Economic Vitality and Intellectual Property Rights Discussion at Hanyang University May 26, 2005

Presentation Overview Korea’s current economic situation What are intellectual property rights (IPR) and what role do they play in a vibrant knowledge-based economy? Assessment of Korea’s IPR efforts Goal: Increase understanding of the link between IPR protection and economic vitality

Korea’s rapid economic development 6.8% per annum growth of per capita income between 1966 and 1996 Welcomed into the OECD in 1996 Remarkable recovery from 1997 economic crisis 10 th largest economy in the world today #1 in IT related manufacturing and broadband access

Korea-US Bilateral Trade and Investment $43 billion Korean exports to US in 2004 $29 billion US exports to Korea $13 billion in foreign direct investment (FDI) in Korea $5 billion in FDI in Korea by US

Korea’s technological achievements World leader in sophisticated digital technology Strong information technology (IT) and telecommunications sectors One of the highest broadband Internet connectivity rates in the world at over 70%

Creative industries thriving Creative industries showing great strength One of top film-making nations of the world and winning awards from international film festivals Korean pop and rock music artists have gained popularity in Japan, China and throughout South East Asia

Challenges ahead for Korea Facing a more competitive global environment Competition from lower-wage countries in East Asia Competition from developed OECD countries on the higher end

Korea’s investment strategy Education Information Infrastructure Research & Development *Investments in these three areas are among the highest in OECD economies

Return on Investment Not getting full benefits due to problems in the economic system, including the following: Insufficient competition, flexibility, and diversity Need for more diversified investments Inadequate conditions for creation and exploitation of knowledge and information

Focus on knowledge A strong Intellectual Property Rights system improves conditions for using knowledge and information

What is intellectual property? Industrial Property Patents for inventions Trademarks Industrial designs Geographical indications Computer Programs Copyrights Literary works Films Musical works Artistic works Architectural designs Performances Recordings Broadcasts

Exclusive Right Legal entitlement Right to exercise control Entitlement equivalent to tangible property

Patents Exclusive right granted for an invention, which is a product or a process that provides a new way of doing something. Patents provide incentives to individuals by offering them recognition for their creativity and material reward for their marketable inventions.

Trademarks A distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise. A trademark provides protection to the owner by ensuring the exclusive right to use it to identify goods or services, or to authorize another to use it in return for payment.

Industrial Designs Ornamental or aesthetic aspect of a product Protecting an industrial design assures the owner an exclusive right against unauthorized copying or imitation of the design

Copyrights A legal term describing rights given to creators for their literary and artistic works. Copyrights are essential to human creativity, by giving creators incentives in the form of recognition and fair economic rewards. Copyrights help increase access to and enhance the enjoyment of culture, knowledge, and entertainment

Why protect intellectual property? Better world with new creations in technology and culture Encourages more investments resulting in innovations Spurs economic growth, creates jobs and industries, and enhances the quality of life

IPR and Economic Development IPR protection stimulates growth by encouraging innovations and inventions; expectation of payments results in entrepreneurship Strong IPR systems positively influence a nation’s ability to engage in international transactions

International IPR framework Trade-Related Aspects of Intellectual Property Rights (TRIPS): Sets minimum standards for effective IP enforcement procedures World Intellectual Property Organization (WIPO): WIPO Copyright Treaty WIPO Performers and Phonograms Treaty

Korea’s IPR framework Industrial Property Rights Patent Act, Utility Model Act, Design Act, Trademark Act, Semiconductor Act, Unfair Competition Act Other Copyright Act Computer Program Protection Act Sound Records, Video Products and Game Software Act

Korea’s IPR implementation and enforcement Korean Intellectual Property Office (KIPO) Ministry of Culture and Tourism Ministry of Information and Communication Each of these ministries and agencies has enforcement teams and work closely with the Prosecutor’s Office to enforce IPR laws

US IPR framework Library of Congress, Copyright Office Department of Commerce, Patent and Trademark Office Department of Justice takes lead in enforcement

Bilateral IPR Relations Science and technology agreements Bilateral investment treaties Free trade agreements (FTA) Listing of countries of concern (Special 301 reviews) IP exchanges and technical assistance

Challenges with copyrights Evolving with changing technology Current copyright law in Korea under review (last updated in 1987) Books, games, videos, CDs, DVDs, and computer programs Sound recordings

Conclusion Close link between economic development and a strong IPR system Korea evolving into a creative center in industry, software, music, and film Bilateral and international cooperation on IPR is critical Strong protection for IPR makes good business sense

Questions? IPR Economic Development Piracy Other IPR Issues Economic Issues Diplomacy