1

September 13, 2007

Dr. Taemin EOM

Korean Intellectual Property Office (KIPO)

KIPO’s Policy for Supporting the Use of Intellectual Property Assets

- Focus on Government-owned Inventions -

2

3

I. Current Status of Government-owned Inventions (GOIs) in Korea

11-1-1. Definition. Definition 11-1-1. Definition. Definition

Where a public official applies to register an employee invention under the

name of the State or a local government, the right belongs to the State or

the local government.

Where a public official applies to register an employee invention under the

name of the State or a local government, the right belongs to the State or

the local government.

Invention of a public official

※ A public official is any government employee who falls within the definition of

Article 2 of the Public Officials Act.

(Under the article 9(1) of the Technology Transfer Promotion Act teachers and

staff

of a State or public school must file an application under the name of the

technology licensing organization of the school) The activity that led to the invention falls within the scope of the employee’s present or past duties.

4

11-2-2. Legal grounds for GOIs. Legal grounds for GOIs11-2-2. Legal grounds for GOIs. Legal grounds for GOIs

Legal grounds Invention Promotion Act, Articles 10 and 15

Regulation on the disposal, management and remuneration of a GOI

Patent Act, Article 83(1)

Invention Promotion Act, Article 10(4)

Notwithstanding Article 6 of the National Property Act, the disposal and

management of an invention that has reverted to the State under paragraph (2) is

governed by the Commissioner of the Korean Intellectual Property Office.

※ National Property Act, Article 6

The Minister of Finance and Economy presides over the management of the

national property that is governed by each ministry to which the property pertains.

5

Exemption of feesExemption of fees

Application fees

Examination request fees

Registration fees

Other official fees

The Commissioner of KIPO shall grant an exemption from the payment of patent

fees or official fees in the following cases: (i) official fees or patent fees that

correspond to patent applications or patent rights belonging to the State.

※ Patent Act, Article 83(1)※ Patent Act, Article 83(1)

6

1-3. Remuneration1-3. Remuneration

ClassificationClassification Remuneration for registration: patents US$500, utility models US$300, industrial

designs US$200

Remuneration for a transfer or licensing: 50% of the revenue (since January 1,

2005)

Remuneration for organization: for transfers or licensing arrangements that

generate

revenue in excess of US$10,000 (remuneration in the range of $1000 to $10,000) Time: one year after the registration, transfer or licensing

Joint invention (of two or more inventors): remuneration based on the individual

share

of each inventor

Retirement or death of an inventor: remuneration is required if an invention was

made

when the inventor was a public official; remuneration is required for a successor in

title if the inventor dies.

FormalitiesFormalities

7

expected gross sales of products per year

net cost of producing a product per year

portion of the production cost attributed to GOIs per product

3% : may varies between 2% and 4% on the basis of the value and industrial

applicability of GOIs

※ Calculation of royalties = expected sales × cost × portion of production cost

attributed to GOIs × 3%

8

1-4. Ownership (as of May 2007)1-4. Ownership (as of May 2007)

Number of GOIsNumber of GOIs

0

200

400

600

800

1000

1200

1400

1600

1800

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07.5

Year

Rights

※ Transferred or expired rights omitted※ Transferred or expired rights omitted

9

   Rights   Rights TotalTotal

Rural Dev.

Admin.

Rural Dev.

Admin.

Fisheries Research & Dev. Institute

Fisheries Research & Dev. Institute

Forest Researc

h Institute

Forest Researc

h Institute

Agency for

Technology &

Standards

Agency for

Technology &

Standards

Veterinary Research

& Quarantine Service

Veterinary Research

& Quarantine Service

OtherOther

TotalTotal 1,6541,654 900900 119119 111111 8080 6767 377377

PatentsPatents 1,2081,208 617617 9696 7979 6868 6464 284284

Utility modelsUtility models 297297 205205 2222 1818 -- 33 4949

Industrial designs

Industrial designs 111111 5858 11 77 11 -- 4444

Int’l patentsInt’l patents 3838 2020 -- 77 1111 -- --

Number of GOIs for each type of right and invention-related organizationsNumber of GOIs for each type of right and invention-related organizations

10

II. Application and Registration Process

22-1-1. Applications and registrations in Korea. Applications and registrations in Korea 22-1-1. Applications and registrations in Korea. Applications and registrations in Korea

