September 17, 2007
Flying The Communist Skies: Air Koryo To North Korea
[Editor's Note: I've never traveled to North Korea, but dearly wish to do so. As an American, the likelihood is slim, alas. I envy PRC Chinese who, following the footsteps of the presumably still incarcerated Yang Bin -- the ex-flower magnate, embezzler and bankrupt of Shenyang who had planned to corner the cross border trade -- flit over to Shinuiju to gamble on the crap tables installed by Stanley Ho of Macao casino fame and fortune.
I long, redheaded, white-skinned Chinese speaker that I am, to turn the heads and fix the eyes of those North Koreans who've never seen a Westerner, as I did with PRC Chinese in the early 1980s. In essence, to turn back the calendar by thirty years and re-visit ancient Asian "communism," still on display in its only remnant, the death defying holdout. I wonder how I would apprehend it this time around. Most likely with the same desperate sadness I did then, but who knows?
I find any first-hand account of North Korea stimulating enough simply to glean any tit-bit of interest, regardless of the quality of the writing. But I discovered the article below on the website of author, Paul Karl Lukacs. Mr. Lukacs writes of his contact with North Korea so vividly and with a finer turn of expression than I have seen in most travelogues these past 50 years. He has kindly agreed to post on Asia Business Intelligence for which I thank him most heartily.
Paul Karl Lukacs is a Hollywood entertainment attorney who recently took a year off to travel and blog through Asia. His blog, Knife Tricks, may be viewed here. He may be reached at this address.]
Flying The Communist Skies: Air Koryo To North Korea
by Paul Karl Lukacs
A flight attendant announced that beverage service would commence thanks to “our Dear Leader Kim Jong-il.”
Air Koryo flight JS152 from Beijing, China, to Pyongyang, North Korea, had been in the air about 20 minutes and had flown about 150 miles. But the entire Air Koryo experience, including the return four days later on Flight JS221, was like flying 30 years back in time. (For plane spotters and North Korea obsessives, I flew tail number P-885 to Pyongyang and P-881 back.)
The plane to Pyongyang was an Ilyushin 62-M, built by the Soviet Union in 1979 and kitted like a set from The Spy Who Loved Me. No cool corporate off-white here. The surprisingly comfortable economy seats were covered in puke green cloth upholstery with an indistinct pink pattern. The cabin’s interior shell was cast in a shade of beige which belonged in a Southern California ranch house from the era of earth tones. The plastic window shades were not opaque but a dark translucent brown.
The tray table was larger than on a contemporary plane, but the netting in the seat-back pouch was strung so tight that a bottle of water could not fit. The flight to Pyongyang had no overhead bins, only racks on which carry-on luggage was placed; the return flight had small bins molded from bile yellow plastic. I wondered where the Soviet designers found their color charts.
* * * * *
The weirdness started at the gate in Beijing’s airport, where I noticed the North Koreans, who are easy to distinguish from other Koreans. North Koreans are the ones wearing red lacquer pins of their late leader General Kim Il-sung (who is still President despite his death in 1994) on their left lapels, over their hearts.
All North Koreans are required to wear a Kim Il-sung pin when outside their homes. There are two principal designs, a large pin with Kim Il-sung’s face on a flag-shaped red background and a second design with the Great Leader’s face set in a small red circle. My North Korean guides later informed me that pins are distributed once a year at work and that there is no significance to the various designs; they are distributed as available.
About one-third of the waiting crowd were North Koreans. Another third were Korean-Americans, South Koreans and Chinese, and the final third were Caucasians. The plane was perhaps two-third full on the inbound journey, and packed on the return.
Three North Korean security officers, in blue uniforms, were standing on the tarmac supervising the loading of luggage onto the plane. I had never before seen that level of official attention given to the loading of luggage.
A plainclothes security officer, in the black pants and black shirt that is the de facto national dress of North Korea, stood at the end of the jetway, immediately outside the aircraft’s door. He scrutinized each passenger as we embarked, but he may also have stood the post to prevent cabin crew from defecting.
The Ilyushin had a strange three-compartment configuration. A small Business Class (in a country without private enterprise) was followed by an Economy section of perhaps ten rows. Next was the galley -- which completely divided the aircraft -- followed by the bulk of the Economy seats. The general seating order seemed to be: North Koreans in front, then Chinese and then other Koreans, with the white Americans at the back of the bus.
