1. “International Patent Law Harmonization and Development” DAESHIK JEH Director Patent Examination Policy Team Korean Intellectual Property Office 1 March, 2006 The Experience of Korea Korean Intellectual Property Office

2. Open Forum 9 2 Table of Contents Economic Growth Ⅰ. Ⅰ. KIPO‘s Efforts for Harmonization Ⅱ. Ⅱ. Patent Statistics Ⅲ. Ⅲ. Effect of IP on Economic Growth Ⅳ.Ⅳ. Vision of KIPO Ⅴ. Ⅴ.

3. Open Forum 9 3 Ⅰ. Economic Growth (1) Seoul in 2005 Seoul in 1961

4. Open Forum 9 4 Ⅰ. Economic Growth (2)  14.5% annual growth rate of GDP between 1961 ($2.3 billion) and 2005 ($768 billion) Year Category 1961 (a)2005 (b)b/a (Times) GDP$ 2.3 B$ 768 B334 GDP P/C$ 87$ 16,000184 EXPORT$ 55 M$ 284.4 B5,170 IMPORT$ 390 M$ 261.2 B670 Unit : B (billion), M (million)

5. Open Forum 9 5 Ⅰ. Economic Growth (3)  Amazing growth of economy (1986-1996) - 18.5% annual growth rate of GDP Per Capita from 2,643 (’86) to 12,197(’96)  Overcame the financial crisis (1997~2005) - Developing a new growth engine in the fields of IT, BT and NT

6. Open Forum 9 6 Before Industrialization (1945-1961) Ruined and divided country owing to the three- year Korean War (1950-1953) No national consensus for developing industries No money for building factories One of the poorest countries in the world Ⅰ. Economic Growth (4)

7. Open Forum 9 7 Ⅰ. Economic Growth (5) Early Industrialization (1962-1981) Government drove the industrial policy (The Economic Development Plan) Factories were built by foreign loans Companies depended heavily on imported technologies Focused on the light industries, such as fabric, plywood and footwear industries, etc.

8. Open Forum 9 8 Ⅰ. Economic Growth (6) Growing Industrialization (1982-1996) Private sectors led the development and government supported companies Grew as a developing country Companies turned to the heavy and chemical industries, such as steel, shipbuilding and automobile industries

9. Open Forum 9 9 Ⅰ. Economic Growth (7) Maturing industrialization (1996-2005) Overcame the financial crisis in three years by financial support from the IMF Many failing companies fell under control of foreign capital during liquidation Turned to technology-intensive industries such as mobile phone, semiconductor and display industries Tried to shift from a developing country to an advanced country

10. Open Forum 9 10 Ⅱ. KIPO’s Efforts for Harmonization (1) Progress of the IP System (1) Enhancing the IPR system in accordance with the international standard (1980s) Introducing the modern IP system (1961) -Patent, Utility Model, Design, and Trademark -Introduced claiming priority of Paris Convention (1973) - Joined the WIPO (1979) - Joined the Paris Convention (1980) - Joined the PCT (1984) - Expanded the scope of patentable subject matter (included substance patent (1986) and food patent (1990))

11. Open Forum 9 11 Ⅱ. KIPO’s Efforts for Harmonization (2) Progress of the IP System(2) Strengthening the IPR protection (1990s) - Joined the WTO/TRIPs (1995) - Extend the term of protection to 20 years counted from the filing date (1995) - Extended the scope of patent licensing to “subscription to an assignment or leasing” of a patent right (1995) - Established the Patent Court (1998) - Regard technologies published on the Internet as the prior art (2001)

12. Open Forum 9 12 Ⅱ. KIPO’s Efforts for Harmonization (3) Amendment for Harmonization(1) Reflecting the Paris convention and PCT - Introduced claiming priority of Paris Convention (1973) - Extended the time limit for submission of a translation of a PCT application to 31 months (2005) - Introducing a system for restoring patent protection within a certain period of time if protection has lapsed by reason of failure to pay annual fees (2005)

13. Open Forum 9 13 Reflecting the SPLT draft Ⅱ. KIPO’s Efforts for Harmonization (3) Amendment for Harmonization(2) - To include any kind of information available to the public, in Korea or other countries, in the prior art (2005) - Not to restrict the type of publication of a prior art item insofar as the prior art item does not affect the patentability of a claimed invention (2005)

14. Open Forum 9 14 Ⅱ. KIPO’s Efforts for Harmonization (4) Amendment for Harmonization(3) Reflecting the WTO/TRIPs - Included substance patents as subject matter (1986) - Extend the term of protection to 20 years counted from the filing date (1995) - To grant a non-exclusive license to export medical products to countries that try to import the medicinal products to treat diseases threatening their public health (2005)

15. Open Forum 9 15 Ⅲ. Patent Statistics (1)  Increase in patent & utility model applications - 193,364 patent & utility model applications were filed with KIPO in 2005. - The number of patent applications in 2005 (121,467) increased 105 times, compared to that in 1970 (1,846).

