Amid all the talk of rampant Chinese and Indian growth, of the emergence of Brazil as an economic powerhouse – and the financial troubles in Europe, of course – one global economic story seems to have been lost in the noise. But South Korea, with its relatively small population and limited natural resources, is quite the success story.
Consider, for example, its reaction to the global economic crisis after 2008. In June that year, gross domestic product (GDP) growth was a healthy 4.4%. By March 2009 – the trough of the global crisis – its economy was shrinking at an annualised rate of 4.3%. But, by December 2009, it had effected an astounding recovery – with GDP growth back to 6%. That’s a recovery that outshone China, India and Brazil.
A big part of that resilience is down to smart management of intellectual property (IP). Over the past 10 years, Korea’s businesses, law firms and institutions have woken up to the value of IP Rights – particularly within a global economy.
‘Our industrial structure is all geared around exports,’ explains Ho-Hyun Nahm, lead partner at Barun IP & Law, one of the largest IP law firms in the country. ‘We have a population of only around 45 million, which simply isn’t a big enough market for all the products Korea makes. And when you export the kind of sophisticated goods our companies produce, the need to manage IP Rights is paramount.’
A new dynamism
‘That understanding has spread very quickly in our economy,’ he says. Even medium-sized Korean companies have experienced IP-related issues in foreign markets and they’ve learned from those situations. Some of the cases – especially involving our bigger companies – were extremely costly, and that on its own has been enough to motivate businesses to learn how to manage IP more proactively.’
As well as supplying financial assistance, the Korean Government has helped businesses with targeted support to expand into other technological hot-spots. ‘There has been a focus on areas where Korean businesses see an opportunity to be world leaders – such as biotech and energy,’ Nahm explains.
The other factor, he adds, is the character of Koreans: ‘As a people, we’re very quick to react and adapt – when the situation changes, we’re ready to move. That’s why our companies have been so quick to exploit these new technologies, developing and finding new uses for them. But that creates some quite complex IP situations.’
Aligning with global IP law
As a result, the Korean Intellectual Property Office (KIPO) is particularly critical to this fast-changing environment. ‘Ten years ago, there were some complaints that IP laws were perhaps not as well enforced as they might be here – but both the law and its enforcement have now improved a great deal,’ says Nahm.
KIPO has opened offices around the region and has taken steps to align local Korean IP Rights with global standards. It’s also supporting domestic businesses to become more IP-savvy through initiatives like the IP Academy, an online education portal.
‘Korea has come a long way,’ says Nahm. ‘In 2009, we were removed from the Office of the US Trade Representative’s “Special 301” watch list of countries, due to significant improvements on IP Rights enforcement, including pending legislation that will strengthen IP Rights protection.’ KIPO now has a special judicial police squad to step up anti-counterfeiting activity, and other law enforcement agencies are also working to address this issue.
In addition, KIPO has been rolling out more customer-orientated policies for managing IP – although, in this area, as in so many, Korea has long embraced technological solutions. ‘KIPO introduced e-filing more than 12 years ago, being only the second IPO to do so after Japan’s,’ says Nahm. ‘Now, most of the processes are electronic – we’re up to about 97% e-filing, which makes Korea the number one territory worldwide for electronic filing.
‘Those systems also handle trials, rejections and all correspondence,’ he adds. ‘That’s convenient for companies and law firms operating here.’
An IP-focused government
Obviously, Korean state agencies are fully behind the strategic push to develop and protect the nation’s IP. But that enthusiasm goes all the way to the top, and it is this high-level understanding that has created the ‘wind of change in Korean IP,’ as Steve Kim, CPA Global’s Director for Korea, calls it.
In July 2011, the newly enacted IP Framework Act took effect, codifying the creation, protection and use of all IP Rights. ‘All laws, regulations and policies will be implemented in line with the Act,’ says Kim.
The fact that KIPO has a Patent Prosecution Highway with eight countries and has launched the Korean Patent Information Online Network means it’s much more integrated into the global system than before.
