1 April 2011Patents

An interview with Soowon Lee

In the wake of the financial crisis, IP offices seem to be becoming more like businesses. They have strengths and weaknesses, and they are faced with opportunities and threats. They must protect their stakeholders by trying to cover costs and break even, while providing the best service that they can for their customers. It seems that as a head of office departs, the replacement arrives armed with a new business plan.

Soowon Lee has been commissioner of KIPO (Korean Intellectual Property Office) since May 2010. His two-year term of office comes in the wake of the global financial crisis; he has become involved in South Korean intellectual property policy-making at a time when innovation is being mooted as an economic saviour.

Lee previously worked in the Office of the President as secretary to the president for Economic Crisis Management, a body that was set up to deal with the financial crisis. He has also spent 30 years working for the Economic Planning Board and the Ministry of Strategy and Finance. He seems to be in a position to not only understand the link between economic growth and innovation, but exploit it as well.

Lee says: “In the current era of open innovation, the responsibilities of an IP office need to go beyond the examination and granting of patents. One of the most important roles of an IP office is to help enterprises create IP and obtain IPRs. An office should also contribute to the development of the national economy by increasing the protection and enforcement of IPRs.”

KIPO is funded by the revenue it accrues from application and registration fees, and does not receive tax-derived funding. “The work of an IP office is mostly handled by human resources,” Lee says. “For that reason, our personnel expenses amount to 97.2 billion won ($88 million) or 31 percent of our total budget of 363.3 billion won ($330 million).”

He says: “The role of an IP office has been gradually expanding beyond the provision of examination services to fostering the creation of IP and supporting the acquisition of IPRs. In light of these considerations, I believe the budget needs to be boosted so that we can more effectively promote prior art searches, improve our automation system for IP administration, and foster the creation, utilisation and protection of IP.”

He adds: “We are planning to provide assistance in conducting prior art searches for national R&D projects. The projected savings for the national R&D budget are expected to be worth about 5 trillion won ($4.5 billion). In addition, we aim to help small and medium-sized enterprises obtain patents and create excellent brands. We hope to do that by providing them with consultations on IPR management and by offering them support in the acquisition of IPRs.”

Family ties

The South Korean government understands the importance of innovation to economic growth, according to Lee, and plans are in place to boost an economy that has enjoyed rapid growth in the past. The Framework Act on IP is in place and ready to be enacted this year.

He says: “Since IPRs are the fruit of innovation, the Korean government believes that the timely acquisition, effective utilisation and appropriate protection of IPRs are a driving force of economic growth. The Korean government is determined to promote pro-IP policies. To date, various government organisations have individually handled IP polices. But when the Framework Act on IP comes into effect this year, the planning and implementation of IP policies will be handled from a pan-government perspective.”

South Korea’s economy grew by 9, 7 and 4 percent in certain years during the last decade. Lee believes that the conglomerates in South Korea, such as Samsung, had a lot to do with this.

He says: “I believe the strategic investment and continual innovation of Korean conglomerates have contributed to this miraculous growth. One Korean conglomerate, for example, has begun patent-valued management under the slogan of ‘no patent, no future’, and last year it ranked second—behind IBM—in the number of patents issued by the US Patent and Trademark Office.”

The conglomerates understood the importance of intellectual property to their businesses as early as the 1980s. Some of them established organisations that actively promoted the acquisition of patents in South Korea and abroad. In the 2000s, they strengthened these patent organisations by appointing chief IP officers, and the conglomerates themselves led the way in IP management by increasing their international patent filings.

South Korean conglomerates owned almost 200,000 patents at the end of 2010. This represents around a quarter of all patents registered at KIPO.

Lee adds: “In 2010, Korean conglomerates filed 39,312 patent applications, a portion that constitutes 24 percent of the total patent applications. Foreign companies, on the other hand, filed 35,537 patent applications, or 21 percent. These statistics vary each year, but Korean conglomerates usually file slightly more patent applications than foreign companies.”

South Korea is keen to recreate the growth it has enjoyed over the last decade and sustain it for the long term. Exports in industries including semiconductors, wireless telecommunications equipment, motor vehicles and computers have contributed to 43.4 percent of its GDP. South Korea’s economy relies on its position as a leading exporter among the G20 nations. “Clearly, we are committed to creating and effectively protecting patents of high added value,” says Lee.

“One Korean conglomerate, for example, has begun patentvalued management under the slogan of ‘no patent, no future’, and last year it ranked second—behind IBM—in the number of patents issued by the US Patent and Trademark Office.”

He explains: “For more efficient R&D in the public and private sectors, we promote R&D policies based on the utilisation of patent information. We also help small and medium-sized enterprises, especially those with strong R&D capabilities but relatively weak IP management skills, to protect their R&D outcomes with patents or other types of IPRs. In addition, we provide assistance in the research of patented technology trends for government-supported R&D as a way of preventing redundancy in R&D investments.”

