IP value creation helps country advance global innovation

By Jake Schindler

A contingent from Sisvel recently spent the week in Seoul visiting clients and partners and attending IPBC Korea, where we were a gold sponsor.

South Korea has long punched above its weight when it comes to innovation, standards contribution and patent activity. It is the smallest jurisdiction represented among the “IP Five” patent granting authorities (alongside USPTO, CNIPA, EPO and JPO), and is likewise a peer of much larger economies like the US and China when it comes to wireless and multimedia innovation.

According to WIPO, South Korea ranks #1 globally in patent applications per million inhabitants, as well as in patent applications relative to GDP.

I have attended a number of IPBC Korea events dating back to the first one in 2016. At the time, there was much discussion of whether these impressive patent output numbers were generating an appropriate level of commercial value throughout the economy.

Two specific issues were often raised: first, whether Korea’s largest companies would become more proactive with their massive portfolios; and second, whether patents could help medium and smaller players play a bigger role in the tech ecosystem.

Turning the ship around

There is no doubt that large Korean patent owners are becoming more active in value creation. This has taken many forms, including the creation of new bilateral out-licensing programmes as well as patent sales. One that is worth highlighting is a willingness to participate in pools as licensors.

To name a couple of examples, Samsung Electronics is a licensor in Sisvel’s DVB-T2 pool (a recent Sisvel Insights post has more detail on how that came about), while LG Electronics joined the Sisvel Cellular IoT programme as a patent owner just last year. Two of the country’s major network carriers, SK Telecom and KT Corp, also participate in Sisvel patent pools.

Delivering the keynote at IPBC Korea, Hyundai Motor IP vice president SeungHyun Youn stated that engineering a portfolio shift in a large company happens on the scale of decades, not years. Korean companies own some of the world’s largest patent portfolios, so executing a strategic turn is like manoeuvring a large ship around. Once pointed in the right direction, however, there is significant horsepower behind it. Hyundai Motor’s vision involves a growing focus on green tech, but it has also made impressive headway in SEPs – ranking among the top 50 patent holders in a recent qualitative ranking of 5G portfolios.

SME power

On the other hand, it’s equally apparent that patent and licensing-based business models have enabled small and medium-sized Korean entities to participate on an even playing field and drive innovation.

Like the strategic shift among larger companies, this trend has been a long time in the making. A few early success stories with patent licensing provided a proof of concept, paving the way for a variety of universities, private labs, start-ups and investment funds to adopt IP-based business models.

Wilus, founded in 2012, is a prime example of how these strategies have enabled Korean SMEs to become global technology leaders. The company has been recognised by the Korean government as the country’s top SME patent filer. The innovations embodied by its portfolio stem from more than 700 technical contributions it has made to cellular, Wi-Fi and video coding standards.

The team of 20 engineers and inventors behind Wilus have built an impressive track record and they have done it independently of the big corporates and state-run labs. This is exactly the kind of grassroots innovation that policymakers have been seeking to encourage.

Monetisation mindset

Hand-in-hand with the emergence of these success stories has been an across-the-board shift in attitudes towards patent monetisation. There is a growing recognition that contribution to global standards is important work that is worthy of compensation. A recent Carnegie Endowment report points out that South Korea’s approach to standards has shifted over the years from a government-led effort to protect home markets to a private-sector initiative that emphasises profiting from international leadership.

KS Im, the CEO of monetisation firm IdeaHub noted at IPBC Korea that there is still some way to go in changing corporate attitudes on patent enforcement. IdeaHub currently licenses the portfolio of Pantech, which was a leading Korean mobile phone brand in the early 2000s. That this iconic IP asset has remained under Korean ownership is a testament to the significant monetisation expertise that has been built up over the years in this market.

Pool partnerships

The dynamism of the Korean IP ecosystem is demonstrated by the diversity of organisations that participate in Sisvel patent pools as licensors. Universities (KAIST, Sejong University), public-sector research institutes (ETRI), private labs (Wilus), investment funds (Intellectual Discovery), monetisation platforms (Ideahub), state-owned companies (Korean Broadcasting System) and private-sector corporations (KT Corporation, LG Electronics, Samsung Electronics, SK Planet, SK Telecom) are all represented and play an important role in programmes.

During a panel discussion at last week’s event, I had the opportunity to ask IP leaders including Wilus CEO Jin Sam Kwak and Intellectual Discovery executive director Dongsuk Bae what they look for in a pool administrator when they are evaluating whether to join a given programme. Three of the key points were market reputation, the ability to obtain a critical mass of patents and the capacity to bring both sides together to achieve good deal flow.

IPBC Korea panel (from left: Ting-Mao Chao, Dolby; Dongsuk Bae, Intellectual Discovery; Peter Moller, Access Advance; Richard Bemben, Sterne Kessler; Jin Sam Kwak, Wilus; Jake Schindler, Sisvel)

These themes of trust, efficiency and balance are central to what Sisvel does. We are proud of the support we have been able to secure in South Korea, and we look forward to helping our partners there drive innovation even further.

Jake Schindler is Sisvel’s Senior Content & Communications Manager

This article was prepared by him in a personal capacity. The opinions expressed within it are the author’s own and do not necessarily reflect the views of Sisvel. The content is for informational purposes and should not be taken as legal advice.