AHN Jae-Hyun Senior Director Industrial Property Policy Division Korean National Experience on Building Intellectual Property Awareness and Capacity of Small and Medium-sized Enterprises March 18, 2008 AHN Jae-Hyun Senior Director Industrial Property Policy Division Korean Intellectual Property Office

Contents I. The Importance of IP in the Knowledge-Based Society II. The Current Status of Korea in the IP Field III. Polices for Building Intellectual Property Awareness and Capacity of Small and Medium-sized Enterprises IV. Conclusion

The Past and the Present of Korea 1957 2007 GDP Per Capita : $ 74 Export : $ 22 million Lack of provisions, food Lack of electricity Patent filings : 469 GDP Per Capita : $ 20,000 Export : $ 371,489 million Techno-intensive Industry - IT products, mobile phone, semiconductor, car etc. Ship-building : No.1 Patent filings : 171,731

I. The Importance of IP in the knowledge-Based Society Rapid Change from Industrial Society to the Knowledge-Based Society The development and securing of new innovative technologies, including IT, BT, and NT, are sources of creating national wealth,      not just means of acquiring wealth. * Price per 1g: gold $ 35, interferon (anticancer drug) $ 5,000 EPO (medication for anemia) $ 670,000 Traditional industry should be converted into high value-added industry in order to survive and succeed in the global market.

I. The Importance of IP in the knowledge-Based Society Knowledge and Technology Can Be Sources of Wealth and Competition Creating Enormous Property Value and High Added Value through Patents and Trademarks Knowledge and ideas have become sources of wealth and strong competitiveness through monopolistic and exclusive rights granted by intellectual property rights. * An enormous amount of royalty and sales revenue has been acquired from establishing licenses or transferring rights. * In the U.S., one of the strong powers on intellectual property, more than 50% of its export     has direct relation to intellectual property rights

I. The Importance of IP in the knowledge-Based Society Promoting Continuous Technological Innovation Building an Infrastructure of Intellectual Property for Improving the National Competitiveness Without an IPR protection system, entrepreneurs would avoid investing in technological innovation and the R&D, which requires a long-term investment of a large amount of capital, resulting in loss of creativity. Inducing Foreign Direct Investment and Technology Transfer Foreign enterprises that possess advanced technologies can be induced to make a direct investment and transfer their technologies in a country where IPRs are properly protected

Financing I. The Importance of IP in the knowledge-Based Society Virtuous Cycle of Intellectual Property Commercialization Speedy & Correct examination & Transfer of patents Financing Acquisition of IP Rights Creation of IP Exploitation & Protection of IPR

Ⅱ. The Current Status of Korea in the IP Field Top 20 Offices of Patent Filings in 2005

Ⅱ. The Current Status of Korea in the IP Field Patent Filings by Residents in 2005

Ⅱ. The Current Status of Korea in the IP Field Resident Patent Filings per Million Population in 2005 ( Korea : 2,530 Ranking 2 )

Ⅱ. The Current Status of Korea in the IP Field Resident Patent Filings per Billion dollars GDP (Korea : 129 Ranking 1)

Ⅱ. The Current Status of Korea in the IP Field Resident Patent Filings per R&D Expenditures ( Korea : 5.08 Ranking 1)

Ⅱ. The Current Status of Korea in the IP Field Patents Granted by Office in 2005 (Korea Ranking 3)

Ⅱ. The Current Status of Korea in the IP Field Patents Granted by Country of Origin in 2005

Ⅱ. The Current Status of Korea in the IP Field

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises 2. Consultation, Education and Training 3. Supports for Creating Intellectual Property 4. Supports for Exploiting Intellectual Property 5. Supports for Protecting Intellectual Property

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises 2. Consultation, Education and Training 3. Supports for Creating Intellectual Property 4. Supports for Exploiting Intellectual Property 5. Supports for Protecting Intellectual Property

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises SMEs account for 99.8% of companies in Korea, and employ 10 million workers, which are 88.6% of corporate employees SMEs have only 60-70% of technical competitiveness of Korean conglomerates and 40-50%of technical competitiveness of companies in advanced countries.

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises 2. Consultation, Education and Training 3. Supports for Creating Intellectual Property 4. Supports for Exploiting Intellectual Property 5. Supports for Protecting Intellectual Property

III. Polices for Building IP Awareness and Capacity of SMEs 2. Consultation, Education and Training Comprehensive Consultation for Local SMEs Set up 29 local IP Centers nationwide, which provide local SMEs with IP consultations, patent information services and educational programs KIPO cooperates with 13 metropolitan local governments aimed at enhancing IP awareness of local SMEs - Conducts projects for improving and protecting the value of local brands by registering them as collective marks - Provides the local governments with consultations on local brand strategies

Nurturing “Star Companies” III. Polices for Building IP Awareness and Capacity of SMEs 2. Consultation, Education and Training Nurturing “Star Companies” Select several SMEs in each metropolitan local area (province), which have made inventions of good quality Provide them with comprehensive supports including patent information services, consultations and supports for patent filing Nurture them into “Star Companies” that can lead the local industry

Customized IP Consultations III. Polices for Building IP Awareness and Capacity of SMEs 2. Consultation, Education and Training Customized IP Consultations KIPO’s examiners visit SMEs on request to provide customized consultations on IP Including diagnosis on IP management and consultations on how to search prior arts, how to make a good patent application (description or drawing and claim) etc.

