Policies to Enhance Korea's
Patent Competitiveness

KIPO deputy commissioner outlines steps to build up constitution in intellectual property

Lee Tae-yong, deputy commissioner of the Korea Intellectual Property Office, said KIPO aims to be a powerhouse of intellectual property through innovating patent administration.
He said, "KIPO is concentrating all of its strengths on accomplishing this vision by continuously promoting its six major strategic goals, which include the provision of the world's best examination/judgment service, operation of an outstanding patent administration information system, promotion of the invention/use of intellectual property and the reinforcement of a protective foundation."The following are excerpts of a written interview with Lee.
Question: Will you tell our readers about Korea's patent competitiveness?
Answer: Because of continuous investments in R&D and technological innovation, the competitiveness of Korea has already reached a world's-top level from the aspect of quantity.
In 2006, there were 166,189 patent applications filed through KIPO, ranking fourth in the world following the United States, Japan and China. The number of international patent applications under the PCT (Patent Cooperation Treaty) totaled 5,935, fifth in the world.
In 2006, there were 120,790 patent registrations, ranking third in the world following the U.S. and Japan.
In the 2007 IMD (International Institute for Management Development) International Competitiveness Indexes, Korea ranked second in the world for "Patent acquisition productivity of domestic people."Korea has received this ranking for three consecutive years. The number of Korean patents acquired by Koreans domestically placed third in the world, while the number of foreign patents acquired by Koreans ranked fourth in the world in 2007.
In spite of such remarkable quantitative accomplishments, the qualitative competitiveness of Korean patents is rather weak.
Looking at the patent reference level, which resembles the qualitative competitiveness of patents, the key industries of Korea such as the semiconductor and automobile industries are still showing weak technological competitiveness.
In the semiconductor industry, Micron Technology of the United States, topped the list with 1.96 patent references, followed by Intel's 1.74, Toshiba's 1.32 and Samsung Electronics'1.01.
Lacking core source patents, which generate high value-added, the revenues and expenditures in the field of technology trading are in the red every year due to excessive patent royalties. Deficits in the field of technology trading widened from US$2 billion in 2001 to $2.4 billion in 2003 and $2.9 billion in 2005.
To enjoy qualitative improvements along with quantitative accomplishments, it is important to secure a dominant position in the fierce patent competition among countries.
Q: Will you elaborate on measures to activate in-service inventions?
A: "In-service inventions"are inventions created by employees, such as a researcher from a company, during his/her R&D or work procedure. Today, most innovative inventions are created at companies, research labs and universities with organized/systemized research facilities and manpower. The ratio of in-service inventions among the overall patent applications stood at 83.7 percent in 2006.
Under the compensation system for in-service inventions, a certain portion of profits generated by commercializing in-service inventions is returned to the employees.
As the compensation system motivates employees to create innovative technologies, the activation of such a system is very important to promote the innovation of national technology.
The compensation system is also effective in preventing such recent issues as the leakage of core technologies.
The Korean government is promoting various policies to activate the compensation system for in-service inventions.
In order to encourage commercial companies to introduce the compensation system voluntarily, the Korean government revised the related act, in force since September 2006, to provide a reasonable compensation standard for in-service inventions.
Before determining the standard and amount of compensation inside the company, a thorough discussion between the employer and employees must be had to ensure the decision is fair and lawful.
KIPO is expanding its promotional measures to improve companies'recognition of the compensation system for in-service inventions.
Through the "Intellectual Property Management Consulting for Small and Medium Enterprises"and "Customer-oriented Presentations on In-service Inventions"KIPO is proposing a compensation system that fits the reality of companies.
KIPO is planning to provide a door-to-door consulting service for 100 small and medium enterprises, as well as 39 presentations on in-service inventions in 2007. It is planning to produce and distribute promotional booklets and informational video clips including the customized regulations of the compensation system for in-service inventions that can reflect the reality of companies.
By cooperating with related agencies, KIPO is putting effort into expanding the political incentives for companies practicing the compensation system. Such incentives include the reduction and exemption of tax for compensations related to in-service inventions.
Q: Will you speak about the infrastructure of the domestic technology trade market?
A: Recently, "Open Innovation,"which aims to accelerate internal technology innovation by using external technology, is rising as the core technological management strategy for many companies. Accordingly, the Korean government is preparing various policies to promote the commercialization of technologies through activating technology transfer.
