1 IP Regime and its Effect on Knowledge-Economy : South Korean IP Perspective October 2013

2 Table of Contents Introduction about the Firm I. Korea’s Present Status in IP world A. IP Expansion following by GDP B. Position in IP5 II. Korean’s Future : Paradigm shift for IP trade Balance A. Still suffer from Big IP trade deficit B. Reasons for the deficit C. Korean government and companies now focus on new paradigm - New way to create IP - New way to protect IP - New way to monetizing IP Executive Summary Q & A

Introduction H.C. Park & Associates, PLC (HCPA) is headquartered in Reston, Virginia, USA HCPA was established by myself in 2005, as a full-service intellectual property firm uniquely positioned to serve its domestic and international clients in today’s global IP community. HCPA has 45 patent professionals residing at USA,Korea and Pakistan. 3

Major Clients (95% Korean Company) are In Prosecution, 600 new Applications, 3500 filing in In Litigation, HCPA has over 20 pending patent litigations before US Federal Courts and International Trade Commission (ITC) 4 Introduction

5 Table of Contents Introduction about the Firm I. Korea’s Present Status in IP world A. IP Expansion following by GDP B. Position in IP5 II. Korean’s Future : Paradigm shift for IP trade Balance A. Still suffer from Big IP trade deficit B. Reasons for the deficit C. Korean government and companies now focus on new paradigm - New way to create IP - New way to protect IP - New way to monetizing IP Executive Summary Q & A

Korea’s GDP has increased 70% for last 14 years (1  1.7 point) In same period, number of IP has increased over 100 % Patent 1  2.3 point Trademark 1  2.1 point Design 1  2.6 point IP Expansion following by GDP  IP Expansion has been proportional to GDP in case of Korea 6

IP Expansion following by GDP  IP Expansion has been achieved in Korea’s major industry _ Semiconductor, Audio-visual tech(TV), Computer, Telecommunication. Field of TechnologyShare (%) Semiconductors10.05 Audio-visual technology9.19 Computer technology7.56 Telecommunications7.31 Electrical machinery, apparatus, energy7.29 Optics5.39 Transport4.61 Digital communication3.98 Civil engineering3.52 Other consumer goods3.23 Others

Position in IP 5 What is IP 5 The Five IP Offices (IP5) is the name given to a forum of the five largest intellectual property offices in the world that is being set up to improve the efficiency of the examination process for patents worldwide. the European Patent Office (EPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), the State Intellectual Property Office of the People's Republic of China (SIPO), and the United States Patent and Trademark Office (USPTO). The IP5 Offices account for 90% (accumulate) of all patent applications filed worldwide and for 93% (accumulate) of all work carried out under the Patent Cooperation Treaty (PCT). 8

Position in IP 5 Number of IP5’s patent application has occupied around 80% in every year. In 2011, # of whole patent application = 2,139,900 # of IP5’s Patent application =1,694,321 The ratio is 79.2 % 9

Position in IP 5 Korea has filed patents around 170, 000 per year, which is ranked in 4 th among IP5. In 2011, 1. SIPO 526, USPTO 503, JPO 342, KIPO 178, EPO 142,800 10

Position in IP 5 Korea has additional around 100,000 issued patents in every year, which is ranked in 4 th among IP5. In 2011, 1. JPO 238, USPTO 224, SIPO 172, KIPO 94, EPO 62,100 11

Position in IP 5 However, Korea is ranked first in number of patent application per $ 1 B GDP. In 2011, 1. KIPO JPO SIPO USPTO 33.5  This means Korea has invested lots of efforts in Patent in view of GDP 12

Position in IP 5 Korea is also ranked first in number of patent application per $ 1 M R&D investment. In 2011, 1. KIPO SIPO JPO USPTO 0.9  This means Korea has invested lots of efforts in Patent when they do research and development. 13

Position in IP 5 As an example, Samsung has ranked first in number of patent filing in China since

Position in IP 5 As an example, Samsung and Apple are now fighting with design patents in world wide. Samsung has design patents 3 times more than Apple in USA. 15

16 Part Summary IP Expansion has been proportional to GDP in case of Korea. IP Expansion has been achieved in Korea’s major industry _ Semiconductor, Audio-visual tech(TV), Computer, Telecommunication. Korea has invested lots of efforts in Patent in view of GDP and R&D budget. Based on the efforts, Korea becomes IP5 and several Korean companies such as Samsung and LG become world IP leaders.

17 Table of Contents Introduction about the Firm I. Korea’s Present Status in IP world A. IP Expansion following by GDP B. Position in IP5 II. Korean’s Future : Paradigm shift for IP trade Balance A. Still suffer from Big IP trade deficit B. Reasons for the deficit C. Korean government and companies now focus on new paradigm - New way to create IP - New way to protect IP - New way to monetizing IP Executive Summary Q & A

Still suffer from Big IP trade deficit During last decade, Korea has still $ 2~5 B deficit in IP trade balance, although IP volume of Korea has ranked 4 th in world wide. 5 Countries has surplus/deficit IP trade balance Amount of deficit in IP trade balance _ Korea Korea 18

Reasons for the Deficit Heavy dependency on Export In First half of 2013, - Korea has 42 B $ surplus in trade balance. - Specially, Samsung, LG and Pantech’s mobile phone export has been increased up to B $. - Total IT export to USA is 8.22 B $. Major export products are major subject for patent enforcement and licensing - During 2006~2012, Korea mobile phone manufactures paid NPEs 1.5 B $ (Source : Joongang News ) (Source : Korea Ministry of Science, ICT and Future Planning) 19

Reasons for the Deficit As an example, NPEs do like Korean Companies because of big revenue in USA. Top 10 companies who have litigations with NPEs 2. Samsung 3. LG 20

Reasons for the Deficit As an example, one of NPEs (Interdigital) has around 50 % revenue from Korea during 2010~

22 Korean needs new paradigm for reducing the deficit and turn it to Surplus

New Paradigm – New way to create IP 23

New Paradigm – New way to protect IP 24

New Paradigm – New way to monetizing IP 25

26 Table of Contents Introduction about the Firm I. Korea’s Present Status in IP world A. IP Expansion following by GDP B. Position in IP5 II. Korean’s Future : Paradigm shift for IP trade Balance A. Still suffer from Big IP trade deficit B. Reasons for the deficit C. Korean government and companies now focus on new paradigm - New way to create IP - New way to protect IP - New way to monetizing IP Executive Summary Q & A

27 Executive Summary KR has achieved lots of success in volume of IP and position in IP world (e.g. IP 5),which has been driven by several Big companies and government. but still have a heavy deficit in IP trade balance caused by heavy dependency on export and dependency on several major products which are subject of IP enforcement and licensing. Now, Korean government and companies focus on IP economy with new ways_ IP Mining, IP Incubation, IP Pool, IP R&D, IP capital. Pakistan needs to focus on IP volume expansion first and then move to IP Economy by enhancing IP Mining, IP Incubation, IP Pool, IP R&D, IP capital.

28 Thank you

29 Q & A