InventorInvention-related

organizationKIPO

Application & Exam. Team

KIPORegistration Team

KIPOInvention Promotion Team

① Employee

inventions

② Govt decision to be a successor of an invention

③ Applications under the name of the govt

④ Decision of registration

⑤ Req

uest fo

r re

gis

tratio

n o

f G

OIs

⑧ Notifi

catio

n o

f the

resu

lts o

f the re

qu

est

an

d th

e re

mu

nera

tion

p

rocess

⑥ Request for registration under the

name of the govt

⑦ Notification of the results of the request

Documents

1. Request for registration: Check inventors

2. A photocopy of decision of registration

3. Verification of the employee invention

4. Request for management and remuneration:

• Check individual share among inventors

• Bank account of inventors

Inventions owned exclusively by the govt

11

Inventorpublic official Invention-related

organization

KIPOApplication & Exam. Team

KIPOInvention Promotion Team

KIPORegistration Team

① Employee invention

Inventorprivate sector

⑤ Registered after

payment of registration

fees

⑥ Request for m

anagement

and remuneration for GOIs

⑦ Request for registration of

GOIs

Joint ownership with the private sector (with right to succeed only to the govt share)Joint ownership with the private sector (with right to succeed only to the govt share)

② Govt decision to be a

successor to an invention

④ Decision of registration

③ Joint application under the name of the govt and the

private sector

12

Request for registration

Decision of registration or certificate of registration

Invention-related organizations’ opinion on employee inventions

Contract on joint applications and utilization of GOIs

Conditions for remuneration

Check inventors

Check joint owners

Verify employee inventions

Check condition on individual share and use

Check individual share of each inventors

Documents for GOIs jointly owned with the private sector Documents for GOIs jointly owned with the private sector

※ Draw up a contract on joint applications and utilization of inventions※ Draw up a contract on joint applications and utilization of inventions

13

Right holders Inventors Comment

GovernmentPrivate sector

(non-govt employees)

Govt employeesNon-govt

employees

○ ○

○ ○

○ ○ ○

○ ○ ○ ○

○ ○ ○

○ ○ ○

Examples of right holders and inventorsExamples of right holders and inventors

※ Rights of inventors (Patent Act, Article 33): An inventor is entitled to obtain a patent and to

be described as an inventor in the patent registration certificate.

※ The addition or deletion of inventors can be made before the final decision on the grant of

a patent registration (Regulation on Patent Implementation, Article 27)

14

(1) A patent right may be assigned.

(2) Where a patent right is jointly owned, the owners may not assign or pledge

their individual share without the consent of the other owners.

(3) Where a patent right is jointly owned, and unless otherwise agreed in a

contract of the owners, an owner may individually work the patented invention

without the consent of the other owners.

(4) Where a patent right is jointly owned, an owner may not grant an exclusive

license or a nonexclusive license of the patent right without the consent of the

other owners.

Patent Act, Article 99 (Assignment and joint ownership of a patent right )Patent Act, Article 99 (Assignment and joint ownership of a patent right )

15

★ ★ Points to be considered for joint researchPoints to be considered for joint research★ ★ Points to be considered for joint researchPoints to be considered for joint research

Verification of individual share (e.g. State: 70%; private sector: 30%)※ Regulation on Patent Implementation, Article 27

Inclusion of conditions on the individual work of invention prior consent of other inventors (esp. the work of a third party as requested by the State) payment of royalties based on each inventor’s share

e.g. royalties = individual share × expected sales × net cost × portion of production cost attributed to GOIs × 3%

Inclusion of conditions and requirements on the payment of fees based on the individual share e.g. if fees are not paid in accordance with the requirements, the right is deemed to be abandoned (for inventions exclusively owned by the govt)

Inclusion of conditions on each inventor’s burden of costs for a lawsuit

Inclusion of the reversion of rights due to subsequent research and inventions verification of the individual share of rights due to the contribution of subsequent research to the primary invention

16

22-2-2. Applications and registrations overseas. Applications and registrations overseas 22-2-2. Applications and registrations overseas. Applications and registrations overseas

Inventor Invention-related organizations

Foreign IP offices

KIPOInvention Promotion Team

② Govt decision to be a

successor to an invention

④ Decision of registration

⑥ R

equest fo

r managem

ent

and re

munera

tion fo

r GO

Is

17

Process of requesting payment of fees overseasProcess of requesting payment of fees overseas

