[The Era of Intellectual Property Surplus] KIPO Annual Revenue Surpasses 600 Billion Won... Now Is the IP Era

②Patent Office 'Making Money' from Fees
Record High Industrial Property Fees
13 Million KRW to Maintain One Patent for 20 Years
237,000 Patent Applications Last Year

Last year, the Korea Intellectual Property Office (KIPO) recorded the highest-ever revenue from patent and other industrial property rights fees. KIPO is the only central government agency that generates and uses its own budget. Last year, Korean companies paid more than 270 billion won in fees to KIPO, and foreign companies willingly spent 220 billion won. In particular, COVID-19 accelerated the era of intellectual property (IP). A "war without gunfire" is underway to respond to the digital transformation economy and to secure new markets.

On the 7th, KIPO announced that the amount paid for industrial property rights fees last year reached a record high of 596.5 billion won. Industrial property rights include not only patents but also trademarks, designs, and utility models. When combined with other income such as interest and property revenue earned by KIPO, total revenue easily exceeds 600 billion won. This amount is more than enough to cover KIPO’s annual operating expenses and personnel costs.

Patent fees are divided into application fees, examination request fees, new registration fees, and annual registration fees. The cost to apply for and maintain one patent (with 10 claims) is about 3.3 million won over 9 years, and about 13 million won over 20 years. The longer the patent is maintained, the higher the cost. In industrial property rights fees, the ratio of domestic to foreign payers is roughly 6 to 4. Last year, large domestic companies paid 146 billion won, and medium and small enterprises paid 125 billion won in patent fees. Additionally, individuals (56 billion won), universities and school corporations (20 billion won), and public and research institutions (20 billion won) are included among domestic payers. Foreign companies paid 220 billion won.

Last year, due to the global economic downturn, individual patent applications decreased (-13.6%), but applications from large companies (9.3%), foreigners (4.0%), and small businesses (0.8%) increased. The number of patent applications remained steady at about 237,000 compared to the previous year. Applications increased mainly in advanced technology fields such as semiconductors, e-commerce, and digital communications. In August last year, LG Electronics filed a patent for a pet management system. This technology measures the activity data of pets and transmits it to the user’s smartphone.

Last year, foreign companies’ domestic patent applications also clearly increased in the semiconductor sector, mainly from the United States and Europe. Kim Ki-beom, Director of the Information and Customer Policy Bureau at KIPO, said, "Foreign companies’ domestic patent applications are increasing, and competition among countries to secure advanced technologies is intensifying." Last year, international patent (PCT) applications reached about 22,000, a 6.8% increase from the previous year. In particular, applications from small and medium enterprises (13.2%) and large companies (15.6%) increased significantly. Director Kim said, "This is the result of focusing on overseas market entry through technology development without being discouraged by the economic downturn."

Korea’s KIPO belongs to the top five patent offices worldwide (IP5), which account for more than 85% of global patent applications. In 2021, Korea ranked 4th in patent applications with 240,000 filings, following China (1.58 million), the United States (590,000), and Japan (290,000). In 2021, Korea ranked first in the number of domestic patent applications per GDP of 100 billion dollars, with about 8,200 applications, and per million population, with 3,600 applications. Director Kim said, "The fact that companies pay to maintain patents means they are generating revenue from those patents," adding, "The technological changes brought about by the COVID-19 pandemic have been a catalyst for the increase in patent applications."