S. Korea to create 500 bln won 'invention capital' fund

By Lee Joon-seung
SEOUL, July 29 (Yonhap) -- South Korea said Wednesday it plans to set up a 500
billion won (US$403 million) "invention capital" fund by 2016 to fuel growth in
the intellectual property rights market and protect local companies from legal
disputes.

The state-run Korean Intellectual Property Office (KIPO) said it will create the
envisioned fund, pooling capital from both state and private firms, by 2011. It
will be used to help buy up and commercialize ideas from local inventors,
laboratories and schools.
KIPO unveiled the plan at a meeting of the National Competitiveness Council,
chaired by President Lee Myung-bak.
The fund is also aimed at promoting creativity and enabling local businesses to
counter threats posed by foreign non-practicing entities (NEP), which specialize
in buying up patents and using them to demand royalty payments from
manufacturers.
"NEPs can become a problem because they rely solely on using patents and licenses
they have acquired to win payments from manufacturing companies," said Kim
Young-min, head of KIPO's industrial policy bureau.
Kim gave the example of Intellectual Ventures, a U.S. invention capital network
company, saying it has been buying up ideas in South Korea since 2008 in the
absence of competition from local firms.
"Because patent right issues are considered corporate secrets, local companies
have not disclosed whether they have been hurt by Intellectual Ventures or
similar companies," he said. "But there have been unofficial reports that Samsung
Electronics and LG Electronics may have to deal with possible intellectual
property disputes in the future."
Under the plan, KIPO will allocate 20 billion won this year to lay the foundation
for a local intellectual property management company jointly run by the
government and private sector.
The company, projected to be launched in 2011, will be tasked with buying up
rights to ideas and securing patents and corporate licenses that can facilitate
commercialization and the production of value-added goods.
In the long run, the company may move to acquire foreign patents and intellectual
property rights, KIPO said.
The office is also pushing to streamline the legal process of handling patent
disputes, which have seen an increase in recent years. In 2003 there were just
9,445 legal disputes involving intellectual property rights, but the comparable
figure reached 19,537 in 2007.
Patent related cases are currently handled by district courts, but because the
judges are not specialists, deliberation can take a considerable amount of time.
South Korea ranked fourth in the world last year in terms of patents issued, and
has the ninth-largest intellectual property market, but its ability to protect
creative rights ranked 37th, according to KIPO.
The country also suffered from a $2.9 billion trade deficit in intellectual
property market in 2007, despite having spent 31.3 trillion won on research and
development.
"If all the plans are carried out, the government hopes to expand the country's
intellectual property market to rank fifth in the world from ninth at present,
while helping to add 7 trillion won to gross domestic product in 2012," Kim said.

He added that South Korea's ability to protect intellectual property rights is
expected to reach 15th place within the next five years, and that 580,000 new
jobs may be created as a result of better intellectual property rights
protection.
yonngong@yna.co.kr
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