2. Korean Intellectual Property Office 0 December 13, 2007 Young-Min KIM Deputy Director Korean Intellectual Property Office (KIPO) Improving IP recognition in Enterprises - Focus on IP and Economy -

3. Korean Intellectual Property Office 1 Contents  Where Are We?  Role of IP on Economic Growth  Current Status of the Republic of Korea  Policies on Commercialization  The Transfer of Technology  Conclusion

4. Korean Intellectual Property Office 2 Where Are We?  Twenty-first century: knowledge–based society  Twenty-first century: knowledge–based society  Endless competition; change in the competition paradigm  Endless competition; change in the competition paradigm  Source of competitiveness  Source of competitiveness  creative knowledge and information  creative knowledge and information  Role of IP on economic development  C the national innovation system  Catalyst for the development of indigenous technology and for building the national innovation system   Correlation between IP protection and national competitiveness (IMD report)

5. Korean Intellectual Property Office 3  Patent applications in Korea: parallel rise in applications and economic growth since the 1970s  Patent applications in Korea: parallel rise in applications and economic growth since the 1970s  GNI per capita: (1960s) below $100 → (2006) $18,372 (29 th in the world)  GNI per capita: (1960s) below $100 → (2006) $18,372 (29 th in the world) Patent applications in Korea, 1947-2004 Role of Role of IP on Economic Growth

6. Korean Intellectual Property Office 4  The progress of the IP system following the  The progress of the IP system following the industrial development of Korea industrial development of Korea  Introduction of the IP system (1945 to the mid-1960s)  Introduction of the IP system (1945 to the mid-1960s) - Most applications were filed by Korean residents. - Most applications were filed by Korean residents.  Enhancement of IPR protection in line with international  Enhancement of IPR protection in line with international standards (from the mid-1980s) standards (from the mid-1980s) - Most applications were filed by foreigners. - Most applications were filed by foreigners.  Stronger IPR protection (after the mid-1980s)  Stronger IPR protection (after the mid-1980s) - Korean residents filed more applications than foreigners because of the active R&D of Korean enterprises. - Korean residents filed more applications than foreigners because of the active R&D of Korean enterprises.

7. Korean Intellectual Property Office 5 Level of technologyIP systemApplicants 1. Early period of industrialization (1945 to mid-1960s) - Focus on domestic situation 1947 to 1966 - Most applicants were Korean residents Residents (89.5%) > foreigners (10.5%) - Annual growth rate of patent applications: 8.2% 2. Promotion of heavy & chemical industries (early 1970s to mid- 1980s) - Compliance with global standards - Accession to international conventions 1967 to 1986 -Most applicants were foreigners Residents (33.2%) < foreigners (66.8%) -Annual growth rate of patent applications: 13.2% 3. Development of new technologies (after mid-1980s) -Reinforcement of IPR protection 1987 to 2004 - Korean residents actively used the system Residents (67.9%) > foreigners (32.1%) -Annual growth rate of patent applications: 14.2%  Changes in the IP system and the type of applicants  Changes in the IP system and the type of applicants

8. Korean Intellectual Property Office 6  Analysis of the relation between IP and technological  Analysis of the relation between IP and technological progress progress  Ten manufacturing industries, including the electronics, petrochemical industries.  Ten manufacturing industries, including the electronics, petrochemical industries.  IPR protection boosts technological innovation  IPR protection boosts technological innovation  Stricter IPR enforcement leads to a swifter industrial response against infringements.  Stricter IPR enforcement leads to a swifter industrial response against infringements.  Korean companies realize that IPRs are a major tool for protecting technical innovation.  Korean companies realize that IPRs are a major tool for protecting technical innovation. □ Empirical studies on IP and technological innovation □ Empirical studies on IP and technological innovation in the Korean economy (STEPI) in the Korean economy (STEPI)

9. Korean Intellectual Property Office 7 □ The tangible impact of IPR protection Greater IPR protection had a huge impact on pharmaceutical products (1987). Pharmaceutical companies boosted R&D investment and laid the foundation for more research institutes. SectionContent R&D expenses against annual sales in the top 100 pharmaceutical companies 2.9% (1988) → 4.1% (1995) No. of pharmaceutical research institutes 31 (1985) → 96 (1996)

