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IP Recognition in Enterprises: Focus on IP and Economy

This article discusses the role of intellectual property (IP) in economic growth, with a focus on the current status and policies of the Republic of Korea. It explores the correlation between IP protection and competitiveness, the impact of IP on technological innovation and economic growth, and the importance of strategic use of IP for economic development.

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IP Recognition in Enterprises: Focus on IP and Economy

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  1. Improving IP recognition in Enterprises - Focus on IP and Economy - December 13, 2007 Young-Min KIM Deputy Director Korean Intellectual Property Office (KIPO)

  2. Contents • Where Are We? • Role of IP on Economic Growth • Current Status of the Republic of Korea • Policies on Commercialization • The Transfer of Technology • Conclusion

  3. Where Are We?  Twenty-first century: knowledge–based society  Endless competition; change in the competition paradigm  Source of competitiveness  creative knowledge and information • Role of IP on economic development •  Catalyst for the development of indigenous technology and for building the national innovation system  Correlation between IP protection and national competitiveness (IMD report)

  4. Korean Intellectual Property Office Role of IP on Economic Growth  Patent applications in Korea: parallel rise in applications and economic growth since the 1970s  GNI per capita: (1960s) below $100 → (2006) $18,372 (29th in the world) Patent applications in Korea, 1947-2004

  5. Korean Intellectual Property Office  The progress of the IP system following the industrial development of Korea  Introduction of the IP system (1945 to the mid-1960s) - Most applications were filed by Korean residents. Enhancement of IPR protection in line with international standards (from the mid-1980s) - Most applications were filed by foreigners. Stronger IPR protection (after the mid-1980s)   - Korean residents filed more applications than foreigners because of the active R&D of Korean enterprises.

  6. Korean Intellectual Property Office  Changes in the IP system and the type of applicants

  7. Korean Intellectual Property Office  □ Empirical studies on IP and technological innovation in the Korean economy (STEPI)  Analysis of the relation between IP and technological progress  Ten manufacturing industries, including the electronics, petrochemical industries.  IPR protection boosts technological innovation  Stricter IPR enforcement leads to a swifter industrial response against infringements.  Korean companies realize that IPRs are a major tool for protecting technical innovation.

  8. □ The tangible impact of IPR protection • Greater IPR protection had a huge impact on pharmaceutical products (1987). • Pharmaceutical companies boosted R&D investment and laid the foundation for more research institutes.

  9. Korean Intellectual Property Office Sharp increase in pharmaceutical IP applications (since the strengthening of IPR protection in the mid-80s) The portion of domestic applications among the total applications

  10. Korean Intellectual Property Office □ The relation between technological innovation and economic growth The impact of technological innovation on economic growth is continually growing. Analysis of growth factors in the economic growth of Korea

  11. □ Study of the relation between IP and economic growth (Korea Development Institute, 2003) • Increase in IP applications → improvement in technical progress and the total factor productivity → increase of GNP and economic growth. • A 1% increase in IP applications in Korea → a 0.11% increase in the economic growth rate. • The growth rate of IP applications is closely related to long-term economic growth.

  12. Current Status of the Republic of Korea Fourth in IPR applications, 5th in PCT applications, 4th in ISA  Number of IPR applications (2006): 368,000  Number of PCT applications (2006): 5,935  Number of PCT applications as an ISA (2006): 6,645 • Commercialization ratio  (2001) 37.3% → (2002) 26.6%→ (2004) 38.9% → (2005) 33.2% •  Bottleneck: lack of funds (46.3%), shortage of marketing • ability (17.3%), illegal copying (8.1%)

  13. Status Category Size of R&D budget 8th($16 billion, 2005) National R&D spending Japan 3.12% 2.64% USA 2.59%  Germany 2.51%  France 2.26% R&D/GDP Canada 41.6%  USA 28.3% 20.3% Efficiency of R&D Rate of TT USA 40.2% 10.9% Contribution of R&D to economic growth • Relatively low efficiency of R&D spending • Size of R&D budget is similar to those of developed counties ★ Strategic use of IP is necessary for economic development

