Korean IT Firms and the War over Patents

In recent years, Korean firms have registered a large number of patents in the United States. As noted by the Chosun Ilbo  IBM registered the most patents in the U.S. last year with 5,896, and Samsung Electronics rose to No. 2 with 4,551 and LG Electronics ranked ninth with 1,490 patents. Judging by the number of registered patents, Korea is a major force, but the atmosphere is quite different on the frontlines, where Apple, Microsoft, Philips and other global IT companies have launched a patent war against their Korean rivals. They have started using patent and copyright law to protect their smartphone and LED technologies and to pressure Korean IT firms. The main battleground in the patent wars is the smartphone market.

As the Chosun Ilbo points out, U.S. companies virtually control the global market for operating systems, which determine the success or failure of a smartphone. Korean companies have plenty of patents for manufacturing technology, but very few for software.

LG to Increase Patent Experts for "Patent War"

As reported by Displaybank, LG Electronics has announced that it will increase the number of its patent professionals by 30% over the current number of 200 by 2013.  It is doing so in order to protect intellectual property in the U.S., China and Europe.   The article contains some interesting detail on LG's strategy.

In a broader context, some industry estimates are that as much as 80 percent of the global ICT market consists of software and content, with the other 20 percent consisting of hardware.   Despite the remarkable developments in hardware, including electronic devices of all sorts and more powerful digital networks, the information content and communication between human beings is still the most salient aspect of the emerging information age.  This means that intellectual property in general, a subset of which consists of patents, will become more and more important.

China Biggest Threat to Korean Intellectual Property

In a prior post dealing with Korea, Patents, Shift in Innovation Hubs I noted South Korea's growing interest in its own intellectual property.  Now, an article in this morning's Chosun Ilbo notes that China is the biggest threat to Korean intellectual property.  A survey was conducted by Gallup Korea for the Korean Intellectual Property Office (KIPO) on the overseas intellectual property cases of 1,202 domestic firms. Some 65 percent of all cases happened in China, and 12 percent each in Taiwan and in the United States. By sector, 24 percent of breaches happened in electrics and electronics, 22 percent in machinery and 21 percent in textile and clothing.  A KIPO official noted that “While the number of intellectual property infringement cases of Korean products is decreasing in other countries, it is rising in China."

Korea Part of a "Marked Shift in Innovation Hubs" Worldwide

Increased patent filings in North East Asian countries (mainly China and the Republic of Korea (ROK)) and the United States of America (USA) drove growth in worldwide filing of patent applications, which topped 1.76 million in 2006, representing a 4.9% increase over 2005, according to the 2008 edition of the World Patent Report of the World Intellectual Property Organization (WIPO). The Director General of WIPO, Dr. Kamil Idris, observed “A major increase in innovative activity in China, the Republic of Korea and the United States has driven the overall growth of patent filings in 2006. This reflects a consolidation of earlier trends which demonstrate a marked shift in innovation hubs around the world.” He further added “While use of the patent system remains highly concentrated among a group of countries, statistics show an increasing level of patent activity in emerging countries. This is an encouraging trend,” he added.
While statistics from the World Patent Report reveal patterns of concentration in patent activity, they also point to a growing tendency for applicants to file their applications in multiple countries. This trend towards increasing internationalization of patent activity is demonstrated by the growth in international filings through the Patent Cooperation Treaty (PCT) and in non-resident patent filings.
The period 2000-2006, saw a significant increase in the number of filings originating from Australia, China, India and the ROK. The average annual growth rate in patent filings for these countries was far above that of all reported countries in Europe and North America. Japan, the United Kingdom and Sweden experienced modest growth in patent filings (less than 1% a year).
In 2005 (the latest year for which technology data are available), the most intense patenting activity is evident in the following sectors: computer technology (144,594), telecommunications (116,770), and electrical machinery (121,350) technologies. Between 2001 and 2005, patent filings in computer technology, optics, and semiconductors grew by 5.3%, 5.0% and 4.9%, a year, respectively. There was a modest increase in pharmaceuticals filings (1.7%) and a decrease in biotechnology filings (-2.7%).