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Most South Korean Patents Lack Internationality
Overseas Patent Application Entails High Costs
Most South Korean Patents Lack Internationality
  • By Jung Suk-yee
  • June 5, 2019, 08:30
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Korean companies' overseas patent application ratio remains slightly over 10 percent. 

The number of new patent applications in South Korea, which had been 141,116 in 2011, continued to rise and reached 161,698 in 2015. However, the overseas patent application ratio remained slightly over 10 percent during the same period. Specifically, it was 10.4 percent in 2011, 12.2 percent in 2014, and 11.7 percent in 2015.

The ratio was as low as 3.8 percent in 2011 and 4.3 percent in 2015 when it comes to small and medium-sized enterprises (SMEs). In 2015, South Korean SMEs applied for 44,258 domestic patents while large South Korean companies applied for 35,893 domestic patents. As for the number of overseas patent applications, however, the latter reached 13,216 while the former stood at 1,900. In the former group, those doing business alone showed an even worse performance whereas those working with large corporations applied for more patents abroad in cooperation with their partners to reduce the possibility of patent disputes.

The overseas patent application ratio of public institutions and enterprises remained below 5 percent on average, too. The ratio of research institutes was 12.3 percent in 2015, yet the number of their overseas patent applications fell from 1,480 to 929 from 2012 to 2015.

In 2017, South Korea came in last, with 5.6 percent, among the top five countries in terms of international patent application when it comes to the ratio of patent applications in the United States and the seven major emerging economies including India and Vietnam. The United States posted 16.6 percent to come in first and outdid South Korea by a factor of about 10 in number. South Korea has concentrated on overseas patent application in the United States and still has a far way to go as to application diversification. Its ratio of application in the United States amounted to 52.9 percent in 2017, the highest among the top four countries other than the United States.

In addition, the United States and Japan overwhelmed South Korea in terms of 2010-2017 applications in the Philippines, Vietnam, Malaysia, Singapore, Indonesia, and Thailand, the largest manufacturing country in the ASEAN region. In Thailand, Japan and South Korea applied for 3,371 and 176 patents in 2017, respectively. In Indonesia, the biggest market in the region, South Korea applied for 386 patents that year while Japan’s and the United States’ respective figures amounted to 2,407 and 1,579.

South Korea used to outperform China in the six ASEAN countries. However, China outstripped South Korea in four in 2017 and is now about to overtake it in the Philippines and Vietnam as well. The number of China’s patents in Vietnam jumped 108 percent from 257 to 535 from 2015 to 2017 whereas that of South Korea’s in the same country rose 32 percent from 527 to 697 during the same period.

South Korean companies cannot be entirely blamed for the situation in that overseas patent application entails high costs and difficulties related to translation. “The process costs approximately 12 million won on average and that amount of money for that purpose is quite burdensome for young firms,” said the CEO of a local startup.

Nonetheless, patent disputes are currently affecting more and more companies to the point of determining their fates. New scientific techniques and technologies are soaring in number with Industry 4.0 around the corner, and the number of such disputes is likely to skyrocket over time. The recent patent litigation between Apple and Qualcomm had a size of no less than 30 trillion won.