Most of the flight attendants looked like cast members from a Korean remake of Blade Runner. The one flight attendant in Business Class was wearing a bright red hanbok, a traditional Korean cloak. The other flight attendants, all women, were dressed in bright red jackets with padded shoulders and a red-and-white candy cane cravat. Each wore white gloves with an embroidered rose on the back of the hand, and each had her hair pulled tightly with a brooch and a small snood over a bun. As is often the case in Asian societies, these women had powdered their faces to look as white as possible, which accentuated their red lipstick and heavy black mascara and eyeliner. Of course, each wore a Kim Il-sung pin over her heart.
Patriotic music was playing as we found our seats. After we settled in, the flight attendants offered a choice of in-flight propaganda. I chose the English-language edition of The Pyongyang Times. The off-lead story – headlined “Books and writings extol Korean leader” – began with the sentence: “The world people in the five continents are highly praising President Kim Il-sung with immense reverence for him.” Great, I quipped to myself, the mathematical computations needed to keep this plane aloft are being made by people who do not know the correct number of continents.
I was placing my life in the hands of a 28-year-old machine built by a country that no longer existed and operated by a country that could not generate enough electricity to power its capital. I had to laugh.
* * * * *
Sitting near the back of an Ilyushin, you feel the thrust. All four engines are bolted to the tail, and you literally feel the airplane being pushed down the runway. The high-pitched whine of the engines is reassuring. Many modern airplanes are so baffled and muffled that you wonder how they reach take-off speed. With an Ilyushin, you know there’s enough power to launch that bird into the sky.
Lunch was served in a hinged plastic tray, with a black bottom and a transparent top. The menu was standard Asian airline grub: smoked meat wedges, cucumber salad with spicy cold chicken, a dinner roll, and rice with gravy and vegetables. The meal was nothing memorable, but it was being served gratis on a 90-minute flight, while American carriers charge for food on flights of up to six hours.
There were a lot of Nos. No video screens. No headsets. No frequent flyer program. No web site. No in-flight magazine (unless you counted copies of Pictorial KOREA; articles included “Ever-victorious Korean People’s Army” and “Japanese Reactionaries Run Amuck To Oppress Chongryon”).
But there were a lot of Yeses. Yes, the cabin looked clean and well-maintained. Yes, the plane departed and landed on time. Yes, the flight attendants were obviously selected for their beauty, common on Asian carriers.
When we crossed the Yalu River, a flight attendant announced that we had entered North Korean airspace. "Sixty-two years ago, our President, Kim Il-sung, came across the river with great ambition for his country and to liberate his country from Japanese imperialism," she said. Of course, by the time of the Yalu River crossing in September 1945, Japan had already surrendered, but I doubt that detail would have made a difference to the pale flight attendant.
* * * * *
I previously noted that Air Koryo received one star from the Skytrax rating service, a score which denotes “very poor standards of product across all travel categories.” After flying these two segments, I think the rating is unfair and beside the point.
Air Koryo should not be judged by the same criteria as Malaysia Airlines or LAN Chile. Air Koryo is its own animal, as unique as a moon lander or a vehicle you would take to the center of the earth.
Air Koryo is a flying circus featuring strangely coifed, vampiric flight attendants who work in a cabin straight out of a 1970s’ airport movie while travelers read palpably insane propaganda as they jet to an isolated dictatorship which is officially governed by a dead man. It’s not a drama; it’s a comedy of the absurd. Embrace the situation, and Air Koryo becomes enjoyable.
Posted by Richard at 12:07 AM | Comments (0)August 20, 2007
Registration and Enforcement of IP Rights in Korea: A Brief Introduction (Part 4)
[Editor's Note: We present our fourth and final installment of our review of the Korean intellectual property system. Prior installments: Part 1, Part 2, Part 3. Once again, let me thank Drambuieman, the author, whose bio you may read in Part 1 of the series.]
Common Scams
Speaking of cyber-squatters, I thought it might be useful to give some tips I have picked up on trademark squatting. Due to issue above with what is considered a famous mark, there are a few bad-faith registration scams in Korea that a company, especially a small or mid-sized one, should be aware of.
At one time, Korea was a very restricted market. Back then, about 10-15 years ago, a distributor, particularly one distributing a foreign mark, needed to be registered at KIPO as such. This aspect of Trademark Law has since been appealed and although the system is no longer mandatory, the registration system still exists in its dusty, bureaucratic, inert way.
