Korean IP Environment (The importance of prior occupation in the Korean technology market)
Korea, one of the poorest nations in 1950’s, has grown to be the world's top 10 economic power and the fourth-largest patent powerhouse as the indices show below. With these remarkable growth, Korea has emerged to be a greatly important country in establishing strategies for the intellectual property rights for many global companies.
There is a considerable demand for parts and equipment in Korea because its economic structure focuses on exporting technology-intensive products. Therefore, patent application in Korea would be advantageous for manufacturing companies in improving their competitiveness.
Korean companies have accounted for the 1st share of the global market in 149 items, and top 5 in more than 400 items. That also implies that Korean companies need substantial volume of parts and equipment. Thus, overseas manufacturing companies which specialize in parts and equipment may promote generation of stable earnings in Korea by acquiring the patent rights in Korea.
South Korean investment in R&D, and R&D ratio to GDP are both increasing steadily every year. Its R&D investment is the world's 5th largest, and its R&D investment to GDP ratio is ranked second in the world after Israel. With this aggressive investment in R&D, technological competitiveness and the technology sector of its economy are expected to grow further.
Korea has the 4th largest volume of patent applications in the world, and it has become widely known as a superpower in patent and as one of IP5. The Korean government and KIPO use their efforts to create and protect the intellectual property rights.
More than 50% of the foreign patent applications in Korea are being made by American and Japanese nationals. It is probably because US and Japan are most closely related with Korea economically. However, as Korea is anticipated to expand its trade with other countries through various efforts such as conclusion of FTA with many countries including China, more and more companies from various nations are expected to increasingly apply for a patent in Korea.
Korea is based on a technology-intensive processing trade, and it is one of the major technology markets of the world which imports technology from abroad and pays considerable royalties. The amount of royalties paid abroad by South Korea in 2012 is over 11 billion US dollars. As the Korean economy further grows, the amount of royalties and the size of Korean technology market are expected to increase even more.
Many global companies which are well aware of the merits of Korean market have competitively established R&D centers in Korea.
In addition, Korea is important as the pilot market of high-tech products and as the pilot territory for protection of the intellectual property rights. Korean consumers are well-known for their sensitiveness in trends and demand for high quality of products. Therefore, Korean market has already gained worldwide fame as a test-bed for new products and technologies, and it has been established as a formula that the products Korean consumers choose will be successful in the world market. For this reason, some multinational companies launch their products and secure patents in the Korean market initially.
Other advantages that overseas companies can enjoy by applying for patent in Korea are quick and high-quality examination.
For over 20 years, the Korean Intellectual Property Office(KIPO) has been employing many R&D experienced examiners, some of whom have engineering doctorate degrees (approximately 45% of total examiners, around 400 in 2011). It has helped KIPO to offer and maintain very high quality in examining patent applications. Also, KIPO’s efforts to speed up the patent examination process has paid off. Now, it only takes in average of 13.3 months to complete patent examination as of year 2013, and in case of accelerated examination, it only takes in average of 2-3 months from filing to results.
Furthermore, South Korea has executed the Patent Prosecution Highway(PPH) with other IP5: the United States, China, Europe, and Japan. In addition to these IP5, it has executed the PPH with Portugal, Israel, Sweden and Spain. Therefore, applying for a patent in Korea also allows global companies to determine the patentability of their technology in other major countries more quickly and more accurately.