These efforts seem to help South Korean innovation. “According to the 2008 OECD Main Science and Technology Indicators,” says Lee. “Korean residents produce 2.19 patents per million dollars of research. That figure is significantly higher than the corresponding figure in Japan (0.98) and the US (0.22).”

Good ship KIPO

Improving patent quality and reducing the pendency period are fundamental aims for any IP office charged with aiding economic efforts. Lee’s office is no different. “I have been endeavouring to ensure that KIPO remains competitive in terms of its examination pendency period and examination quality,” he says. “[We need to] satisfy the needs of enterprises for swift acquisition of strong IPRs.”

South Korean patents had a typical pendency period of 18.5 months for the first action and 24.6 months for the final action in 2010. Lee says that KIPO is aiming to shorten the first action pendency period to 12 months with the recruitment of 300 new examiners by 2015. This would take the number of KIPO examiners to over a thousand.

He adds: “We also plan to extend the outsourcing of prior art searches. As in other countries, there are limits on the number of government personnel. We therefore plan to support the examination stage by extending the outsourcing of prior art searches in fields where external resources can be utilised. This year we plan to increase the outsourcing by 26 percent, to 81,500 cases.”

Lee believes that the quality of South Korean patents is comparable to that of other IP offices. Although Patent Cooperation Treaty search fees increased by 80 percent in 2010, KIPO still received 13,877 requests: 96 percent of these requests came from US companies including Microsoft, Hewlett Packard, Intel and 3M. “[This] is a testament to the quality of our services,” says Lee.

KIPO’s services are recognised and trusted because of the office’s flexibility in the face of evolving technologies and the increasing number of patent applications these bring, according to Lee.

He says: “The directors of examination divisions and the chiefs of examination sections guide the examiners throughout the entire examination process. We also have examination quality assurance officers, who are responsible for evaluating the examination results and ensuring the overall quality of patent, trademark and design examinations.”

The office has also established best practices that help tackle the difficulty of examining new and complex technologies.

Lee explains: “The emergence of cutting-edge, fusion and complex technologies has led to the establishment of three new examination divisions. In the case of complex technologies, more than two examiners are consulted for the sake of better examinations. We also ensure that PCT applications are handled with an adequate level of expertise by entrusting them to designated examiners and task forces.”

He adds: “Special training is offered to examiners to help them better understand new, fastchanging technologies. In tailoring the training for examiners, we identify their needs and dispatch them to universities and enterprises at home and abroad, where they can keep abreast of new technologies in the fields of information, biology, nanotechnology, and so on.”

This work extends to international collaboration. KIPO has extended co-operation with other IP offices since 2008. It is one of the five major IP offices known as the IP5. This group includes the Japan Patent Office, the European Patent Office, the US Patent and Trademark Office, and the China Intellectual Property Office. Lee says: “KIPO is actively collaborating in efforts to eliminate unnecessary duplication of work among the five offices.”

Handing it to the brands

KIPO seems to be responding to the needs of inventive businesses, but it still has some work to do if it is going to better help them to protect their brands. There is a backlog of trademark applications at KIPO, and Lee acknowledges that the office needs to respond to fast-changing markets and the needs of businesses if brands are going to get the protection they deserve.

“Although our examination pendency period for patents is shorter than that of other offices,” he explains, “our pendency period for trademarks last year—which was 11 months—was significantly longer than that of the US’s three months and Japan’s six months.”

He adds: “We plan to shorten the pendency period for trademarks to less than six months by 2015, though six months is not that fast in comparison with other IP offices. Shortening the pendency period when faced with an examination backlog is a difficult challenge. Nevertheless, this year we plan to recruit additional trademark examiners and improve the efficiency of our examination practices so that we can shorten the pendency period to less than 10 months.”

KIPO also intends to add anti-counterfeiting initiatives to its ever-expanding business plan. Lee says: “We plan to intensify crackdowns on counterfeit goods by utilising the special judicial police authority that was granted to our office last year. That way, we can raise public awareness of IPRs and bolster the level of national IPR protection.”

As intellectual property becomes more of a business than a set of laws, it seems only right that IP offices change the way they behave and operate to suit the needs of the market. South Korea’s economy has grown at a remarkable rate, but it has since slowed, like the economies of many nations. It needs a flexible IP office if it is going to exploit innovation—and this flexibility must extend to how it behaves in a wider context.

Lee says: “KIPO will hopefully play a responsible role in the [future] by sharing some of Korea’s practical wisdom and experience of utilising IP policies to achieve its rapid and phenomenal economic growth with developing and lessdeveloped countries.

KIPO signed a memorandum of understanding with Samsung Electronics in January for the development and implementation of effective technologies for poor and developing countries. It will provide support for information searches of patent information, and Samsung will develop the technologies.

“I also hope to help create a social atmosphere that encourages the fair use of IPRs,” says Lee. “To this end, I will actively promote policies for social minority groups and the public good by extending invention education and public patent attorney services.”

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