To prevent the negligence of outstanding patent technologies due to the lack of information and funds for commercialization, and to allow such technologies to be actively traded in the market, KIPO is operating an internet-based patent technology market (IP-MART, www.ipmart.or.kr) to provide information on transferable patents. It will also display outstanding patent technologies by operating a permanent patent technology market and providing consultations on patent technology transfer using experts in patent distribution.
The Ministry of Commerce, Industry and Energy (MOCIE) revised the Technology Transfer Promotion Act in 2000 and established the Korea Technology Transfer Center to support technology transfer and commercialization.
The National Technology Bank (NTB) is supporting the registration of technologies developed by universities and public research agencies. NTB is also providing information related to technology transfer.
Q: Will you introduce measures to reinforce the management of intellectual property by universities/public research labs?
A: As Korean universities and public research labs are not doing so well in quality-based patent management, the performance of Korea's technology transfer is rather inactive compared to major advanced countries. As to the ratio of technological income compared to R&D costs, Korea stood at 1.5 percent in 2006, far lower than Europe's 3.5 percent in 2005 and the U.S." 4.8 percent in 2005. In terms of annual technological income, Korea posted $81.7 million in 2006, compared to Europe's $335 million in 2005 and the U.S." $1.936 billion in 2005.
Korea is weak in every aspect necessary for quality patent management, including expert manpower, budget and operation system.
Patent management experts in charge of strategic patent management based on patents with high utility value, such as outstanding marketability, average 1.6 people (13 percent) per institution, while basic patent management personnel in charge of patent management based on patent administration, such as application, registration, etc., averages four people (33 percent) per institution. Patent utilization personnel in charge of work related to the commercialization of patents, such as patent technology transfer, marketing, etc., each averages 6.5 people (54 percent). The budget for patent management experts averages $411,000 (10 percent), while that for basic patent management personnel amounts to an average of $1.24 million. The budget for patent utilization personnel averages $2.56 million (60 percent).
Policy measures need to be taken to improve the performance of technology transfer by turning the focus of universities'public research labs'intellectual property management systems from quantity to quality.
In order to develop such measures, KIPO has established and promoted 'Measures for Reinforcing Intellectual Property Management,'which includes three policy areas and 21 detailed tasks.
KIPO is supporting the acquisition of patent rights with promising marketability through activating the independent patent application review process by universities and public research labs.
In order to supply funds for patent expenses, 'Patent Management Cost'is required to be put in the budget for national R&D projects.
KIPO is also attempting to revise the evaluation system of governmental R&D projects to focus on qualitative performances, such as technology transfer, rather than quantitative performances, such as patent registration.
In addition, KIPO is planning to launch the 'Evaluation and Authentication System for Intellectual Property Management'to reinforce the ability of universities/public research labs in managing intellectual property.
Q: Will you tell us about the status of survey projects on in-demand technologies?
A: The Korean technology trade market has an unbalanced supply and demand structure, where there are many suppliers and few 'demanders.'The transfer rate of patent technology was measured at an average of 7 percent in 2006 according to the 2006 survey on patent use.
The operation of the system focuses mostly on the suppliers, and as a result, not enough information is provided to those in the market for technology.
Demanded technologies accounts for only about 10.3 percent of the technologies put on the database of the IP-Mart, KIPO's website of the technology transfer market. The rest consists of supplied technology. The number of demanded technologies stood at 3,400 while supplied technologies totaled 33,000. The database of MOCIE's National Technology Bank (NTB) also shows a shortage of demanded technologies, which only makes up about 4.19 percent of the total on the database. The number of demanded technologies stood at 1,300 while supplied technologies totaled 31,000.
KIPO executed a survey project on demanded technologies to change such a supplier-oriented process into a demander-oriented one in 2007.
After studying the technologies demanded by small and medium enterprises, customized technologies that can satisfy such demands are chosen from universities or public research labs.
Then, by opening a 'Consultation for the Transfer of Patent Technology,'technology suppliers and demanders meet each other to discuss technology transfer and the execution of a contract.
Enterprises that are willing to commercialize the technologies transferred through the consultation above are supported through commercialization funds (up to $6.6 million) provided by the Korea Development Bank. Five technology cases - three cases of the transfer of rights and two cases of licensing - have been traded as of October 2007.
Q: Will you describe the patent technology auction service and future plans?