Public Patent Attorneys Center III. Polices for Building IP Awareness and Capacity of SMEs 2. Consultation, Education and Training Public Patent Attorneys Center KIPO cooperates with the Korean Patent Attorneys Association (KPAA) in running “ the Public Patent Attorneys Center” It provides free consultations on IP to individual inventors and small enterprises

IP Education and Training III. Polices for Building IP Awareness and Capacity of SMEs 2. Consultation, Education and Training IP Education and Training KIPO set up an IP training center, called the International Intellectual Property Training Institute (IIPTI) in 1987 Providing systematic education for not only KIPO’s employees but also people from private sector including SMEs IIPTI is running several IP training courses for foreigners

Customized Cyber Education III. Polices for Building IP Awareness and Capacity of SMEs 2. Consultation, Education and Training Customized Cyber Education KIPO is running “Cyber IP Academy” to provide SMEs with customized training courses and contents on IP free of charge Contributing to building capacity on IP SMEs

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises 2. Consultation, Education and Training 3. Supports for Creating Intellectual Property 4. Supports for Exploiting Intellectual Property 5. Supports for Protecting Intellectual Property

Small companies : 70% exemption Medium-sized companies : 50% exemption III. Polices for Building IP Awareness and Capacity of SMEs 3. Supports for Creating Intellectual Property Patent Fee Exemption KIPO provides SMEs with 50~70% of patent fee exemption to facilitate more patenting activities with less burden Small companies : 70% exemption Medium-sized companies : 50% exemption Disabled inventors : 100%

Expand the ‘Reward System for Employee Inventions’ III. Polices for Building IP Awareness and Capacity of SMEs 3. Supports for Creating Intellectual Property Expand the ‘Reward System for Employee Inventions’ Most inventions are created by companies and research institutes by employees 83.7% of patent applications in 2006 were filed by legal entities employee inventions. To expand infrastructure for creating IP, it is essential to fairly reward employees for their inventive activities

Supports for Filing Patents Overseas III. Polices for Building IP Awareness and Capacity of SMEs 3. Supports for Creating Intellectual Property Supports for Filing Patents Overseas Help SMEs file more patent applications overseas Max. four million Korean won per filing Up to three filings per enterprise The invention should meet the good-quality requirements

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises 2. Consultation, Education and Training 3. Supports for Creating Intellectual Property 4. Supports for Exploiting Intellectual Property 5. Supports for Protecting Intellectual Property

Only few patented technologies are commercialized III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Background Inventive activities will contribute to national economy only when the patented technology is eventually used Only few patented technologies are commercialized 37% of patents or utility models have been commercialized (2006) Only 20% of them have achieved commercial success

Raising the commercializing funds and investing or loaning to SMEs III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Set up the “Council for Commercialization of Patented Technologies” in 1999 Currently consists of three governmental bodies KIPO, Ministry of Knowledge Economy and SME Administration It coordinates and implements various ministries’ supporting programs for commercializing patented technologies Raising the commercializing funds and investing or loaning to SMEs

Supports for E-commercing Patented Products of Good Quality III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Supports for E-commercing Patented Products of Good Quality Running an internet shopping mall (www.buyinvention.com) Selling lots of patented products made by SMEs on the cyber mall

The patented goods can have the preference in government procurement III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Recommendation of Patented Products of Good Quality for Government Procurement Recommending the inventions to central governments, local governments and state-running agencies The patented goods can have the preference in government procurement

Awards for Excellent Inventions III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Awards for Excellent Inventions Selecting 50 SMEs that have made excellent inventions twice a year Conferring government awards upon them Providing them with a free booth at an invention exhibition

Supports for Appraising the Value of Patented Technologies III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Supports for Appraising the Value of Patented Technologies Subsidizing evaluation of the value of patented technologies Max. 80% of the evaluation cost, not exeeding 30 million Korean won per enterprise

III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Running An Internet IP Mart for Transferring Patented Technologies (www.ipmart.or.kr) Promoting the transfer of patented technologies by connecting the supplies with the demander Anybody can search a wanted-technology online in the website containing the database of 52,000 patents

Exhibiting and advertizing patented products and technologies III. Polices for Building IP Awareness and Capacity of SMEs 4. Supports for Exploiting Intellectual Property Organizing an Off-line IP Mart for Promoting Sales of Patented Goods and Technologies Exhibiting and advertizing patented products and technologies Professional consultants for technology transfer help to transfer patented technologies

III. Polices for Building IP Awareness and Capacity of SMEs 1. The Importance of Small and Medium-Sized Enterprises 2. Consultation, Education and Training 3. Supports for Creating Intellectual Property 4. Supports for Exploiting Intellectual Property 5. Supports for Protecting Intellectual Property

Free Consultation on IPR Infringement III. Polices for Building IP Awareness and Capacity of SMEs 5. Supports for Protecting Intellectual Property Free Consultation on IPR Infringement KIPO provides SMEs with free-of-charge consultation on IPR infringement in cooperation with the Korea Patent Attorneys Association (KPAA)

III. Polices for Building IP Awareness and Capacity of SMEs 5. Supports for Protecting Intellectual Property KIPO also assists them with a patent map on patent infringement in order for them to enhance the capability to cope with patent infringement overseas

IV. Conclusion I wish Mongol a great success and prosperity In this knowledge-based era, intellectual property is a vital factor for economic and social development. Strong IP policy can attract foreign direct investment from abroad and stimulate inventive activities home, and thereby contribute to development of industry and economy. Close cooperation between the governments, industries, academia is crucial for promoting invention and innovation. Korea was one of the poorest countries in the world in 1950’s. In 50 years, Korea is now on the threshold to an advanced country. Many factors such as foreign investment, successful economic policies etc contributed to Korean success. Successful R&D and IP policy, however, is one of the contributors. I wish Mongol a great success and prosperity

Thank you! AHN Jae-Hyun iprkorea@empal.com Phone: +82-42-481-5168, Fax: +82-42-472-3464