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Eulsoo Seo Counsellor, SMEs Divsion World Intellectual Property Organization

Overview of the National IP Policies and Services in Korea and Presentation of Their Best Practices. Eulsoo Seo Counsellor, SMEs Divsion World Intellectual Property Organization. Contents. 1. Economic Growth and Intellectual Property of Korea 2. Why SMEs are important in Korea

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Eulsoo Seo Counsellor, SMEs Divsion World Intellectual Property Organization

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  1. Overview of the National IP Policies and Services in Korea and Presentation of Their Best Practices Eulsoo Seo Counsellor, SMEs Divsion World Intellectual Property Organization

  2. Contents 1. Economic Growth and Intellectual Property of Korea 2. Why SMEs are important in Korea 3. Road to the IP-centered Government of Korea 4. SMEs Support Policies on IP in Korea 5. Recommendation and Suggestion

  3. 1. Economic Growth andIntellectual Property of Korea

  4. Economic Growth in Korea Average annual GDP growth rate of 14.3% Average annual per capita GDP growth rate of 12.7% GDP per capita GDP $20,045 $969.9b $20,000 $1,000b $500b $10,000 $2.1b $82 $2b $80 2007 Year 1961 GDP GDP per capita <<Source : Bank of Korea>> ㅍ

  5. Some Facts on Industrial Power of Korea Product World market share (%) Company Semiconductors 49 Samsung Electronics, Hynix Semiconductor TFT-LCDs 46.5 Samsung Electronics, LG Display PDPs 54.0 Samsung SDI, LG Electronics LNG carriers 80.0 Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering Co. Petrochemical Products 45 LG Chem, SK Large diesel engines for ships 59.6 Hyundai Heavy Industries, Doosan Engine Co., STX Heavy Industries Refrigerators 14.3 Samsung Electronics, LG Electronics. Air-conditioners 22.3 LG Electronics, Samsung Electronics

  6. The Number of Patent Applications Korea’s Status in Intellectual Property (1) Patents PCT 426,000 (1) 54,000 27,000 20,000 13,000 6,000 460,000 360,000 260,000 160,000 60,000 52,492 (1) 409,000 (2) 27,714(2) 17,793 (3) 173,000 (3) 166,000 (4) 7,059 (4) 61,000 (5) 5,459 (7) Republic of Korea Germany USA Japan China The No. of Patent applications (Ranking) The No. of PCT applications (Ranking)

  7. Some Indicators of Patent Intensity Korea’s Status in Intellectual Property (2) The Number of Resident filings per million dollars of R&D expenditure The Number of Resident filings per billion dollars of GDP 5 4 3 2 1 130 100 70 40 10 129.10 (1) 5.08 (1) 103.53 (2) 3.37 (2) 1.82 (3) 22.38 (3) 20.77 (4) 18.82 (5) 0.72 (10) 0.91 (8) USA Republic of Korea Japan Germany New Zealand The Number of Resident filings per billion dollars of GDP (Ranking) The Number of Resident filings per million dollars of R&D expenditure (Ranking) <<Source : WIPO Patent Statistics 2007>>

  8. Patent Applications and Economic Growth in Korea 250,000 900 800 200,000` 700 No. of applications GDP of Korea 600 150,000 GDP (Billion dollars) Number of applications 500 400 100,000 300 200 50,000 100 0 0 1970 1975 1980 1985 1990 1995 2000 2005

  9. “ Intellectual property is the key to economic development in a knowledge-based economy” • Advanced countries • Keep IP promotion as a priority mission • Strive to establish an infrastructure of IP automation

  10. 2. Why SMEs Are Important in Korea?

  11. Number & Percent of SMEs in Some Countries (2006) Key Stats of SMEs in Korea (1)

  12. Shares of Patent Applicants in Korea (2006) Key Stats of SMEs in Korea (2) (Thousand)

  13. Top 10 Patent Applicants of SMEs in Korea (’04-’08) Key Stats of SMEs in Korea (3)

  14. 3. Road to the IP-centered Government of Korea

  15. Enacted the First Patent Decree Enacted the First Patent Law Korean Patent Office Established the International IP Training Institute Set up the Special Budget Account for IP Admn. First Sharp Increase of Patent Application Second Surge of Patent Application Patent Bureau under the Commerce Department 1992-96 1948 -76 1988 1977 1979 1946 1905 1987 Brief History of IP Administration in Korea (1)