A: To change the passive supporting measures, such as merely providing technology information etc., into measures that can promote technology transfer by providing various trading channels to technology demanders, KIPO introduced the 'online patent technology auction service'in January 2007.
The major flow of the online patent technology auction service can be described as follows: after a technology seller registers a trade type (transfer/license) and a price, bidding commences to select the highest bidder as the priority subject for negotiation. Then, the technology seller and the highest bidder negotiate the final trading terms for entering into a contract. The online patent technology auction service is provided through the internet patent technology market (www.ipmart.or.kr). As of October 2007, 11 transactions worth $126,000 have been made through the auction service. The figure is equivalent to one-third of the 34 technology transactions made during 2006, a remarkable achievement under the auction service system.
In order to activate the auction service in the future:
- KIPO is planning to improve customers'accessibility and convenience by providing the service permanently instead of every quarter-year.
- KIPO is also planning to expand the scope of its service by providing offline patent technology auctions as well, beginning in November 2007.
Q: Will you describe the current status of KIPO's overseas advancement through KIPOnet, the agency's on-line intellectual property information system and its future plans?
A: As the strength of KIPOnet, the world's first internet-based patent administration information system, is recognized throughout the world, foreign patent offices are continuously requesting the transfer of technologies regarding KIPOnet.
For example, KIPO has worked with WIPO (World Intellectual Property Organization) to develop an online receiving system for international patent applications (PCT-ROAD) since 2005, and after developing the system successfully, KIPO provided it to 16 countries around the world including Israel and Canada, receiving high praise from the international community.
In May 2007, KIPOnet was selected as one of the 'Six Major Strategic Tasks for Exporting e-Government,'promoted at the governmental level. The Korean government is actively supporting the advancement of KIPOnet to developing countries.
Currently, KIPO has secured the priority for participating in Thailand's 'Project of Constructing the Intellectual Property Information Center,'with a project budget of $22 million.
Indonesia decided to introduce the 'korean model'for the Indonesian patent administration information project.
Regarding the above, KIPO entered an MOU with the patent offices of Thailand and Indonesia in September 2007 to export KIPOnet.
Vietnam and the Philippines have also formally requested the participation of KIPO in their patent administration information projects. Currently, a preliminary validity survey is underway.
In the future, KIPO will continuously exert political efforts to generate national interest and set the international standard for patent administration information by expanding the export of e-Government IT services.
Q: What are KIPO's medium- and long-term development strategies?
A: As the direction of its medium/long term policies, KIPO has set a vision of becoming a powerhouse of intellectual property through innovating patent administration.
KIPO is concentrating all of its strengths on accomplishing this vision by continuously promoting its six major strategic goals, which include the provision of the world's best examination/judgement service, operation of an outstanding patent administration information system, promotion of the invention/use of intellectual property and the reinforcement of a protective foundation.
The essentials of KIPO's medium- and long-term development strategies include:
- stabilizing the world's fastest examination processing period (9.8 months as of 2006) set by the office in order to become the best-practice model in international patent administration;
- ensuring that both the quantity and quality of patents reach the level of advanced countries by continuously improving the quality of patent examinations through innovation;
- organizing effective laws/systems and providing political support to improve the capacity of innovative bodies such as enterprises, universities and public research labs regarding intellectual properties;
- By inventing and utilizing core source patents, KIPO is aiming to make Korea a 'Patent Surplus Country'with innovative products, services and high value-added.
Detailed policy tasks, such as the establishment of a government-level infrastructure for utilizing patent information, improving small/medium enterprises'capacity for inventing intellectual property and cultivating experts on intellectual property are being actively promoted.
KIPO will reinforce the protection of Korean intellectual properties in foreign countries by establishing an advanced intellectual property protection system and practicing strategic intellectual property diplomacy and by establishing and operating a governmental planning and coordinating system for intellectual property by working closely with related departments/agencies.
As advanced countries including the U.S. and Japan are considering intellectual property strategies as the core strategies for securing continuous dominance in the 21st century's knowledge-based economy, they, too, are putting in great efforts to establish sound intellectual property strategies. nw

Lee Tae-yong, deputy commissioner of the Korea Intellectual Property Office (KIPO)

Deputy KIPO Commissioner Lee Tae-yong and Puangrat Asavapisit, director general of the Department of Intellectual Property of Thailand (DIP), hold up a certificate of an MOU on intellectual property cooperation between KIPO and DIP.