Attorney

(Non-Korean)Attorney

(Korean)

Foreign IP office

KIPOInvention Promotion Team

① Notification of deadline for

payment of fees

⑤ Order of payment and remittance

expenses

② Inquiry opinion whether maintain

rights

⑦ Req

uest fo

r re

mu

nera

tion

of th

e

paym

en

t

Invention-related organization

③ R

eque

st fo

r pay

men

t of

fees

(att

achm

ent o

f an

appra

isal

of in

vent

ion)

④ Ord

er fo

r th

e p

aym

en

t of fe

es

⑧ Rem

un

era

tion

of

fees

⑥ Payment of fees

18

III. Utilization of GOIs

33-1-1. Overview. Overview 33-1-1. Overview. Overview

Nonexclusive license

Free nonexclusive license(royalty-free usage)

Exclusive license or sale

Method Limited tender

contractLimited tender contract Open tender contract

Period Three years One year (up to two years) Three years

Conditions General rule

Cases such as the promotion of

the income of farmers and

fishermen and the boosting of

exports where necessary for

the good of the public

Failure to finalize a

nonexclusive license or

cases acknowledged by

the KIPO Commissioner※ The licensing period (of three years) can be extended in the following cases:

where the preparatory work for the use of the invention takes more than one year

where the term of the right expires within four years of the date the license takes effect

19

33-2-2. Utilization after registration. Utilization after registration 33-2-2. Utilization after registration. Utilization after registration

Inventions owned exclusively by the govtInventions owned exclusively by the govt

LicenseeKIPO

Invention Promotion TeamInvention-related

organization

① Request for a license

④ Notification of the opinion of invention-

related organizations

② Request for an opinion on the license

③ Notification of the opinion on the terms

of the license⑤ The signing of a contract

⑥ Notification of the date the license and

remuneration process take effect

※ Documents to be filed when requesting a license:

- Request for a limited tender contract

- Calculation of royalties``

- Plan of operation: yearly production levels, sales volume and price, etc.

- A registered certificate of an entity

- A registered certificate of a seal

20

Joint ownership with the private sectorJoint ownership with the private sector

Licensee KIPOInvention Promotion Team

Invention-related organization

① Request for a license

License

Yes

N

o

② R

equest fo

r an

opin

ion o

n a

license

Jointinventor

Fail

②-1 Request for

consent

21

33-3-3. Utilization during the application phase. Utilization during the application phase 33-3-3. Utilization during the application phase. Utilization during the application phase

LicenseeInvention-related

organizationKIPO

Invention Promotion Team

① Request for license

③ Notify amount of royalties to KIPO and

request for remuneration

② Sign a contract

④ Notification of payment of royalties

③ Documents

- A photocopy of the contract

- Description of the invention filed with the application to KIPO

- Amount of royalties, etc.

- Request for remuneration

22

IV. Services for Boosting Commercialization

44-1-1. KIPO’s policy on commercialization. KIPO’s policy on commercialization 44-1-1. KIPO’s policy on commercialization. KIPO’s policy on commercialization

Direction

Provide customized support programs based on the commercialization capability and intent of

patentees

For patentees who are incapable of independent commercialization: Facilitation of the transfer of patented technology

• E.g. Universities and research institutes

For patentees who want to independently commercialize an invention: Provision of financial aid Support of expanding market places: exhibitions, cyber shopping malls

For fair and transparent support:

Establishment of an objective appraisal system

For fair and transparent support:

Establishment of an objective appraisal system

23

* 18 organizations (8 governmental authorities & 10 related agencies)

KIPO Rural Development Admin.

Forest Service

Technology Credit Guarantee Fund

Inst. of Industrial Tech Evaluation

Inst. of Science & Technology

Small Business Corporation

KIPA

Commercialization Council

Korea Technology Transfer Center

Agency for Tech & Standards

Univ. of Science & Technology

Korea Inst. of Design Promotion

Small Business Admin.

Korea Development Bank

Maritime & Fisheries Industry & Energy Agriculture & Forestry Science & Tech.