16. Open Forum 9 16 Ⅲ. Patent Statistics (2)  Number of patent registrations in KIPO - The number of annual patent registrations increased 41 times: 1,808 (1981) → 73,509 (2005) - The ratio of the annual patent registrations by residents to those by foreigners increased from 12.8% (1981) to 72.7% (2005).

17. Open Forum 9 17 Ⅳ. Effect of IP on Economic Growth (1)  The number of patent/utility model applications has increased along with economic growth since 1970s.

18. Open Forum 9 18 Ⅳ. Effect of IP on Economic Growth (2) Case study of Korea Increase in patent applications → Technological development → Increase in GDP (Source: “Report of Korea Development Institute 2003”) Increase in patent applications by 1% → Increase in economic growth rate by 0.11% The growth rate of patent applications is closely related to the long-term economic growth rate

19. Open Forum 9 19 Ⅳ. Effect of IP on Economic Growth (3)  Effect of IP on Korean economy - Negative effect: Still paying a large amount of royalties  Spent $ 4.1 billion in 2004 - Positive effect: Increase in the ratio of technology export to technology import: 8.7% (’94) → 34.2% (’04)

20. Open Forum 9 20 Ⅳ. Effect of IP on Economic Growth (4) Produced pharmaceutical products and chemical compounds without licensing substance patents before 1987 pharmaceutical and chemical companies made efforts to protect substance patents Domestic companies were strongly opposed to protection of substance patents. Investment in R&D increased. Many research institutes were founded. New medicines made from new substances were licensed. Before protect substance patents After protect substance patents

21. Open Forum 9 21  Effects of substance patents on the pharmaceutical industry after starting to protect substance patents in 1987 EffectsContents The ratio of R&D to sales in the pharmaceutical fields 0.7% (’86) → 5.75% (’99) The Number of research institutes in the pharmaceutical fields 31 (’85) → 216 (’04) The number of new medicines 11 items licensed 92 items under development Technology export exceeded technology import at 2000 Export ($23.5 M) Import ($18.7 M) Ⅳ. Effect of IP on Economic Growth (5)

22. Open Forum 9 22 Ⅳ. Effect of IP on Economic Growth (6)  The number of applications by residents increased 26 times [35 applications (1987) → 906 (2005)]  The ratio of applications by residents increased [ 4.2% (1987) → 35.3% (2005)].

23. Open Forum 9 23 Ⅴ. Vision of KIPO (1) Main Targets of KIPO 1. To lead technology innovation through rapid, high- quality examinations and trial decisions 2. To promote efficient R&D projects by encouraging the active use of patent information nationwide 3. To promote awareness of the importance of IP and to consistently protect IP To support nationwide IP development by establishing the IP infrastructure 4.

24. Open Forum 9 24 Ⅴ. Vision of KIPO (2) Main Activities of KIPO (1) 1. Reducing the examination period from 17 months in 2005 to 10 months by the end of 2006 2. Reducing the patent trial period from 12 months in 2005 to 6 months by the end of 2006 3. Improving the employee-invention system - Recruiting new examiners (280 examiners in 2005 and 2006) 4. Enforcing the law against illegal activities of manufacturing and selling counterfeit products - Amending the law to promote mutual interests between employers and employees

25. Open Forum 9 25 Ⅴ. Vision of KIPO (3) Main Activities of KIPO (2) 1. Promoting use of patent information by public sectors in governmental R&D projects 2. Improving the KIPOnet system - Providing year-round filing service 3. Executing the joint prior-art search program with Japan, China and Australia 4. Designated as an ISA/IPEA by PH, VN, ID, IN, Mongolia, Singapore, NZ and the US

26. Open Forum 9 26 Ⅴ. Vision of KIPO (4) 1. Korea needs to strategically use IP as a tool for sustainable economic development 2. KIPO consistently protects intellectual property KIPO fully supports technology innovation 4. 3. KIPO strongly supports the harmonization of international patent law Conclusion

27. Open Forum 9 27 DAESHIK JEH kipo2006@kipo.go.kr Phone: +82-42-481-5389, Fax: +82-42-472-3470 Thank you for your attention!