  16. Established IP automation planin 1995 Three-years of development Launch of the world’s first Internet-based e-filing system for patent applications The highest e-filing rate in the world 2007 Brief History of IP Administration in Korea (2) 100 80 60 40 % 97% 97% 49% 32% Republic of Korea USA EU Japan

  17. Brief History of IP Administration in Korea (3) Korean patent documents included in the PCT minimum documentation (Apr. 2007) Korean language as a PCT language of publication (Jan. 2009) Korea conducts International Searches and International Examinations for eight countries: - (2002)Philippines, Vietnam; (2003) Indonesia; (2004) Mongolia, Singapore; (2005) New Zealand; (2006) USA, Malaysia * International search requests from foreign applicants (2006) 735 → (2007) 2,853 → (May 2008) 4,337

  18. Brief History of IP Administration in Korea (4) Strategy 1. IP-Hub Korea KIPO as a World-class IP Administrative Office Expansion of International Examination Cooperation and Development of Global IP System Contribution to Make Global IPR Community for Co-prosperity and Humanity KIPO VISION Strategy 2. Takeoff to an IP Powerhouse Top-class Country Based on IP in the 21st Century Fostering Leading Companies with World-class IPRs Facilitating Growth of IP-Creating Industries Developing Human Resources with High Quality in the IP Field Strategy 3. Conversion into Pro-IP Society Promoting Social Climate for Respecting IPR Reforming Compensation System for Creative Activities Establishing Business-friendly Judicial System on IP Improving Efficiency of IPR Administrative System

  19. 4. SMEs Support Policies on IP in Korea

  20. Organigram of KIPO

  21. Organigram of JPO

  22. Designating May 19 as the National Invention Day (1957) Enacting the Invention Protection Act (1958) Awarding the Invention Prize (1959) Upgrading Ceremony of the National Invention Day (1982) Holding the First Good Invention Exhibition (1982) Subsidizing International Patent Applications (1982) Enacting the Invention Promotion Act (1994) Opening the Consulting Center on IP Commercialization (1994) Opening the Inventors Hall of Fame (1999) Conducting the IP Holding Campaign for SMEs (2000) Establishing the Regional IP Consulting Centers (2004) Distributing Patent Maps for SMEs (2004~) 1950s 1980s 1990s 2000s Brief History of IP Support Programs for SMEs in Korea

  23. Overview of IP Support Programs for SMEs Happy CEO Program: Making CEO of SMEs be confident in global business with successful IP Management

  24. IP Support Programs Customized to SMEs • (Advanced) high knowledge & understanding, requirement of specific IP support program • (Intermediate) good knowledge & understanding, requirement of broad IP support programs • (Beginner) low knowledge & understanding, requirement of intensive IP support programs IPknowledge &understandinglevels, requirement levels for IP Support

  25. Pre-Assessment of IP Management Example 1: Beginner SME – WithSolution Security Equipment Company, est. in ‘08 CEO had high IP interest, but classified as IP Beginner due to recent establishment - only 1 patent pending at the time • No employee invention compensation & trade secret protection policies • Requires basic understanding of IP • Requires intensive IP management consulting

  26. It consists of pre-assessment, customized consulting and after service IP Management Consulting for SMEs On-site Intensive Consulting Forming Dream Team Linking Dedicated Staff • KIPO expert provides consulting on site at the company * ’06: 34, ’07: 101, ’08: 147 SMEs • Patent Management Consulting * basic patent management, application & management strategy, using patent data, Handling patent conflicts • Online support through IP portal (www. Ipp.or.kr) Request & apply Select sme pre-assess In-depth consulting Continued support

  27. R&D & Commercialization Support Patent Search Customized for Local SMEs Fostering Patent Star Companies through Selection and Focus One Roof Total Service: 30 Regional IP Centers Improving Local Economy

  28. Robust IP SME ‘09 Earnings: 500% growth (expected) Successful IP Management ’08 Earnings: 400M(KRW) Result of the WithSolution • Implementing employee invention compensation & trade secret • protection policies • Holding Brainstorming sessions • Setting up future IP strategy based on patent map analysis

  29. Pre-Assessment of IP Management Example 2: Intermediate - Adbiotech Start-up SME (est. in 2000) • Animal Science, Food and • Cosmetics • Holding 3 patents & 5 trademarks • and having high interest in IP rights, • but do not have IP management • strategy A Staff in charge of IP was not able to focus on IP affairs and to build up his expertise due to other duties ▶ Requires IP-specialized staff and professional training

