry of Finance guidelines established in September 1985. No other restrictions, such as restrictions on duration or amount of royalties, are imposed on trademark licenses.
3. Under the new Office of Patent Administration guidelines established in 1984, import bans or restrictions constitute "just cause" under Articles 20 and 45 of the Trademark Act, thereby precluding cancellation for non-use or rejection of renewal of a trademark registration of goods subject to such restrictions.
4. Korea has adopted and implemented guidelines which prohibit domestic entities from registering trademarks that are identical to or resemble those owned by foreign entities, regardless of whether the foreign Mark is "well known" in Korea.
D. ENFORCEMENT
The ROKG will exert its best efforts to ensure adequate protection of intellectual property rights through strict enforcement of the relevant laws, and will make public administrative rules and regulations affecting the protection of intellectual property rights. The ROKG also will ensure adequate protection of proprietary data, direct all Korean law enforcement agencies to give high priority to enforcement of intellectual property rights, and will enact effective penalties for intellectual property rights violations.
E. CONSULTATIVE MECHANISM Korea and the United States agree that consultations will be held under the auspices of the Korea-U.S. Economic Consultation Trade Subgroup regarding (1) any matter relating to the implementation of the understanding reached with respect to the 301 case on intellectual property rights and (2) other issues related to intellectual property of interest to either party.
Based on the commitments contained in this record of understanding, and in anticipation that implementation of these commitments will proceed as scheduled, the United States Government has terminated the investigation into Korea's protection cf intellectual property initiated under section 301 of the Trade Act of 1974, as amended.
For the Government of the Republic of Korea For the Government of the United States of America
Dear ROKG OFFICIAL:
I have the honor to acknowledge receipt of your letter of today's date which reads as follows:
Dear Ambassador Yeutter:
With reference to the Record of Understanding, concerning protection of U.S. intellectual property rights in Korea, I am pleased to provide herewith an explanatory letter on the administrative guidance referred to in paragraphs A.13 and B.7 of said Record of Understanding to be taken by the ROKG for protection of certain U.S. copyrights and patents.
The measures to be taken by the ROKG through administrative
guidance are as follows:
COPYRIGHTS
Through the strict application of administrative guidance, based on the provisions of the Law on Registration of Publishers and Printers, the ROKG will use every available means to prevent the unauthorized reproduction, publication and distribution of U.S. copyrighted printed materials. Administrative guidance will be applied to all U.S. copyrighted printed materials created or published during the ten year period prior to the year in which the new copyright law becomes effective. Such protection will he provided as of the effective date of the new copyright law.
The ROKG will enforce this administrative guidance by means including denying or revoking registrations for publishers or printers who engage in the unauthorized reproduction, publication or distribution of U.S. copyrighted printed materials.
Through the strict application of administrative guidance, based on relevant laws, the ROKG will use every available means to prevent the unauthorized reproduction, publication, and distribution of copyrighted computer programs. Relevant laws would include the Engineering Service Promotion Law, which requires registration by data processing companies. For those companies not yet registered under this law, the ROKG will require them to register. The ROKG will enforce this administrative guidance by means including denial of registration and of financial benefits provided under relevant laws such as the Engineering Service promotion Law and the Technology development Promotion Law. Such protection will apply to all U.S. copyrighted computer programs created or first published during the five year period prior to the year in which the computer program protection law becomes effective. This protection will be provided as of the effective date of the computer program protection law.
The ROKG will deny permission for the importation, reproduction, publication or distribution of sound recordings, video recordings and motion pictures in the absence of a valid license or contract which establishes that the importation, reproduction, publication or distribution would not infringe a U.S. copyright. The ROKG will deny approval of performance applications in the absence of a valid license or contract which establishes that the performance is authorized by the U.S. copyright holder.
The ROKG will impose penalties on those who infringe U.S. copyrights. Such penalties will include imposition of fines, incarceration, cancellation of licenses and registrations and denial of financial benefits. These actions and penalties will be based on Korean laws, including the Law on Registration of Publishers and Printers, the Phonogram Law, the Motion Picture Law and the Performance Law.
PATENTS
The ROKG will not permit the manufacture or marketing of products marketed neither in Korea nor in the United States prior to the effective date of the amended Korean patent law and which are patented in the United States after January 1, 1980; this denial of permission to manufacture or market will apply for 10 years. A list of products meeting the above definition will be provided by the United States. The consultative group will meet to confirm both governments concur that a reasonable burden of proof must be borne by applicants to ensure a manageable process. These discussions will be completed no later than the effective date of the amended Korea patent law. Administrative guidance will be enforced through the denial of domestic production, marketing and sale approvals in the absence of evidence that the U.S. patent holder has authorized such manufacture and marketing, assuming the validity of the U.S. patent.
The ROKG agrees to review on a regular basis in the consultative mechanism the operation of administrative guidance. In this regard, the consultative mechanism will be used to resolve expeditiously specific matters involving misappropriation of intellectual property rights.
Sincerely,
ROKG Official
I acknowledge your letter as an integral part of the resolution of the section 301 investigation on intellectual property protection.
Sincerely,
Clayton Yeutter,