10. Korean Intellectual Property Office 8  Sharp increase in pharmaceutical IP  Sharp increase in pharmaceutical IP applications (since the strengthening of IPR protection in the mid-80s) PeriodPortion of applications 1987 to 1990 (the initial period)5.6% 1991 to 200020.0% 2003 to Aug. 200533.4% The portion of domestic applications among the total applications

11. Korean Intellectual Property Office 9  The impact of technological innovation on economic  The impact of technological innovation on economic growth is continually growing. growth is continually growing. □ The relation between technological innovation and economic growth Analysis of growth factors in the economic growth of Korea Growth Factors 1963 to 19791979 to 1995 Economic growth rate Rate of contribution Economic growth rate Rate of contribution Increase of production factors Labor Capital 4.2 3.2 1.0 57 43 14 4.0 2.2 1.8 50 28 22 Increase of productivity Level of education Technical progress Progress in resource distribution Scale economics 3.2 0.2 1.2 0.5 1.3 43 3 16 7 17 4.0 0.4 1.7 0.4 1.5 50 5 21 5 19 Total7.41008.0100

12. Korean Intellectual Property Office 10  Increase in IP applications → improvement in technical progress and the total factor productivity → increase of GNP and economic growth.  A 1% increase in IP applications in Korea → a 0.11% increase in the economic growth rate.  The growth rate of IP applications is closely related to long-term economic growth. □ Study of the relation between IP and economic growth (Korea Development Institute, 2003)

13. Korean Intellectual Property Office 11  Fourth in IPR applications, 5 th in PCT applications, 4 th in ISA  Number of IPR applications (2006): 368,000  Number of IPR applications (2006): 368,000  Number of PCT applications (2006): 5,935  Number of PCT applications (2006): 5,935  Number of PCT applications as an ISA (2006): 6,645  Number of PCT applications as an ISA (2006): 6,645 Current Status of the Republic of Korea  Commercialization ratio  (2001) 37.3% → (2002) 26.6%→ (2004) 38.9% → (2005) 33.2%  (2001) 37.3% → (2002) 26.6%→ (2004) 38.9% → (2005) 33.2%  Bottleneck: lack of funds (46.3%), shortage of marketing  Bottleneck: lack of funds (46.3%), shortage of marketing ability (17.3%), illegal copying (8.1%) ability (17.3%), illegal copying (8.1%)

14. Korean Intellectual Property Office 12 Efficiency of R&D Size of R&D budget R&D/GDP Japan 3.12%  2.64%  USA 2.59%  Germany 2.51%  France 2.26% Rate of TT Canada 41.6%  USA 28.3%  20.3% National R&D spending 8 th ($16 billion, 2005) Category Status Contribution of R&D to economic growth USA 40.2%  10.9%  Relatively low efficiency of R&D spending  Size of R&D budget is similar to those of developed counties ★ Strategic use of IP is necessary for economic development

15. Korean Intellectual Property Office 13 For the patentee who is incapable of independent commercialization: –Facilitation of the transfer of patented technology E.g. University and research institutes For the patentee who wants to independently commercialize an invention: –Provision of financial aid –Support of expanding market places: exhibitions, cyber shopping malls For fair and transparent support: –Establishment of an objective appraisal system Provide customized support programs based on patentees’ commercialization capability and intent Direction Policies on Commercialization

16. Korean Intellectual Property Office 14 18 organizations (8 governmental authorities & 10 related agencies) KIPO Rural Development Admin. Forest Service Technology Credit Guarantee Fund Inst. of Industrial Tech Evaluation Inst. of Science & Technology Small Business Corporation KIPA Commercialization Council Korea Technology Transfer Center Agency for Tech & Standards Univ. of Science & Technology Korea Inst. of Design Promotion SM Business Admin. Korea Development Bank Maritime & Fisheries Industry & Energy Agriculture & Forestry  Organization of the Commercialization Council Science & Tech.