While the numbers are declining rapidly, some bad actors still scan this distributor register to identify marks without a distributor listed. Lack of one either signals a mark vulnerable for counterfeiting, or a mark vulnerable for other actions to be mentioned later. So I recommend companies, partially ones without much business (for reasons you will see), register a Korean distributor with KIPO or at least raise the idea with their Korean attorneys.
Another common tactic is what I like to call distributor blackmail. In this a person who hopes to be a distributor of a foreign good (or even an existing one) registers the mark in THEIR name with KIPO. They then use this to gain a distributorship from the company, or use it as a tool to gain a better bargaining position with the foreign maker. Unfortunately the only protection against this is early registration and vigilance.
The last scam can be particularly deadly if used in combination with the two above. Korean law allows a trademark to be cancelled for non-use after three years. So if you register a mark and do not sell of market goods with the mark, the mark could be canceled by anybody and then they would have an exclusive right to apply for that mark for three months. So if you have minimal sales in Korea and are vulnerable, it can helpful if you have Korean sales materials, import records (even if only samples) and perhaps an officially registered Korean distributor (see above).
Like the guy waking up in a bathtub of ice in his Las Vegas hotel room missing a kidney, the above are not guaranteed to happen to you. However, these are some common scams you may want to be aware of. If you have specific concerns, contact your local Korean representation.
Back to the beginning
So what would I recommend to the parts maker? Well, the first idea is to assess what intellectual property rights he currently holds in Korea. If he does not own the trademark, register it as soon as possible. If the current maker owns the trademark, he could argue he is the rightful owner given the fame of his mark internationally, but you may gather from the above that I would not be hopeful of success.
If the parts maker does own the mark in Korea, first, I would contact the customs service with everything I know (name, part type, shipping information, etc.). This would help isolate the problem to Korea. Ideally, the Korean Customs Service will hopefully block any exports and imports of possible counterfeit parts used in the final product.
Second, would be to send a C&D to the Korean manufacturer for either IP infringement and anti-competitive acts (depends on the specifics). Lack of compliance would lead to a criminal complaint.
All this would hopefully stop the problem short to mid term. After that I would be very vigilant about local usage and exports. Unfortunately for Korea, if it happened once, it can happen again.
Posted by Richard at 1:08 PM | Comments (0)August 14, 2007
Registration and Enforcement of IP Rights in Korea: A Brief Introduction (Part 3)
[Editor's Note: We continue from Part 2.]
Quicksand and Other Surprises
First, a present surprise, again contrary to reputation due to the past: Korea’s IP system is largely free of corruption or domestic favoritism. In my five years of working in this field, both in and outside the Korean Intellectual Property Office, the number of times when I suspected there was something nefarious I could count on one hand. Most allegations boil down to either tough calls or a disagreement with the practice and administration of IP law.
One of those disagreements is what constitutes a famous trademark under Korean or International Law. In a nutshell, if your mark is sufficiently famous, you have a de facto defendable trademark. The crux however is what is “sufficiently famous”. Korea sets a very high bar in determining what’s famous. In addition, Korea is strict as well as to the type of goods.
I was involved in a case regarding a very famous copyrighted character with multiple derivative movies, TV shows, and cartoons (some of which did multi-million dollars worth of business in Korea). Yet we were unable to prevent the unauthorized registration of the mark for pet toys and novelties since KIPO determined the character was famous, but not sufficiently so for pet toys.
Since Rich mentioned it in his original post, I think it’s a good idea to bring it up here. Remember Korea is in Asia. This means any contract you may have to ensure confidentiality, like any other contract in Asia, is not in stone. Be sure to keep this in mind as you meet to discuss technical issues. There are trade secret laws, but as always they are hard to prove and may upset your business relations.
Finally, a topical grey area: domain names. Korea is still grappling with the legal and administrative means to resolve national level domain names (e.g. “co.kr”). To be honest, I do not know exactly what to recommend in a general sense, other than saying expect this to be a problematic area.
