Korean Intellectual Property Environment
Korea, which was one of the poorest nations in 1950’s, has grown to be one of the world's top ten economic powers and the fourth-largest patent powerhouse. With this remarkable growth, Korea has emerged to be a greatly one of the mose important countries in which major global companies need to establish strategies for the intellectual property rights.
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 are advantageous for manufacturing companies in improving their competitiveness.
Korean companies have accounted for the top share in the global market in 149 items and top 5 in more than 400 items. Accordingly, Korean companies need a substantial volume of parts and equipment. 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 have been increasing steadily every year. Korea's 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 Korea's aggressive investment in R&D, technological competitiveness, the technology sector of Korea's economy will continue to grow.
Korea has the 4th largest volume of patent applications in the world, and it has become widely known as a superpower in patents. The Korean government and KIPO take great efforts to create and protect the intellectual property rights, which is to the benefit of owners of Korean intellectual property.
More than 50% of the foreign patent applications in Korea are from United States and Japanese citizens. This historical pattern is attributed to the fact that the United States and Japan have close economic relationships with Korea and highly value intellectual property. As Korea expands its trade with other countries through various efforts such as conclusion of free trade agreements (FTA agreements) with many countries, including China, more and more companies from various countries are increasingly applying for intellectual property protection in Korea.
Korea is based on a technology-intensive trading. Korea 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 continue to increase.
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 a pilot market of high-tech products and consequently as a pilot territory for protection of the intellectual property rights. Korean consumers are well-known for their sensitiveness in trends and demand for high quality products. Therefore, the 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 have a high chance of being successful in the world market. For this reason, many multinational companies launch their products and secure patents in the Korean market.
Other advantages that overseas companies can enjoy by applying for patents 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 have Ph. D. degrees, around 400 in 2011). It has helped KIPO to offer and maintain very high quality in examination of 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 issuance.
Furthermore, South Korea has executed the Patent Prosecution Highway(PPH) with many different countries, including United States, China, Europe, Japan, Portugal, Israel, Sweden and Spain. Applying for patents in Korea allows global companies to determine the patentability of their technology in other major countries more quickly and more accurately.