“International Patent Law Harmonization and Development”

DAESHIK JEH

DirectorPatent Examination Policy TeamKorean Intellectual Property Office

1 March, 2006

The Experience of Korea

Korean Intellectual Property Office

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2 Table of Contents

Economic Growth Ⅰ .

KIPO‘s Efforts for Harmonization Ⅱ .

Patent Statistics Ⅲ.

Effect of IP on Economic Growth Ⅳ.

Vision of KIPO Ⅴ.

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3 Ⅰ. Economic Growth (1)

Seoul in 2005Seoul in 1961

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4 Ⅰ. Economic Growth (2)

14.5% annual growth rate of GDP between 1961 ($2.3 billion) and 2005 ($768 billion)

YearCategory

1961 (a) 2005 (b)b/a

(Times)

GDP $ 2.3 B $ 768 B 334

GDP P/C $ 87 $ 16,000 184

EXPORT $ 55 M $ 284.4 B 5,170

IMPORT $ 390 M $ 261.2 B 670

Unit : B (billion), M (million)

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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

GDP Per Capita

0

2

4

6

8

10

12

14

16

18

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2005

Unit :

Thousand d

olla

rs

Amazing Growth (18.5%)

Finacial Crisis

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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)

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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.

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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

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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 industriesTried to shift from a developing country to an advanced country

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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))

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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)

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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)

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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)

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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)

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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).

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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).

0

10000

20000

30000

40000

50000

60000

70000

80000

Nu

mb

er

of

Reg

istr

ati

on

s

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

Number of Patent Registrations in KIPO

Foreigners

Residents

73,509(Residents+Foreigners)

53,416(72.7%)

(Residents)

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17 Ⅳ. Effect of IP on Economic Growth (1)

The number of patent/utility model applications has increased along with economic growth since 1970s.

The No. of Patent, Utility applications & GDP

0.E+00

5.E+04

1.E+05

2.E+05

2.E+05

3.E+05

1970 1975 1980 1985 1990 1995 2000 2005

Num

ber

of A

pplic

atio

ns

0

100

200

300

400

500

600

700

800

900

GD

P (

Bill

ion

dol

lars

)

No. of applications

GDP of Korea

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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

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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)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Un

it :

Mil

lio

n d

oll

ars

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Import & Export of technology

export

import

$ 4,147

$ 1,416(34.2%)

$ 1,276

$ 110(8.7%)

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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

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Effects of substance patents on the pharmaceutical industry after starting to protect substance patents in 1987

Effects Contents

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 licensed92 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)

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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)].

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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.

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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

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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

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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

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DAESHIK JEHkipo2006@kipo.go.kr

Phone: +82-42-481-5389, Fax: +82-42-472-3470

Thank you for your attention!