[1] In a case where a final and conclusive judgment, etc. of a foreign court orders compensation for damages that the party actually suffered, whether recognition may be limited based on Article 217-2(1) of the Civil Procedure Act (negative)

[2] Whether it is permitted to review in full the entirety the right and wrong of a final and conclusive judgment, etc. under the pretext of examining whether the result of the recognition of the final and conclusive judgment, etc. by a foreign court is contrary to good morals and other social order

[3] The method of determining whether the result of recognition of a final judgment, etc. by a foreign court is contrary to the good morals and other social order of the Republic of

[1] Article 217-2(1) of the Civil Procedure Act provides, “Where a final and conclusive judgment, etc. on compensation for damages bring about a result significantly contrary to the laws of the Republic of Korea or the basic order of international treaties concluded by the Republic of Korea, the court shall not approve the whole or part of the relevant final and conclusive judgment, etc.,” which is established to limit the approval of a final and conclusive judgment of a foreign court ordering payment exceeding the scope of compensation for damages or a judgment recognized as the same effect (hereinafter “final and conclusive judgment, etc.”) as punitive damages. Thus, in cases where a foreign court’s final and conclusive judgment, etc. orders compensation for damages to compensate for the damages actually suffered by the parties, the approval may not

[2] According to Article 27 (2) 2 of the Civil Execution Act, Article 217 (1) 3 of the Civil Procedure Act and Article 217 (2) 3 of the Civil Procedure Act, recognition of the effect of a final judgment of a foreign court or a judgment with the same effect (hereinafter referred to as "final judgment, etc.") is a requirement for the recognition and enforcement of a foreign judgment that does not violate the good morals and other social order of the Republic of Korea, and it is not permitted since it goes against Article 27 (1) of the Civil Execution Act, which provides that "a judgment of execution shall be conducted without examining the right and wrong of the judgment," which provides that "a judgment of execution shall be conducted in full on the grounds that the result of approval of the final judgment, etc. goes against good morals and other social order."

[3] Article 217(1)3 of the Civil Procedure Act provides that approval of a final and conclusive judgment of a foreign court or a judgment with the same effect (hereinafter “final and conclusive judgment, etc.”) shall not be contrary to the good morals and other social order of the Republic of Korea as one of the requirements for approval of a foreign judgment. Here, at the time of determining whether approval of a final and conclusive judgment, etc. is contrary to the good morals and other social order of the Republic of Korea, the recognition of a final and conclusive judgment, etc. should be determined in light of the degree of relationship between the case in which the final and conclusive judgment, etc., intended

[1] Article 217-2(1) of the Civil Procedure Act / [2] Articles 27(1) and 27(2)2 of the Civil Execution Act, Article 217(1)3 of the Civil Procedure Act / [3] Article 217(1)3 of the Civil Procedure Act

[2] Supreme Court Decision 2002Da74213 Decided October 28, 2004 (Gong2004Ha, 1937) / [3] Supreme Court Decision 2009Da68620 Decided May 24, 2012

Cummins-Baison Corporation (Law Firm Shummins et al., Counsel for the plaintiff-appellant)

SB Co., Ltd. (Attorney Shin J-jin et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2014Na1463 decided December 11, 2014

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal on the scope of application of Article 217-2(1) of the Civil Procedure Act

A. Article 217-2(1) of the Civil Procedure Act provides, “Where a final and conclusive judgment, etc. on compensation for damages bring about a result significantly contrary to the laws of the Republic of Korea or the basic order of international treaties concluded by the Republic of Korea, the court shall not approve the whole or part of the relevant final and conclusive judgment, etc.” This provision is established to limit the approval of a final and conclusive judgment of a foreign court ordering payment exceeding the scope of compensation for damages or of a judgment recognized the same effect as the punitive damages (hereinafter “final and conclusive judgment, etc.”) to the appropriate scope. As such, where the final and conclusive judgment, etc. of a foreign court orders compensation for damages which actually suffered by the parties, its approval may not be limited

B. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

(1) The plaintiff (hereinafter referred to as the "U.S.") patent right, i.e., (registration number 1 omitted), patent (registration number 1 omitted; hereinafter referred to as the "806 patent"), patent (registration number 2 omitted); patent (hereinafter referred to as the "456 patent"); patent as to equipment and method to rapidly identify and rate the face value of the earth and rocks; hereinafter referred to as the "456 patent"); (3) patent (registration number 3 omitted); (4) patent as to equipment and method to distinguish various face values of many countries (registration number 4 omitted; hereinafter referred to as the "354 patent"); and (3) patent as to equipment and method to distinguish the surface value of the earth from the surface value; and (4) patent as to equipment and method to distinguish the surface value of the earth from the surface value of each country; and (354 patent); from 2003 to the United States, the defendant is a corporation of the Republic of Korea export and sale of the earth and its price (hereinafter referred to as the "U.S.S.A-U.A-U.A-U.A-U.A-U.A-U.A-U.S.A-U.S.

(2) The 354 Patent had already existed prior art called “Jetcan 4062” prior to the filing date. However, the 354 Patent application is deemed to have been filed as a continuous application of the U.S. (application No. 1 omitted) and its filing date was retroactively applied on March 7, 1995, the filing date of the application (application No. 1 omitted), which is the filing date of the prior art, and accordingly, it is deemed to have been filed within one year from November 1, 1994, which is the filing date of the prior art, and was registered as a patent upon meeting the requirements for newness under the U.S. Patent Act. Moreover, the 806 Patent contains the content that “the identification of the face value of the paper is at least 800 square meters per minute.” This is limited to the numerical scope of the elements of the invention.

(3) On September 30, 2007, the Plaintiff filed a lawsuit against the Defendant and Rock seeking compensation, etc. for damages arising from patent infringement on the ground that the Defendant’s ground of patent closure coefficient (hereinafter “Defendant’s product”) sold in the U.S., for the purpose of infringing the Plaintiff’s patent, was jointly and severally with the Plaintiff, USD 12,962,70.47 ($ 11,898,279, 508, 866, 9136, 9747, and 976, 8508, 91347, and 2545, 365, etc. of the judgment of the first instance court of the U.S. (hereinafter “the judgment of the first instance court of the U.S.”). On October 30, 2009, the first instance court of the U.S. paid the Plaintiff the damages amounting to the Plaintiff and the Defendant’s damages amounting to the patent (hereinafter “the Plaintiff’s patent”).

(4) The first instance judgment, among the sales volume of the Defendant’s product, calculated the lost profit in the manner of calculating the sales volume that would have accrued to the Plaintiff in the absence of patent infringement, and calculated the Plaintiff’s loss by calculating reasonable royalty and adding reasonable royalty to the sales volume that would not have accrued to the Plaintiff. In calculating the lost profit, the court applied the exhibition value rule based on the total prices of the products that the Plaintiff could have sold in the calculation of lost profit. Such lost profit and reasonable royalty both constitute compensatory damages, and do not include punitive damages such as punitive damages.

(5) On May 25, 2012, the Defendant appealed to the Circuit Appellate Court of the United States Court for the United States of America (hereinafter “the second instance court of the United States”). On May 25, 2012, the second instance court of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the judgment (hereinafter “the judgment of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of the United States of

C. We examine these facts in light of the legal principles as seen earlier.

Article 217-2(1) of the Civil Procedure Act provides that approval may be limited until the final and conclusive judgment, etc. of a foreign court ordering compensation for damages order a compensatory damages order. As such, the Plaintiff’s damages recognized by the U.S. judgment cannot be deemed to exceed the scope of compensatory damages, the recognition of the U.S. judgment cannot be limited based on Article 217-2(1) of the Civil Procedure Act.

The judgment of the court below to the same purport is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on interpretation of Article 217-2 (1) of the Civil Procedure Act.

2. As to the ground of appeal on the patent recognition of the U.S. judgment of this case

A. According to Article 27(2)2 of the Civil Execution Act, Article 217(1)3 of the Civil Procedure Act and Article 217(1)3 of the Civil Procedure Act, recognition of the effect of a final judgment, etc. of a foreign court does not violate the good morals and other social order of the Republic of Korea, and it is a requirement for the recognition and enforcement of a foreign court's judgment, and it is substantially contrary to Article 27(1) of the Civil Execution Act, which provides that "a judgment of execution shall be conducted without examining the right and wrong of the judgment, etc.," which provides that "a judgment of execution shall be conducted without examining the proper and proper of the judgment, etc., and it is not permitted since it goes against the purport of establishing a separate enforcement judgment system for the final judgment, etc. of a foreign court (see Supreme Court Decision 2002Da74213, Oct. 28, 2004).

