X9. Intellectual property overview
1. Types of Intellectual Property Rights
Traditionally, intellectual property rights were divided into industrial property rights and copyrights, but in the 3rd and 4th industrial revolutions, a separate item called new intellectual property rights emerged.
2. What are industrial property rights?
1) Patent right: A patent right is a right granted to an invention. In Article 2, Paragraph 1 of the Patent Act, an invention is defined as “a high-level invention resulting from the creation of technical experts using the laws of nature”. The patent right period is recognized from the date of filing the patent application for 20 years.
2) Utility model right: A utility model right is a right given to a small invention related to the structure, shape, and combination of an object. In the case of a utility model, the right to protection begins when the registration fee is submitted, and the duration is 10 years from the filing date of the utility model.
3) Design right: Design right is literally the right to protect the idea of the appearance and appearance of an object by law. The duration is 15 years from the date the registration fee is paid.
4) Trademark right: The composition of trademark rights refers to symbols, figures, shapes, characters, holograms, colors, motions, or combinations thereof that distinguish the item in contrast with other products. As with design rights, trademark rights are protected for 10 years from that date, but the duration can be renewed every 10 years.
3. What is copyright?
Copyright is the right to protect and promote the exclusive right when human intellectual ability is exercised in the fields of art and literature such as art, music, poetry, and fiction.
Copyright is divided into moral rights and author's property rights. Moral rights protect the personal rights of authors with exclusive rights such as publication rights, identity maintenance rights, and name display rights. Author’s property right is divided into reproduction right, transmission right, distribution right, exhibition right, and performance rights to protect economic interests from the use of copyrighted works.
4. What is new intellectual property rights?
New intellectual property rights those that are newly recognized in line with the development of society.
1) Computer software: Although program duplication is protected by the Copyright Act, the software can be protected by the Patent Act when the novelty and inventive step of the features of each software is considerable.
2) Semiconductor circuit design rights: Developed countries first recognized patents for semiconductor circuit design, and Korea also enacted and implemented the integrated circuit design law in 1993.
3) Sales method (business model): The development of the Internet led to the development of the e-commerce market. Accordingly, the United States Patent High Court, ruled that the fund's investment management system was recognized as a patent. As a result, the so-called business model has been recognized as a patent worldwide.
4) Biotechnology invention: In 1980, the U.S. Supreme Court ruled in Diamond v. Chakrabarty case that the patent right for microorganisms capable of decomposing crude oil was recognized, and at this time, it was announced that everything made by humans can be patented. As a result, various patents, including genetic engineering technologies, microorganisms, and animals, which were previously excluded from patents due to ethical issues, have been recognized as patents.
5) Know-how: Rather than publicizing the invention and obtaining a patent in return, it is possible to obtain economic benefits by protecting the invention as an undisclosed trade secret.
5. Overview of Patent Disputes
A patent right is a system that allows inventors to exercise exclusive rights to inventions in general. In the 2000s, patent disputes have intensified to such an extent that non-property entities (NPEs), which do not manufacture inventions and generate profits through patent license agreements and litigation, achieve rapid growth. As such, as patents are regarded as independent business areas, it is clear that competition among global companies is increasingly turning into patent disputes.
1) LED Patent Dispute: A light-emitting diode, that is, an LED, refers to a semiconductor device that emits light by passing an electric current. It is expected that the LED market will dominate the global lighting market, and thus patent disputes among related companies will also increase. Therefore, the patent competition between leading companies such as Nichia, OSRAM, Philips, and Hewlett-Packard and latecomers such as Seoul Semiconductor, LG Innotek, LG Electronics, and Samsung Electronics is on fire. In 2011, Seoul Semiconductor was in the process of litigation for patent infringement with Philips in Germany, the United States, and Korea. LG Electronics and LG Innotek and OSRAM were also in patent litigation in Germany, the US and Korea. In the case of LED, it is not easy to make a significant blow to competitors through patent litigation. Nevertheless, it can be seen that the leading companies, which have most of the original technology patents, have a hidden intention to block the entry of latecomers into the market by dominating the patent war like this.
