Expansion of Patent-Based R&D... KIPO Leads as a 'Global IP Powerhouse'

In a recent interview with Asia Economy, Park Won-joo, Commissioner of the Korean Intellectual Property Office, introduced measures to expand patent-based research and development for the technological independence of domestic companies. Photo by Moon Ho-nam munonam@

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The Korean Intellectual Property Office (KIPO) is placing greater emphasis on expanding patent-based research and development for the technological independence of domestic companies and strengthening national technological competitiveness through the utilization of patent big data. The plan is to expand the use of patent big data across all industries and revise laws to protect intellectual property.

◆Utilization and Expansion of the World's '430 Million' Patent Big Data=First, KIPO plans to enhance industrial competitiveness by expanding the use of patent big data in both government and private sectors and supporting the creation of core and standard patents.

Last year, KIPO integrated patent big data into five major sectors?biohealth, hydrogen industry, display, system semiconductors, and secondary batteries?to promote industrial development in each field. This approach involves discovering promising technologies through big data and enhancing competitiveness in each industry by aligning them with government R&D planning.

Furthermore, by 2022, KIPO aims to discover promising technologies in 17 new industries such as artificial intelligence and virtual/augmented reality, as well as in 10 key industries like home appliances and petrochemicals where securing foundational patents is highly likely, and to lead research and development planning by technology in each sector.

In particular, within the first half of the year, a 'National Patent Big Data Center' will be established, providing a platform where patent information analysis results generated by the center can be continuously supplied to both government and private sectors. This platform will autonomously build and maintain major countries' patent information, utilize automated tools to detect unique trends and emerging technologies, and disclose them online.

Graph showing the trend of domestic intellectual property finance scale from 2015 to 2019. Provided by the Korean Intellectual Property Office.

◆Rapid Growth of the Intellectual Property (IP) Finance Market... Minimizing Risks in Secured Loans=According to KIPO, the domestic intellectual property finance market exceeded 1 trillion won for the first time last year.

Specifically, last year, loans secured by intellectual property rights amounted to 433.1 billion won, guarantees issued based on intellectual property rights totaled 724 billion won, and investments made directly in companies holding excellent intellectual property rights or in the rights themselves reached 193.3 billion won.

IP finance is a type of financial system where companies raise business funds by obtaining loans or investments based on intellectual property rights such as patents, rather than fixed assets like real estate. The annual scale of IP finance has steadily increased, from 411.5 billion won in 2015, 577.4 billion won in 2016, 687.1 billion won in 2017, 763.2 billion won in 2018, to 1.3504 trillion won last year.

In particular, KIPO plans to designate this year, following last year, as the inaugural year for the formation of the IP finance market, laying the foundation for rapid growth of technological innovation in domestic small and venture companies with financial support.

To this end, last year KIPO signed business agreements with the Financial Services Commission and five major commercial banks?Shinhan Bank, KB Kookmin Bank, Woori Bank, NH Nonghyup Bank?to establish a foundation for revitalizing funding for regional small and venture companies through IP finance.

KIPO intends to expand the scale of the IP finance market while also focusing on minimizing financial sector risks associated with IP-secured loans.

The launch of the 'IP Secured Loan Recovery Support Organization' on the 18th of this month aligns with this effort. This organization purchases intellectual property at up to 50% of its value when innovative or venture companies that have taken out IP-secured loans become insolvent, compensating banks for losses incurred from the loans. It also plays a key role in generating revenue through licensing, sales, and other means using the acquired intellectual property.

KIPO expects that with the establishment of this organization, banking transactions based on intellectual property will be activated, and it will become significantly easier for companies to secure commercialization funding through intellectual property.

Major Amendments to the Patent Act and the Unfair Competition Prevention Act. Provided by the Korean Intellectual Property Office

◆'Effective Protection' of Intellectual Property=KIPO is also placing emphasis on improving laws and systems to strengthen the effective protection of intellectual property and enhancing the ability to respond to intellectual property infringement cases overseas.

First, KIPO plans to make compensation for damages more realistic so that rights holders can receive damages exceeding their production capacity in cases of intellectual property infringement. Additionally, it is pursuing the expansion of the scope of punitive damages, which allow triple compensation for intentional patent and trade secret infringements, to include trademarks and design fields.

In particular, KIPO intends to change patent and design infringement from a complaint-based offense to a 'semi-public prosecution offense' (allowing investigative agencies to conduct investigations ex officio without a complaint period limit) and strengthen the legal responsibility of online businesses for the distribution of counterfeit goods online, thereby taking a strong stance against intellectual property rights infringement.

Moreover, to proactively respond to intellectual property infringement, KIPO will strengthen its authority to conduct ex officio investigations into unfair competition acts such as idea theft and product form imitation. As part of protecting intellectual property related to Hallyu entertainment, including K-POP, KIPO will focus its efforts on raising awareness of intellectual property among associations and agencies, and conducting joint crackdowns and planned investigations on counterfeit goods.

Park Won-joo, Commissioner of KIPO, stated, "In the past, intellectual property was recognized only as a means of technology protection, but now we have entered an era where intellectual property itself is acknowledged as a new industrial and economic value. KIPO will strive to help domestic industries and companies find their direction through intellectual property and invigorate the intellectual property market so that Korea can rise as a global technology powerhouse."