B. The lower court: (a) granted the U.S. judgment ordering compensation for damages on the ground that the Defendant’s assertion as follows, i.e., recognition of a new invention or infringement of a patent recognized by the U.S. special system that recognizes the inventive step of a pending invention, constitutes an infringement of a patent recognized by the U.S.-specific system that recognizes the inventive step of the pending invention, is beyond the scope of protection “patent” under the laws of the Republic of Korea and the international treaty in which the Republic of Korea is a party to the Republic of Korea; (b) even if the foreign judgment contains a content based on the system not adopted by the Republic of Korea, such circumstance alone cannot be deemed as failing to meet the requirements under Article 217(1)3 of the Civil Procedure Act; and (b) re-determination of whether a patent is new and an inventive step of a patent 354 pursuant to the Korean Patent Act and its subordinate statutes constitutes an examination of the right and wrong title of the U.S. judgment; and (c) recognition or non-obviousness of the patent invention in Korea’s patent application system and public order cannot be determined retroactively by Korea’s patent law.

In light of the above legal principles and records, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles on the recognition of foreign judgments.

3. As to the ground of appeal on the calculation method of damages adopted by the U.S. judgment of this case

The court below acknowledged the amount of damages calculated based on the total price of the plaintiff's product in accordance with the Exhibition Value Act as excessive compensation against the limited liability principle, which is the basic principle of damages in Korea. As to the defendant's assertion that the approval should be restricted pursuant to Article 217 (1) 3 of the Civil Procedure Act or Article 217-2 (1) of the Civil Procedure Act, the court below held that the ratio of contribution to the patent can be 10% if the patent technology infringed under the patent system of Korea becomes a critical opportunity to purchase the product. This is not in essence different from the exhibition value law of the United States in calculating the total value of the product if the patented part constitutes the basis of consumer's demand, and thus, it is difficult to determine that the lost profit of the patentee can be deemed as excessive compensation for the reason that it is not against the principle of fair compensation of the patentee in light of the circumstance that the plaintiff's sales or profits exceed the defendant's profits, or that it is not against the principle of fair compensation of the plaintiff's damages.

In light of the above legal principles and records, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles on the recognition of foreign judgments.

4. As to the ground of appeal on internal relations

Article 217(1)3 of the Civil Procedure Act provides that the recognition of a final and conclusive judgment, etc. of a foreign court does not violate good morals or other social order of the Republic of Korea as one of the requirements for recognition of the foreign judgment. Here, at the time of determining whether the result of the recognition of the final and conclusive judgment, etc. violates good morals or other social order of the Republic of Korea, the recognition of the final and conclusive judgment, etc. should be determined in light of the degree of relationship between the case in which the final and conclusive judgment, etc. has impact on basic moral belief and social order to be protected by Korean domestic law and the relevant final and conclusive judgment, etc. (see Supreme Court Decision 2009Da686

The lower court determined that the approval of the instant U.S. judgment cannot be limited solely on the following grounds: (i) the issue at issue in the instant U.S. judgment is a matter of infringement against good morals and other social order; (ii) the damages recognized in the instant U.S. judgment cannot be deemed to exceed the scope of compensatory damages; and (iii) the amount of damages recognized in the instant U.S. judgment cannot be deemed to be exceeding the scope of compensatory damages; and (iv) the recognition of the instant U.S. judgment cannot be deemed to be contrary to good morals and good morals, even if the Defendant could not obtain the approval of the instant U.S. judgment in the event of bankruptcy crisis, in light of the following: (i) the issue at issue in the instant U.S. judgment is that the patent right registered in the U.S. corporation is infringed in the U.S.; (iv) the place where tort and the patent right is committed; and (v) the U.S. judgment should be determined in accordance with the U.S. patent law; and (v) the method of calculating damages cannot be deemed to be deemed to be contrary to good morals.

In light of the above legal principles and records, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the recognition

5. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Sang-ok (Presiding Justice)