44-2-2. Organization Chart of the Commercialization . Organization Chart of the Commercialization CouncilCouncil 44-2-2. Organization Chart of the Commercialization . Organization Chart of the Commercialization CouncilCouncil

24

Collateral Support

Financial Support

Consultations &

Notifications

명세서 기재

CouncilCouncil

- Funds for R&D and acquisition of IP- Funds for IP valuation and transactions- Funds for launching new products- Funds for establishing enterprises- Funds for facilities and mass production

- Provision of IP information - Discounted application fees- Nurturing of IP experts - Authentication and guaranteeing of new technologies- Evaluation and marketing of new technologies- Guidance on managerial or technical problems- Advertising and marketing of new products

- Consultations on general aspects of commercialization

- Notification of the council’s support programs- www.kipa.org

Main services of the Commercialization Council

25

Commercialization Council

(working group)

Commercialization Council

(working group)

Support Organizations

(financial aid)

Support Organizations

(financial aid)

Monitoring

Support status

Application

Support & management

Supervision of collateral support

Entrustment of management

Satisfaction survey

Reporting of performance

Operation of the Commercialization Council

Management Authority

(KIPA)

Management Authority

(KIPA)

Applicant

for commercialization

Applicant

for commercialization

26

Income and expenses of managing GOIsIncome and expenses of managing GOIs

44-3-3. Status and measures on commercialization of . Status and measures on commercialization of GOIsGOIs 44-3-3. Status and measures on commercialization of . Status and measures on commercialization of GOIsGOIs

0

200

400

600

800

1000

1200

1400

1600

1800

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02. ‘03 ‘04 ‘05 ‘06 May'07

(Year)

(Rig

ht,

US$1

,000)

G.O.I.

Income

Remuneration

`

27

Overall utilization of GOIs lags behind the utilization of private sector inventionsOverall utilization of GOIs lags behind the utilization of private sector inventions

Portion of GOIs utilized: (2003) 9.0%, (2004) 9.3%, (2005) 10.6%, (2006) 12.2%,

Jan. to

May 2007: 13.0%

Portion of private sector inventions utilized: (2004)38.9%, (2005) 33.2%, (2006)

37.0%

※ Public research institutes: (2006) 15.7%; Universities: (2005) 12.8%Reason for non-use of GOIsReason for non-use of GOIs

Many inventions are academic and require additional research to be commercialized

(e.g. the method of extracting certain components from marine products)

※ The majority of GOIs pertain to the agricultural and fishery fields:

Rural Development Administration: 900 rights, 54%

National Fisheries Research and Development Institute: 119 rights, 7%

Forest Research Institute: 111 rights, 6.3%

Rights tend to be maintained until they expire even if GOIs are unused for a long time

※ GOIs are exempt from fees such as registration fees.

28

★ ★ Measures to boost commercializationMeasures to boost commercialization★ ★ Measures to boost commercializationMeasures to boost commercialization

Infrastructural improvements such as royalty-free usage

Remunerations for GOIs have increased from 30% to 50% of the revenue (since

2005).

A system of royalty-free use of GOIs was set up (in April 2006) for rights that have

been unused for more than three years.

※ Contracts were signed for six patents, including a wave-resisting apparatus

for the cultivation of fish in a closed net and a virus strain for preventing

respiratory diseases in pigs.

Computerized management and contract systems were set up for GOIs

A computerized management system was set up in November 2005.

An on-line contract system for GOIs was set up in October 2006.

29

Information services on the use of GOIs have been established. Information about the database and contracts of GOIs has been made available on the

KIPO Web site and on the IP Mart (www.ipmart.or.kr).

Training programs have been conducted for officials who work in invention-related

organizations.

Counselors at the IP Mart provide consultations and support with regard to GOI

transactions.

From June to August 2007, the KIBO Technology Fund appraised 100 GOIs that

had not been used for a long time. On the basis of the appraisal, low value GOIs will be terminated.

※ More than 21% of the appraised inventions were regarded as excellent inventions

and received recommendations to be licensed ASAP.

30

V. Further plans

Decide whether to change the current GOI management system. Option 1: Transfer the responsibility of managing and commercializing GOIs to an invention-r

elated organization.

Option 2: Assign the responsibility to commercialize GOIs to a professional agency.

* E.g. private technology licensing organizations (TLOs)

Option 3: Abolish or lower the fee exemption for GOIs

Promote information services on the use of GOIs through Naver

(www.naver.com) and the database of the National Technology Bank (www.ntb.com)

* Naver: A Korean Web portal similar to Google

Adopt a periodic appraisal system for GOIs Terminate low value inventions long before they expire.

31

Thank YouTaemin EOM, PhD. in Lawtmeom@kipo.go.kr