  14. Policies on Commercialization Direction Provide customized support programs based on patentees’ commercialization capability and intent • For the patentee who is incapable of independent commercialization: • Facilitation of the transfer of patented technology • E.g. University and research institutes • For the patentee who wants to independently commercialize an invention: • Provision of financial aid • Support of expanding market places: exhibitions, cyber shopping malls • For fair and transparent support: • Establishment of an objective appraisal system

  15. Organization of the Commercialization Council 18 organizations (8 governmental authorities & 10 related agencies) SM Business Admin. Rural Development Admin. KIPO Forest Service Maritime & Fisheries Science & Tech. Industry & Energy Agriculture & Forestry Small Business Corporation KIPA Commercialization Council Korea Development Bank Technology Credit Guarantee Fund • Inst. of Industrial Tech Evaluation Univ. of Science & Technology Agency for Tech & Standards Korea Technology Transfer Center Korea Inst. of Design Promotion Inst. of Science & Technology

  16. Financial Support Collateral Support Consultations Notifications • Main services of the Commercialization Council • Funds for R&D and acquisition of IP • Funds for IP valuation and transactions • Funds for launching new products • Funds for establishing enterprises • Funds for facilities and mass production Council • Provision of IP information • Discounted application fees • Nurturing of IP experts • Authentication and guaranteeing of new technologies • Evaluation and marketing of new technologies • Guidance on managerial or technical problems • Advertising and marketing of new products 명세서 기재 • Consultations on general aspects of commercialization • Notification of the council’s support programs • www.kipa.org

  17. Operation of the Commercialization Council Commercialization Council (Working Group) Supervision of collateral support Entrustment of management Reporting of performance Management Authority (KIPA) Support Organizations (Financial Aid) 관리기관 (한국발명진흥회) Monitoring Support status Application Support & management Satisfaction survey 특허기술활용희망자 (신청인) Applicant for Commercialization 특허기술활용희망자 (신청인)

  18.  Assistance in the manufacture of prototypes  Manufacturing and testing of prototypes before commercialization  Limit of assistance  70-90% of actual cost (depending on the technology)  Maximum subsidy of US$50,000  Annual budget increase Cases of assistance: (2002) 35→ (2003) 40→ (2004) 55→ (2005) 79 → (2006) 165

  19. Support for IP valuation • Objective appraisal of the market value as a back up for IP transactions or commercialization •  Valuation of the technology and estimation of • profitability • Subsides for individuals or SMEs for up to 90% of the valuation cost (or a maximum of US$30,000) •  Designation of 9 institutes as patent appraisal institutes.

  20. The Transfer of Technology  Operation of patented technology markets • Internet Patent Mart (IP-Mart) •      Launched in April 2000 (www.ipmart.or.kr) • Managed by KIPA •     Provides detailed info about technology •      Runs a technology database of around 69,000 items • (2006) •  Auctions patented technology (since Jan. 07) • Changes the displayed technology every 3 months

  21.  IP Market        Opened November 2000       Managed by KIPA           Offers support for DVD simulation and appraisal of technology    Success in 34 cases (2006)  Transaction of state-owned patents        Patents invented by government employees while performing their duties Successful transfer of 134 nonexclusive licenses (2006)

  22.  Technology Transfer Fair • Opportunity for buying and selling technology •      List high-demand technologies from buyers • (123 technologies, first half of 2007) •  List new technologies of sellers • (558 cases, first half of 2007) •  Match buyers and sellers •  On-the-spot assistance from experts on technology • transactions •      Consultation and mediation for buyers and sellers •  Seminars on techniques of technology transactions •  Education on the IP system

  23.  SMEs IP Management T/F (2006.9. established) • Providing consulting on IP management of SMEs      Importance of IP Consideration of IP in R&D •  Commercialization •  IP Dispute •  Composition of Expert Pool •      All 71 Patent, Brand & Design Examiners as Consultants •  Procedure •     Apply, Selection, Diagnosis, Consulting, After-Management • Outcomes : 34 industries in 2006, 56 industries in 2007

  24. Conclusion • We aim to strengthen links between our financial support for commercialization and other programs. • We aim to cultivate new markets for excellent patented products. • We aim to promote technology transfer through establishing a foundation for patented technology appraisals. • We aim to build a user-friendly technology transfer system.

  25. Thank You ymk738@kipo.go.kr

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