So, Korean companies now have both the support and the opportunities to make the most of their IP; which, in turn, is also creating opportunities for law firms and service providers to fill a growing skills gap as more corporations and agencies seek to supplement their in-house IP headcount.
‘Our bigger companies – such as Samsung, LG and Hyundai – are very keen to increase the number of patent filings they’re making abroad,’ says Nahm. ‘Indeed, they’ve sharply reduced their filing activities in the Korean market to focus on a big increase in filings overseas. It’s part of a general shift among those major companies to put the emphasis on quality of IP Rights management, not quantity.’
One reason they can do this is because the big companies have their own first-rate in-house IP Rights resources. Samsung, for example, has 180 patent lawyers out of roughly 300 lawyers on staff; LG has around 150 IP specialists. So they have their own infrastructure, but they continue to look for new sources of IP expertise to sustain and build on their capabilities.
The sheer volume of activity, boosted by government support and corporations eager to stake their IP territory, certainly means Korea is no place for an under-resourced IP team.
Furthermore, operating in global markets means Korean businesses need greater IP protection, both at home and abroad. In recent years, this has brought an increasing demand for specialist IP management services and software. Leading international IP services and software provider CPA Global has been active in the Korean market for more than 15 years, and has evolved and grown together with its Korean clients in order to meet their growing IP needs.
In addition to supporting outward-looking Korean companies, who are rapidly expanding on the world stage, CPA Global is well placed to work with foreign businesses and law firms attracted to the Korean market by the country’s latest Free Trade Agreements, which will open up the market from 2012.
‘Recent legislation has narrowed the differences, but overseas companies and law firms still need to understand the Korean market to work here,’ says Nahm. ‘Korean businesses like to develop new iterations of innovations quickly. So we have lots of cases filed here – many prior patent rights and trademark rights. It means that, when overseas players come here, they must be diligent in their searches.’
CPA Global’s Kim agrees and says this is an area where specialist IP services providers can help. ‘We can take on the burden of undertaking that research work – then assume some of the risk around IP management,’ he explains. ‘Whether we’re working with Korean or foreign companies, the idea is to free up their in-house IP experts and lawyers to enable them to focus on the critical matters of ensuring that their IP portfolios are aligned with their organisation’s business strategy and that they are maximising the value of their IP Rights.’
And that opens up even more opportunities around the commercialisation of IP. ‘Korean businesses are looking at licensing, cross-selling and bundling IP assets to mould their IP portfolios in a global context,’ says Kim. ‘Indeed, with many big companies, we think IP could be contributing more to their revenues than it is today.’
How far Korean companies go down that route remains to be seen. But one thing is for sure, Korea is definitely rising, and so is the value and appreciation of its IP.
IN THE GLOBAL CONTEXT
South Korea is geographically sandwiched between one of the long-standing powerhouses of global IP, Japan, and the nation poised to become a dominant player – China. The IP offices of the three countries are informally known as the tripartite, and have stepped up formal cooperation. Between them, Japan, China and South Korea represent, by far, the world’s number one region for filing IP Rights.
The People’s Republic of China (PRC) has targeted intellectual property (IP) as a major competitive tool and aims to increase patent filings to two million in 2015. In its latest report, the World Intellectual Property Organisation (WIPO) says the global surge in industrial design filings is largely down to Chinese activity.
But observers say slack processes and state incentives for academics and businesses to file mean frivolous patents are a major problem. Local courts’ own data says there were 30,626 first instance civil IP Rights cases filed in 2009, a 25% increase year-on-year.
You can find more info at the PRC’s own IP Rights page.
Japan remains one of the dominant players in world IP Rights. In June 2011, its IP Policy Headquarters, headed by the Prime minister at the time, Naoto Kan, launched the ‘Intellectual Property Promotion Plan 2011’ aimed at promoting Japanese IP, as well as further smoothing global searches and filings. The Japan Patent Office is a major user of outsourced search services, which it sees as a key way of speeding up its IP procedures with a relatively static group of examiners.
More info at the efficient Japanese Patent office.