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KIPO-CNIPA civil servants joined hands to protect the intellectual property (IP) rights of Korean companies entering China (News Letter No. 534) |
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KH |
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2024-08-16 |
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1. KIPO-CNIPA civil servants joined hands to protect the intellectual property (IP) rights of Korean companies entering China
- KIPO held a ‘South Korea-China IP exchange meeting’ (July 9~12, 2024).
- KIPO also held a meeting of civil servants for South Korea-China IP protection and a seminar for Korean export companies to China, etc.
KIPO invited Chinese IP-related civil servants and the relevant organization(s) to Korea for a ‘South Korea-China IP exchange meeting’ from July 9~12, 2024.
As Korean companies’ overseas expansion has become more active, difficulties related to IP rights, such as unauthorized overseas preoccupation of trademarks of K-brands, damages due to counterfeit products, etc., have been frequent. In this regard, since 2008, KIPO has held the ‘IP exchange meeting’ with major foreign countries to protect the overseas IP rights of Korean companies.
In this exchange meeting, Chinese civil servants in charge of performing work to crack down on IP infringement or IP-related administrative work, and the relevant organization(s) were invited to proceed with the programs: ① a meeting of civil servants for South Korea-China IP protection, ② an IP protection seminar for Korean export companies to China, and ③ a visit to a company site, etc.
① In the meeting of civil servants for South Korea-China IP protection (July 10, 10:00 AM), KIPO’s IP protection work was introduced, and the two countries’ IP protection-related opinions and information were shared. An opportunity to promote exchange and cooperation between the two organizations of South Korea and China was arranged.
② In the IP protection seminar for Korean export companies to China (July 11, 10:00 AM), the organization as the Chinese visiting group was introduced, the working status was shared, the Chinese IP systems were presented, and a question and answer session was provided for those in charge of IP in 20 Korean companies exporting to China.
In the seminar, the Chinese visiting group presented a diversity of IP issues that Korean companies investing in China or entering China were curious about: ▲procedures and measures to crack down over offline counterfeit products in China, ▲ procedures and require documents for reporting counterfeit products, ▲ calculation methods for damage scale due to counterfeit products, ▲ policies of malicious trademark applications and basis/criteria to determine maliciousness, and▲ major provisions of the amened Chinese Trademark Act, etc. Time was arranged for Korean companies entering China to ask questions and for China to respond.
③ In the visit to a company site (July 11, 15:30 PM), the IP difficulties of local Korean companies entering China were directly delivered to the civil servants in charge of Chinese IP and the discussion for the local IP protection was conducted.
2. R&D-Standard patents are connected.
- KIPO held a conference to spread standard patent strategies (July 5, 2024).
- The conference provided the best cases for a standard patent creation support project, and the trends of overseas standard patent systems, etc.
According to KIPO, a conference to spread standard patent strategies was held.
The conference was arranged to share the best cases for KIPO’s standard patent creation support project and the strategies to connect a company’s research and develop (R&D) and a standard patent and to strengthen the standard patent capabilities of industry, academia and research institutes.
The conference included ▲ awards to an excellent organization participating in the standard patent creation support project, ▲ standard patent-related special lectures, ▲strategies for standardization (standard patent) of companies and public institutions, ▲ excellent cases of the support project, and ▲ trends of overseas standard patent-related systems, etc.
The special lecture on ‘platform overview and future plan’ was presented by Hosik JANG, vice president of Avanci which is a global standard patent licensing platform. After that, the lectures were on the standardization and standard patent strategies related to KT (6G), IoT Communication Tech (quantum communication), Korea Electrotechnology Research Institute (electric vehicle charge). KIPO also introduced the standard patent licensing-related regulations, which were proposed by European Commission (EC) in April 2023 and passed the European Parliament in February 2024.
3. Counterfeits of Korean companies’ products (9.7 billion US dollars corresponding to 11.1 trillion Korea Won in 2021) were distributed worldwide, which was 1.5% of a total export amount.
- 1 of 2 counterfeits of Korean companies’ products were electronic products and most counterfeit products originated in Hong Kong and China.
- The losses due to the counterfeits were Korean companies’ domestic and overseas sales of 6.1 billion US dollars (7 trillion Korea Won), 14,000 jobs, and the government tax revenue of 1.57 billion US dollars (1.8 trillion Korea Won).
- Organization for Economic Co-operation and Development (OECD) published a report of ‘Illicit trade and the Korean Economy’.
According to OCED, the scale of counterfeits infringing Korean companies’ IP rights distributed worldwide reached 9.7 billion US dollars (corresponding to 11.1 trillion Korea Won in 2021). This number reached 1.5% of Korea’s total export amount in the same year.
1 of 2 counterfeits of Korean companies’ products, which were distributed worldwide, was electronic products. In addition, most counterfeits of Korean companies’ products originated in Hong Kong and China.
On July 3, 2024, OECD published a report, “Illicit trade and the Korean economy” which includes the above content. The report was a result of research which KIPO requested OECD, to analyze Korean companies’ economic damages due to the distribution of counterfeit products. This is the first case that OECD analyzed economic affects due to the counterfeits of Korean companies’ products.
<1 of 2 counterfeits of Korean companies’ products were electronic products and most counterfeit products originated in Hong Kong (69%) and China (17%). >
The report indicated that, although South Korea is a globally innovative country, since it is firmly integrated into the global value chain, it has structural vulnerability to counterfeit products in various sectors. According to OECD’s analysis, when counterfeits of Korean companies’ products are distributed, consumers would purchase the counterfeit products instead of genuine, and this ultimately has a negative impact on Korean companies’ domestic and overseas sales, such as export, manufacturing jobs, government tax revenues, etc.
