Assemblyman Shin Jeong-hoon: Government's utilization rate of nationalized patents acquired with compensation only 22.7%

Import incidence rate also plummeted vertically from 52.9% in 2014 to 1.6% in 2020

Regulatory improvements hindering high-quality patent creation and commercialization, need to manage the quality of held patents

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] It has been revealed that the majority of state-owned patents inherited with compensation are practically "patents kept in drawers."

According to data submitted by the Korea Intellectual Property Office to Shin Jeong-hoon, a member of the National Assembly’s Industry Committee from the Democratic Party (Naju Hwasun), as of July 2020, the utilization rate of all 7,875 state-owned patents was only 22.7%.

By registration count, there were 4,229 in agriculture and livestock, 2,105 in others (including the Ministry of Food and Drug Safety, Cultural Heritage Administration, Army, etc.), 599 in forestry, and 593 in fisheries. The utilization rates were 32.1% for agriculture and livestock, 23.3% for fisheries, 19.4% for forestry, 11.4% for environment, and only 5% for meteorology.

State-owned patent rights are rights registered as patents, utility models, or designs filed under the country's name based on inventions made by national public officials in the course of their duties. The state inherits these inventions as state-owned patent rights and pays compensation to the inventors. The purpose is to promote commercialization by transferring excellent state-owned patents with outstanding technical and business potential to the private sector either free of charge or at a low usage fee, and to encourage the creation and utilization of excellent state-owned patent rights through fair compensation and enhanced promotion of public officials’ inventions.

The Korea Intellectual Property Office pays inventors a registration compensation of 500,000 KRW for patents, 300,000 KRW for utility models, and 200,000 KRW for designs for each right registered under state succession according to the “Regulations on the Disposal, Management, and Compensation of Public Officials’ Inventions.”

Additionally, when disposing of state-owned patent rights or inventions under patent application for a fee, up to 50% of the proceeds from the disposal are paid to the inventors.

However, from 2014 to July this year, the income from usage fees was only 4.99 billion KRW, which is not significantly different from the 4.762 billion KRW paid as compensation for public officials’ inventions.

Furthermore, the Korea Intellectual Property Office has implemented a post-settlement system where usage fees are not prepaid but paid after the contract period expires, to reduce the initial cost burden on companies and promote the use of state-owned patents.

While this user-centered state-owned patent rights settlement system has a positive intent, on the other hand, it may reduce the willingness to commercialize state-owned patents and decrease the motivation for technology transfer because usage fees and inventor compensation are paid after contract expiration.

Analysis of the annual post-settlement contract expiration cases and income generation status showed a sharp decline in income generation rates: 52.9% in 2014, 38% in 2015, 36% in 2016, 32.2% in 2017, 30.3% in 2018, 8.3% in 2019, and only 1.6% this year.

Assemblyman Shin Jeong-hoon stated, “Measures are needed to improve the utilization rate of state-owned patents inherited with various compensations paid to public officials,” and added, “We should encourage the creation of high-quality patents, activate exclusive licensing that allows exclusive use of rights such as patents, and improve regulations that hinder commercialization.”

In particular, he proposed as an alternative, “State-owned patents that have been unused for a long time and are practically impossible to commercialize due to being outdated in terms of era and technology should be managed qualitatively by promoting their sale or abandonment.”

This content was produced with the assistance of AI translation services.