17. Korean Intellectual Property Office 15 Collateral Support Financial Support Consultations Notifications 명세서 기재 Council - Funds for R&D and acquisition of IP - Funds for IP valuation and transactions - Funds for launching new products - Funds for establishing enterprises - Funds for facilities and mass production - Provision of IP information - Discounted application fees - Nurturing of IP experts - Authentication and guaranteeing of new technologies - Evaluation and marketing of new technologies - Guidance on managerial or technical problems - Advertising and marketing of new products -Consultations on general aspects of commercialization - Notification of the council’s support programs - www.kipa.org  Main services of the Commercialization Council

18. Korean Intellectual Property Office 16 Commercialization Council (Working Group) Commercialization Council (Working Group) 특허기술활용희망자 ( 신청인 ) 특허기술활용희망자 ( 신청인 ) Support Organizations (Financial Aid) Support Organizations (Financial Aid) 관리기관 ( 한국발명진흥회 ) 관리기관 ( 한국발명진흥회 ) Monitoring Support status Application Support & management Supervision of collateral support Entrustment of management Satisfaction survey Reporting of performance   Operation of the Commercialization Council Management Authority (KIPA) Management Authority (KIPA) 특허기술활용희망자 ( 신청인 ) 특허기술활용희망자 ( 신청인 ) Applicant for Commercialization Applicant for Commercialization

19. Korean Intellectual Property Office 17  Manufacturing and testing of prototypes before  Manufacturing and testing of prototypes before commercialization commercialization  Limit of assistance  Limit of assistance  70-90% of actual cost (depending on the technology)  70-90% of actual cost (depending on the technology)  Maximum subsidy of US$50,000  Maximum subsidy of US$50,000  Annual budget increase  Annual budget increase   Cases of assistance: (2002) 35→ (2003) 40→ (2004) 55→ (2005) 79 → (2006) 165  Assistance in the manufacture of prototypes

20. Korean Intellectual Property Office 18  Support for IP valuation  Objective appraisal of the market value as a back up for IP transactions or commercialization  Objective appraisal of the market value as a back up for IP transactions or commercialization  Valuation of the technology and estimation of  Valuation of the technology and estimation of profitability profitability  Subsides for individuals or SMEs for up to 90% of the valuation cost (or a maximum of US$30,000)  Subsides for individuals or SMEs for up to 90% of the valuation cost (or a maximum of US$30,000)  Designation of 9 institutes as patent appraisal institutes.  Designation of 9 institutes as patent appraisal institutes.

21. Korean Intellectual Property Office 19  Operation of patented technology markets The Transfer of Technology  Internet Patent Mart (IP-Mart)  Launched in April 2000 (www.ipmart.or.kr)  Launched in April 2000 (www.ipmart.or.kr)www.ipmart.or.kr   Managed by KIPA   Provides detailed info about technology  Runs a technology database of around 69,000 items  Runs a technology database of around 69,000 items (2006) (2006)   Auctions patented technology (since Jan. 07)  Changes the displayed technology every 3 months  Changes the displayed technology every 3 months

22. Korean Intellectual Property Office 20  Transaction of state-owned patents   Patents invented by government employees while performing their duties   Successful transfer of 134 nonexclusive licenses (2006)  IP Market  Opened November 2000  Opened November 2000   Managed by KIPA  Offers support for DVD simulation and appraisal of technology  Offers support for DVD simulation and appraisal of technology  Success in 34 cases (2006)  Success in 34 cases (2006)

23. Korean Intellectual Property Office 21  Technology Transfer Fair  Opportunity for buying and selling technology   List high-demand technologies from buyers (123 technologies, first half of 2007)   List new technologies of sellers (558 cases, first half of 2007)   Match buyers and sellers   On-the-spot assistance from experts on technology transactions   Consultation and mediation for buyers and sellers   Seminars on techniques of technology transactions   Education on the IP system

24. Korean Intellectual Property Office 22  SMEs IP Management T/F (2006.9. established)  Providing consulting on IP management of SMEs   Importance of IP   Consideration of IP in R&D   Commercialization   IP Dispute   Composition of Expert Pool   All 71 Patent, Brand & Design Examiners as Consultants   Procedure   Apply, Selection, Diagnosis, Consulting, After-Management   Outcomes : 34 industries in 2006, 56 industries in 2007

25. Korean Intellectual Property Office 23 Conclusion We aim to strengthen links between our financial support for commercialization and other programs. We aim to cultivate new markets for excellent patented products. We aim to promote technology transfer through establishing a foundation for patented technology appraisals. We aim to build a user-friendly technology transfer system.

26. Korean Intellectual Property Office 24 Thank You ymk738@kipo.go.kr