[IP in Korea] ‘Koreas’ market opening must accompany protection of industrial property rights’

The Korea Herald is publishing a series of interviews on experts in the intellectual property sector. This is the 15th installment. -- Ed.

Amid the recent conciliatory mood on the Korean Peninsula, the unthinkable just a couple of months ago -- for instance, forming an integrated market system in the future -- has become a probability as what optimists view as phase zero step for inter-Korean reunification.

Seizing upon this opportunity of potential market expansion, South Korea should take pre-emptive measures to narrow the legislation gap concerning the protection of industrial property rights such as patents, trademarks and industrial designs, according to an intellectual property expert.

“If things continue to work out well between the Koreas, we may at a certain point face a single larger market with over 80 million in population,” Lee Seung-yong, vice president of the Korea Patent Attorneys Association and senior patent attorney at Lee, Mock & Partners, told The Korea Herald in an interview.

“It will be a vital mistake if South Korea inadvertently let this rare momentum slip by, despite the ethnic and linguistic homogeneity it shares with the North.”

Responding to the lightened ambience concerning Pyongyang, the KPAA recently established a special committee on the inter-Korean exchange of intellectual property and unification-related study under Lee’s chairmanship.

“In order to promote economic cooperation, which is an essential element in inter-Korea relations, one of the top priority tasks is to build a reliable protection system for patents, trademarks, and design rights that are attached to products and services to be sold in the market,” Lee said.

These “industrial property rights” require more thorough and proactive legislative measures than copyrights that offer automatic protection to creators regardless of registration, he explained.

“As industrial property rights are granted only to primary applicants, South Korean business entities may lose ground in the North Korean market, should competitors preoccupy these rights in the North,“ he said.

“In the worst scenario, South Korea could be kept off the lucrative, underdeveloped North Korean market despite its global initiative in intellectual property and geographic proximity (to the North), let alone the historic and emotional bond between the two Koreas.”

Given the unique circumstances of the Korean Peninsula, it will nevertheless be possible for Seoul and Pyongyang to establish a special economic relationship without integrating the entire market system, just as in the case of China and Hong Kong, according to Lee.

“The China-Hong Kong model could be considered as a compromising alternative, in case the inter-Korean dialogue faces struggles,” he said.

“In any case, South Korea will be able to freely trade goods that are produced in special designated zones such as the Kaesong Industrial Complex, but this limited range of economic partnership will be no match for the huge potential profits to be made under a unified market system.”

The National Assembly Budget Office claimed in a recent report that North Korea is likely to achieve around 9 percent in annual growth in the upcoming years, on the back of eased tensions and active trade with the outside world.

”While mutual recognition of each other‘s incumbent legal system could be of help in the initial stage of communications, this could also result in the partitioning of the potential common market,“ he claimed.

“This is why it is advisable to focus on integrating the two Koreas’ market, despite persisting challenges.”

In the light of the swift changes concerning peninsular affairs, it is the mid-term goal of the KPAA’s special committee to draft a comprehensive legislation for patents, trademarks and design rights for both Koreas within two or three years, the chairman explained.

“It is true that the issue of inter-Korean IP cooperation has received little attention over past years, but when a new market is about to open, patent attorneys are the first ones to instinctively detect the economic importance of intangible business assets,” Lee said.

As an initial step, he suggested the standardization the legal terminology in the related laws.

“Though both share the same language and history, they often display differences in detailed legal terms, with the South being affected by Japan and Western countries and the North holding on to more traditional expressions.”

In some cases, Seoul may consider tuning its rules to the North Korean norms, the expert added.

“South Korea generally offers more advanced protection for IP right owners than the communist North which is more susceptible to state intervention in market transactions,” he said.

“But when it comes to the preparation period for using a registered mark, for instance, North Korea provides with five-years just like in the United States and most European countries, while the South only recognized three-years from the date of registration.”

The inter-Korean IP cooperation, in this case, could act as an opportunity for South Korea to better align itself with global norm, according to Lee.

By Bae Hyun-jung (tellme@heraldcorp.com)