Successful recovery of the client’s losses on appeal in patent infringement damages case by overturning the first-instance decision after taking over representation for appeal

Lee & Ko’s IP & Technology Practice Group represented VSI, the holder of a patent for an “ionization device,” and reversed a first-instance judgment that had ruled entirely against the client, on appeal in a patent infringement damages lawsuit. Lee & Ko obtained a decision recommending settlement from the IP High Court providing for the payment of damages, thereby securing recognition of the counterparty’s liability for damages, and further successfully enforced the damages claim to recover the client's losses.

The client had filed a damages lawsuit before the Seoul Central District Court, but the court dismissed the claim in its entirety on the ground that the statute of limitations had expired. Lee & Ko then took on the case at the appellate stage before the IP High Court and conducted the litigation.

With respect to the first-instance judgment, which held that the date of the preliminary injunction decision marked the commencement of the short-term statute of limitations, Lee & Ko argued that, given the inherent uncertainty of patent disputes, the injured party cannot be expected to recognize that damage has occurred until the invalidation and scope-of-rights confirmation proceedings have been finally resolved. Lee & Ko further argued that, although a preliminary injunction seeking to prohibit infringement differs in its substance from a damages claim, since both arise from the same underlying legal relationship—namely, the infringement of the patent—the exercise of rights through the preliminary injunction application also interrupts the statute of limitations for the damages claim, and that because this interruption continues for as long as the preliminary injunction remains in effect, the limitations period had not expired by the time the lawsuit was filed. Although the case presented an issue with no precedent, by carefully connecting the reasoning on the material scope of limitations interruption with the progress of the invalidation and scope-of-rights confirmation cases, Lee & Ko secured a determination from the IP High Court that the statute of limitations had not expired. The counterparty accepted the court’s determination and agreed to its recommendation for settlement.

As a result, the settlement decision on legitimate damages was finalized before the IP High Court, bringing the litigation to an early conclusion and successfully securing payment of the damages, so that the client successfully achieved the objectives of the litigation. This case is highly significant in that, in a situation where the client had been at risk of not having its legitimate claim recognized due to the expiration of the statute of limitations and even of having to bear the counterparty’s litigation costs, the client’s losses were recovered by presenting a refined counterargument that a preliminary injunction application also interrupts the statute of limitations for the related damages claim.