Date: 07-26-2009
Source: The Korea Times

The increasingly competitive global economy has sparked an international patent war,
giving rise to the new business line of patent trading. Especially noteworthy in this regard are ``patent trolls," firms that neither invent technologies nor apply them to turning out products but acquire patents and trade them at an often very hefty margin.

Some U.S.-based patent trolls have just landed on Korea, either demanding eye-popping fees on the nation's largest business groups, including Samsung and LG on the one hand, while acquiring virtually sweeping away ― patents in their early stages from domestic scientists and researchers on the other.

The purpose of respecting patent rights is noble enough: to encourage people to invent and produce. Yet the latest sort of ``services industry" appears to bring more harm than good, as they could tax and exploit businesses engaged in sound production activities and even threaten the corporate survival of some smaller, cash-short companies.

Samsung and LG are reportedly engaged in a court battle with a U.S. patent troll, instead of paying the huge amount which are usually set at levels slightly less than the litigation cost. This should be necessary to set a proper precedent not only for similar cases in the future but also for smaller domestic firms.

But, armed with billions of dollars of funds, some patent trolls prove to be too big to be handled on corporate levels, which is why the government should hurry to come up with legislation regulating their activities, including the amounts they demand on various pretexts.

On the other hand, the brisk maneuvering of foreign patent merchants here is a timely reminder of the weakness of the domestic patent-related administration, in which both the government and businesses pay insufficient attention to the accomplishments of academics and other inventors, forcing them to turn toward foreigners.

This must be addressed as soon as possible, as the exorbitant demands for patent fees could erode the nation's growth engine by discouraging the business mindsets, which is also why most foreign governments are examining various measures to restrict the patent trolls' activities, including the compulsory termination of old patents.

Korea, which set up a patent court even ahead of Japan in 1998, has failed to come up with follow-up legislation due mainly to a turf battle among competing agencies. Japan, in contrast, has successfully operated an industrial innovation agency to effectively handle the patent-related problems, which should serve as a benchmark for Korean officials.

Not only the government but the National Assembly should awaken to this new task, although it remains a question whether these officials, appointed or elected, would find the time to do so while indulging in media reform bills and other political battles.