According to OECD’s analysis, the scale of the worldwide counterfeit products infringing Korean companies’ IP rights was about 9.7 billion US dollars (corresponding to 11.1 trillion Korea Won) in 2021 and the number was considered as 1.5% of Korea’s total export amount. The most damaged items in 2020 and 2021 were electronic products (51%), textiles and clothing (20%), cosmetics (15%), miscellaneous goods (6%), toy games (5%), etc. The regions where these counterfeit products originated were Hong Kong (69%) and China (17%) occupying the largest proportions.
OECD quantitatively estimated negative impacts, such as the decrease of Korean companies’ domestic and overseas sales, the decrease of manufacturing jobs, the decrease of government tax revenues, etc. since the distribution of the counterfeit products spread.
The loss of Korean companies’ domestic and overseas sales was 6.1 billion US dollars (about 7 trillion Korea Won), which corresponded to 0.6% of manufacturing overall sale. By industry, home appliances, electronics and communication equipment industry had the largest loss at 3.6 billion US dollars, followed by automobile industry with 1.8 billion US dollars. Korean manufacturing job loss was 13,855 in 2021, which was 0.7% of manufacturing overall jobs.
OECD also estimated that a loss in terms of government tax revenues was a total of 1.57 billion US dollars (about 1.8 trillion Korea Won) in 2021.
In an emergency meeting of economic ministers (March 2023), Korean government had published a ‘plan to strength a response against counterfeits of K-brand products’, to strengthen a response to damages to Korean companies’ IP rights. The plan included the support measures as follows: the expansion of a country to block online counterfeit products to the whole world, the intensive support for an industry where counterfeit products appear to be common overseas, and the establishment of a public-private joint response system, etc.
4. The number of Korean companies’ US patent trials in 2023 was 107, showing an increase of 3.9% compared to the previous year.
- Of 107 US patent trials of Korean companies, 73 (68.2%) were of big companies and 34 (31.8%) were of small and medium companies and mid-sized companies.
- 23 cases were raised by Korean companies and 84 were filed against Korean companies… 64 of the number of cases filed against Korea companies were filed by a non-practicing entity (NPE).
- Inspection of overseas patent disputes is strengthened…support projects are quickly connected to Korean companies involved in overseas patent disputes.
The number of US patent litigation between a Korean company and a foreign company was 107 in 2023, showing an increase of 3.9% compared to the previous year.
On June 28, 2024, KIPO published an annual report of ‘2023 IP trends’, analyzing the trends of Korean companies’ patent disputes in US in 2023, so that Korean companies entering US are able to properly respond to patent disputes.
Of 107 US patent trials between a Korean company and a foreign company in 2023, the number of patent trials relating to big companies was 73 (68.2%), the number of patent trials relating to small and medium companies and mid-sized companies was 34 (31.8%). The number of the big company-related patent trials decreased from 75 in 2022 to 73 in 2023, whereas, the number of the small and medium company- and mid-sized company-related patent trials increased from 28 in 2022 to 34 in 2023.
Of 34 patent trials related to the small and medium companies and mid-sized companies, 19 were filed by the small and medium companies and mid-sized companies, which were more than the 15 filed against them. This is considered since Korean small and medium companies and mid-sized companies actively exercised patent rights against foreign companies.
Upon reviewing by 5 major industries, such as electricity and electronics, machinery and transportation, apparatus and equipment, chemistry and bio, the US patent trials of Korean companies were mainly filed in the electric and electronic fields, such as computers, communications, semiconductors, etc., still in 2023 after 2022. The number of the patent trials in the electric and electronic fields filed in 2023 was 85 (79.4%) of a total of 107 cases.
<23 US patent trails were raised by Korean companies and 84 were filed against Korean companies …64 (76.2%) of the number of cases filed against Korean companies were filed by NPE. >
Of 107 US patent trials related to Korean companies in 2023, the number of the cases raised by Korean companies was only 23 (21.5%) and most cases, 84 (78.5%) were filed against Korean companies. Of 84 patent trial cases filed against Korean companies, 64 cases (76.2%) were raised by non-practicing entity (NPE) and 20 cases (23.8%) were raised by manufacturing companies, etc. (non-NPE).
In addition, 57 cases (89.1%) of 64 patent trial cases filed by NPE against Korean companies were related to big companies and only 7 (10.9%) were related to small and medium companies and mid-sized companies.
5. Measures to strengthen the technological competitiveness of the industry are prepared by strategically utilizing industrial property bigdata
- Roles of industrial property information, such as establishment of economic security, support for industrial innovation, etc. were discussed.
- A ‘promotion team to establish a basic plan to utilize industrial property information’ was launched (June 27, 2024).
The first step in establishing cross-national policies starts to support for the operation of R&D, industrial and national security administration and the prevention of leakage of national security technology, by strategically utilizing industrial property bigdata reaching about 580 million cases worldwide.
KIPO held a launching ceremony of a ‘promotion team to establish a basic plan to utilize industrial property information’ (hereinafter, referred to as the ‘promotion team’).
According to the legislation of ‘management of industrial property information and promotion of utilization thereof’, the promotion team was organized as part of active administration to reflect expert opinions in the ‘basic plan to utilize industrial property information’ (hereinafter, referred to as the ‘basic plan’).
This basic plan which was established for the first time this year will discuss as key topics the following: the establishment of inter-agency cooperation system to prevent the security technology from leaking, the establishment of strategies relating to patent data-based technology, industry and economy, and the development of patent information management and utilization platform, etc.
The head of the promotion team said, “since patent data is an essential asset in accelerating technological development and strengthening companies’ and national competitiveness, it is important to maximize its value through strategic use and to promote innovation and growth in our society.”
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