  30. IP-specialized Staff Training On-site Training Customized for SME Level

  31. Robust IP SME Export aim in ’12: 15B KRW With core patents Upgraded staff expertise Low staff expertise Result of the Adbiotech • Filed patent application drafted by its staff • Developed a new technology based on several prior • arts that was searched by its staff • Skilled up its IP-specialized staff

  32. Example 3: Advanced SME –Dacc Aircraft Components Manufacturer [est. in ’02) Medium sized business with high R&D ability, which was founded as a spin-off from Korea Aerospace Industries Ltd. (research institutes) . Pre-Assessment of IP Management Aggressive R&D investment and Uses govt’l R&D projects efficiently for new tech. development, But, did not carry out systemic IP management

  33. Protection from Future IP Disputes IP Dispute Prediction System and Insurance System Patent Dispute Prediction Sys. IP Insurance System • Reports on patent trolls • Provide international • patent dispute maps • Provide technology- • based patent dispute • maps • IP Insurance • Support costs for IP • disputes • 25 companies joined Conduct its business without concerning possible IP disputes

  34. Result of the Dacc • Continuously monitoring on the possibility of disputes • Developing new technologies based on patent dispute maps, • designing around major blocking prior arts Robust IP SME Top 5 in world by 2012 Possess core patents Prep. for possible disputes

  35. Pre-Assessment of IP Management Example 4: Advanced SME – Buwon • Kitchen hand blender manufacturer • Taking up 75% or more of Korean kitchen hand blender market • Entered Chinese market in 2007 but failed. • In 2008, reentered Chinese market Dominated its Korean market with its high technology But failed in Chinese market because its Korean brand was not well-known in China

  36. Non-English Local Brand Support Program Expanding into New Markets with Localized Brand Customized Support for SME Brand From Brand Strategy to Registration • Full support from hiring a brand designer to trademark registration • Providing expertise of KIPO, KOTRA and University for developing high-quality brand • Providing local brand strategy consulting and supporting brand development and registration • Support for development and registration of localized brand based on local languages, cultures, and environments. • In 2008, 5 companies benefited • In 2009, requested from 57 Results

  37. Result of the Buwon Before After Buwon Elec. Success of Buwon • 1-day home shopping sales increased 20x : 40 units (’08.12) → 800 units (’09.2) • Requests for sale from home shopping outlets : 1 outlet (’08.12) → 30 outlets (’09.2)

  38. Best Practice of SMEs IP Management in Korea - MBI Negotiating licensing out with a Japanese company MBI: R &D of Bike Parts KIPO: Support for Int’l Applications • MBI Co. Ltd.: Very small company specialized in bike parts with only 6 employees, and almost zero sales • Developed a breakthrough of internal transmission, having 3-speed hub gear through long R&D for10 years • KIPO subsidized $20,000 for international patent applications in U.S. Japan, China, Europe and Russia • Holding patents for internal transmission in about 40 countries • Won a patent invalidation litigation with Shimano, a Japanese major bike maker • Negotiating licensing out with Shimano, claiming 700 million dollars as royalty

  39. 5. Recommendation and Suggestion

  40. Recommended Strategy to Be an IP-centered Country (1) Beginning Stage Incorporate and Transform Good Foreign IP System Into Its Domestic Version e.g.First Patent Law (1946), Chemical Compound Patent (1987) Enhance the IP Awareness e.g. Invention Protection Act (1958), IIPTI (1987) Collection of Lots of Foreign Patent Information

  41. Recommended Strategy to Be an IP-centered Country (2) Intermediate Stage Strengthen IP Automation Infrastructure e.g.First Internet-based e-Filing System (1999) Encourage IP Commercialization e.g. Consulting Center on IP Commercialization (1994) Design Around Dominant Foreign Patents

  42. Recommended Strategy to Be an IP-centered Country (3) Advanced Stage Encourage International Applications e.g.Subsidizing International Patent Application (1982), PCT ISA/IPEA (2002) Enhance IP Management e.g. Patent Map (2004), Regional IP Consulting Center (2004) Select and Focus its Own Strong Industry with IP e.g. IT Industry (2000s)

  43. Conclusion: Pop-up Quiz Which one do you think is not protected by patent? A: Cell Phone B: Car C: Segaway D: Corn Plant

  44. Thank you!For further enquires contact eulsoo.seo@wipo.int

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