Posted by Richard at 12:49 PM | Comments (0)August 9, 2007
Registration and Enforcement of IP Rights in Korea: A Brief Introduction (Part 2)
[Editor's Note: We continue from Part I)]
Basic Overview of IP Enforcement Mechanisms
The first thing I can say about enforcing your IP in Korea is “forget civil courts and damages.” Such cases can be long, expensive, long, tedious, long, and can have anticlimactic rulings (oh, did I mention they were long?). For the latter, courts usually only award compensatory damages that can be meticulously accounted for and they almost never give punitive damages. To give you a time frame, an initial decision can take at least a year, and usually you can add another year or so for the appeals process to work out, and the latter makes the reward for patience rarely worth it. To make these options even more unattractive, while you may be able to recover legal fees, they are limited by law and rarely match the actual cost.
However, I actually should not be so dismissive. Civil courts can be a weapon in your arsenal. You will find your Korean lawyers treat it as a weapon of last resort. So should you.
A “dispute” could cover a variety of laws. It could be your standard patent or trademark case. In some cases, however, it may be better to proceed under fair trade laws, called anti-competition or unfair competition laws locally.
If you have an IP dispute, the first move you should normally make is to send a Cease and Desist letter to the infringer. An attempt to settle the manner amicably is seen as a good faith gesture by either the courts or prosecutors office (depending upon your route). It is also incidentally a good internal springboard for the next step, since in a C&D you have to explain what law was violated, how it was violated and show what evidence of the of the infringement you have collected. (You can always add violations and evidence later however if you need to).
The next normally recommended step would be to file a criminal complaint. While cases vary, you usually assert criminal offense based on the Patent Act, the Trademark Act, the Anti-Competition Act, or others (you can find the text at the Ministry of Legislation website). A criminal complaint is usually a statement made in person to the police covering much the same content as the C&D. The filing process for a criminal complaint can be rather involved, so do not be surprised at the cost quoted by local attorneys. Be assured the cost is to cover this time, not the enforcement itself as some erroneously conclude.
In a way, this is partly a negotiating step since it can be withdrawn. Being indicted in Korea is considered a social black eye, thus you may find people more willing to settle once an official criminal complaint is filed. As part of any settlement, you may ask for damages. However, my tip is to keep it minimal, if not a token.
Ultimately you will get an indictment, which is pretty much a conviction. Oddly the penalty the court will give will usually be slight, due to the Korean courts' penchant for lenience for first time offenders. (The conviction itself is usually seen as the big deterrent).
I have come across a few who think is an easy thing to conduct police raids (why, I do not know). In order to conduct a police raid, you need to have complied enough evidence and have a compelling argument to convince the Public Prosecutor’s Office to go before the court, and enough for a court authorize the police raid. I personally have never found a need to conduct one, but have heard that the burden of proof is quite high. A final note here, the cost for a raid is quite small, or even none, when conducted in conjunction with a criminal complaint.
And the last, but by no mean least, tool is the Korean Customs Service. Over the past few years the Customs Service has taken vigorous role in policing counterfeit goods going in and out of the country. If you have a suspicion your IP is being infringed either by import or export, you can inform the Korean Customs Service and they will do the best they can. You can approach them with a general concern, but obviously the more specific you are the more likely catch the goods. Such evidence can be used in a later criminal or civil action.
Posted by Richard at 12:30 PM | Comments (1)August 6, 2007
Registration and Enforcement of IP Rights in Korea: A Brief Introduction (Part I)
[Editor's Note: My scant treatment of Korea on this blog has not been intentional. Occasionally, I've dealt with the topic, blogging on fruitless plans to build highway and rail lines across the DMZ into the DPRK (North Korea); the now imprisoned flower-baron Yang Bin's involvement in resort casinos in Shinuiju across the border from Dandong （丹东）; and, if I remember correctly, something about bibimbap.
Alas, my mind has been elsewhere: in China, the case for these past 25 years. That is not to say that I am a sinophile. I am not. No - China made me a skeptic in the 1980s and I remain so, by experience, not by text. Nevertheless, the idea of it continues to tug gently at me. If ever there was a cauldron of fascination for those who seek to peer into it...
But readers of our next post will find somewhat more of Asia in Asia Business Intelligence than just China. Our next author prefers to remain anonymous, going by the happy epithet, Drambuie Man. You will find his bio in the first three paragraphs of his post. Those who may wish to contact him should contact me first.]
Registration and Enforcement of IP Rights in Korea: A Brief Introduction (Part I)
I first would like to thank Rich Kuslan for the honor of contributing this piece. His blog is one of my regular reads. I was asked by Rich to contribute something on IP law in Korea. As with anything you know a lot about, its tough to limit yourself to what is essential. Thankfully, one of the previous posts here as Chinese IP Law overview provides a good framework. Many parts of that post, particularly the discussion on business practices, goes for the Korean side as well.
