Intellectual property rights and technological catch-up in Korea

Chapter 4 investigates the role of the intellectual property rights (IPR) system in Korea’s technological catch-up. The detailed overview of the evolution of the Korean system of IPR shows Korea’s dynamic perspective on IPR policy. During the early stages, IPR were granted even to minor inventions or adaptations by local residents while there would be less need for domestic recognition of foreign IPR. However, during the later stages, with the growth of technological capacity, the need for international technology transfer and the local market for technology increased. Thus, protection of both domestic and foreign IPR needed to be provided. From the late 1980s, Korea increased substantially the level of the IPR protection and expanded the scope of patentable subjects. Korea has now attained the most developed level in terms of the scope of subject matters, including the most recent IPR like biotechnological inventions and business method inventions. Since then, as big business reached the technological frontier, the focus of government policies has turned to the following issues: encouragement of more IPR attainment by SMEs, commercialization/utilization rather than production of IPR, and utilization of R&D capabilities and the role of universities. We have also found some interesting facts in the trend of several IPR variables over the course of catch-up in Korea. First, in the early days of catch-up, Koreans filed mostly petit (utility) patents and few regular (invention) patents. Only at the later stages did the share of invention patents grow to exceed that of petit patents. Second, in the early days of catch-up, individual inventors filed patents. Corporations accounted for a small share. Later, the share of corporate assignees grew to exceed that of petit patents. Third, the relative shares between domestic and foreign patents in Korea show more dynamic patterns. In the early days, foreigners had no interest in Korean IPR and thus filed no patents, which led to the dominance of the domestic patents. This was reversed at a certain point in time when foreigners were filing the most number of patents. With the growth of the capabilities of domestic inventors (usually firms), the share of domestic inventors increased and eventually they registered a bigger number of patents than those filed by foreigners. The three facts suggest that the importance of patents and IPR had not been seriously recognized by Korean firms until the mid-1980s. Before then, Korea had been accumulating its absorptive technological capacity with focus on utility model patents. Then, only beginning in the mid-1980s, they began to aggressively invest in their own in-house R&D which led to the rapid building up of indigenous R&D capabilities.