The exact position I am in is somewhat unique, given I am not a Korean lawyer nor admitted to the bar anywhere. I started in the IP field on the practical end, first via working with high-tech companies in the US on Korea. While obstensibly doing marketing, I found my at the heart of matters relating to contracting, patents, IP valuations and IP transfers between companies.
For the past five years I have worked roughly as a paralegal (Korean has no exact analogous word in my experience) for the Law Offices of Book Chon, a Korean law firm specializing in all areas of Intellectual Property Law. Within that time, I have also worked for the Korean Intellectual Property Office, the Korean government office responsible for the review and registration of IP in Korea. While with the government, I worked on cooperative projects between KIPO, other national IP offices and multilateral groups, such as the World Intellectual Property Office, due to my knowledge of Korean IP law and the unique perspective I have as non-Korean. When I have time, I blog on Korean IP news at Dram Man, and on things in general at the Marmot’s Hole.
Below I may give what could be inferred as specific advice. It is not. Rather it is my unfortunately blunt style combined with my over eagerness to help when I can. If you have any practical concerns, contact Korean counsel. Your case is unique and special, and should be considered as such.
Rich’s original post found a US company in a problem. Somebody in Korea was counterfeiting its parts and shipping them to China. For obvious reasons, the story stopped there. However, I can give a practical conclusion for that story. First, an overview.
Korea has a certain reputation for bias against foreign intellectual property applicants and rights holders; sometimes that reputation is deserved in individual cases, but on the whole not true. Things in Korea have radically changed with respect to IP Law, and today Korea boasts one of the more advanced IP legal systems.
Korean patent documents are considered so essential that they were included as Patent Cooperation Treaty (PCT) minimum documentation last year, a distinction shared with the US, EU, and Japan. As part of the PCT minimum documentation, Korean patent information must be searched for all PCT applications (method for gaining early recognition of certain rights and later patents worldwide).
Also last year, the Korean Intellectual Property Office became an International Search Authority for the USPTO, an ability shared with the EU. This designation intends to relive some of the workload for the USPTO. PCT applicants can now indicate that their initial international search for a US filed application can be done by KIPO, thus giving confirmation that the quality of patent examination done by KIPO in this area is on par with US and the EU.
IP Registration: Promise, Despite Pitfalls
Unlike China, Korea has one main office handling IP registration, the Korean Intellectual Property Office (KIPO). KIPO handles the registration of patents, trademarks, and designs, but not copyrights. Korea is also part of the Patent Cooperation Treaty and the Madrid Protocol, allowing international applicants to gain early priority.
A pitfall, however, is the seductive similarity of KIPO and its procedures on paper when compared to the US and Europe. For example, drug companies have a hard time with patents because, among many other things, molecules cannot be patented. Korean trademark examiners read English language marks quite closely, and may fail to see a turn of a phrase or unique wording.
For the latter, consider the booming use of the “e” prefix by marketers today (eFile, eBay, eFriend, etc.). Under Korean law a simple letter is considered to be non-distinct. So if you combine it another descriptive or non-distinct word, a KIPO examiner will likely fail to grasp the coinage of the word and reject the mark for being two non-distinct or descriptive words. So for example, consider proposing the mark “e-Pet Quality Pet Shops” for pet shops. A native speaker grasps the uniqueness of the mark, but to a typical KIPO examiner there is little more than the descriptive “Pet Quality Pet Shops” components and a non-distinct common letter “e,” making the mark unregisterable in Korea.
This is not to say necessarily that you will definitely have these problems in trying to register your IP. However, if problems do arise, take a deep breath and realize that Korea is not the US, the EU or even Japan.
If any problems cannot be resolved with written arguments to the initial examiner, you will find you can appeal a decision to the Intellectual Property Tribunal (a KIPO appeals board), then to the Patent Court and finally to the Korean Supreme Court. (A brief note, the Korean Supreme Court is really the highest appellate court circuit; it is not a “Supreme Court” in an American judicial sense.)
Copyrights fall under the Ministry of Culture and Tourism. The system is remarkably similar to the US. There is no requirement to register your gain a copyright, but you can if you wish.
Read Part 2 here.
Posted by Richard at 12:49 PM | Comments (0)