2) Smartphone Patent Dispute: Consumers choose their favorite smartphone and enjoy the services and contents provided there. Therefore, global IT companies are risking their lives in various patent disputes to preoccupy an advantageous position in the smartphone market. The smartphone patent war has now been summarized as a confrontation between Android, represented by Samsung Electronics, and iOS, represented by Apple. Microsoft, Apple, and a Research Emotion consortium have acquired more than 6,000 wireless communication-related patents from Nortel, a solid Canadian telecommunications company, in various ways, putting pressure on manufacturers such as Samsung and HTC, which have chosen Google's Android as their operating system. Apple's strategy is expected to be quite effective and damage its competitors as smartphone lifecycle is short. In addition, Apple attacked Samsung and HTC, which chose Android as its operating system, rather than Google, the inventor of Android. In response, Google sells some of its patents to HTC, helping HTC gain an edge in the patent race with Apple.
As such, it is expected that the royalties to be paid by smartphone manufacturers will gradually increase due to the heated patent disputes. As a result, it is expected that it will be difficult for small and medium-sized companies to participate in the market as patent costs can be a huge burden. In addition, an increase in royalty costs will naturally lead to an increase in the price of smartphones. As such, patent disputes have a huge impact on the overall structure of an industry.
6. US patent law amendment
In September 2011, President Obama's signature in the patent market brought major changes to the patent market, including prioritizing first-to-file principle over first-to-invent principle.
1) First-to-invent principle
First-to-invent principle is a system that grants a patent right to the first person who invents an idea regardless of whether a patent has been filed or not, and has the characteristics of a system to protect the first inventor.
2) First-to-file principle
Most countries adopt the first-to-file system, which gives priority to the person who files an invention first.
3) Main contents of the amended US Patent Act
The amendment to the US Patent Act adopts the first-to-file principle instead of the first-to-invent principle. Procedures for determining whether patent applicants are entitled to protection are provided. In addition, in order to reduce the cost burden of filing patent applications for individuals or small and medium-sized enterprises (SMEs), a new regulation has been established that allows for a 75% reduction in fees for patent applications made by micro entities. Also, a priority examination system was introduced to expedite patent examination, and the Intellectual Property Office set patent fees on its own without the supervision of the Parliament, and the profits were used to significantly increase the number of patent examiners, thereby laying the groundwork for shortening the patent examination time.
4) Effect of US Patent Law Amendment
This amendment reduces for individuals and SMEs the risk of patents being stolen by other inventors or entrepreneurs. And, this reform is important in that the criteria for granting patents are globally unified. This is expected to accelerate the trend of globalization of technology by reducing the effort required to prepare patent applications for the global market.
7. Types of NPE (Non-Practicing Entity)
1) Non-manufacturing holding company: A True Blue Troll such as Intellectual Ventures, Acacia Research, and Rembrandt IP Management, which refers to a non-manufacturing patent management company that acquires patents from inventors.
2) Research-oriented universities: As a Thinking Person's Troll, research-oriented universities and research institutes develop patents for the purpose of exercising rights such as licenses rather than product production and sales.
3) Companies that have patent assets but have failed as manufacturing companies
4) Companies seeking to obtain patents for the purpose of litigation against competitors
8. Characteristics of NPE patent litigation
Patent litigation between manufacturers and competitors in general is concluded at the line of sharing patent technology. However, in the case of NPE, they do not own a patent for the purpose of manufacturing, nor do they want to have a patented technology of another company. Therefore, if patents of NPEs are infringed, the manufacturers have no choice but to acknowledging their infringement against NPEs.
9. What is a patent pool?
A patent pool is an agreement between multiple patent rights holders, and it is easy to think of it as a collection of individual patents. From the point of view of the patent right user, the right to use all the patents in the patent pool is acquired through a single collective contract instead of individual licensing.
10. Patent pool and standardization
In the field of information and communication technology where technology compatibility is required, the need for technology standardization such as protocol standardization is increasing.
While standardization promotes technology sharing, patents grant exclusive rights to a technology, so the patent system and standardization often contradict each other. Most standardization organizations such as the International Telecommunication Union (ITU) and the International Organization for Standardization (ISO) recognize the standardization of patents.
11. FRAND (Fair, reasonable, and non-discriminatory)
FRAND is a reasonable, fair and non-discriminatory practice of intellectual property rights. It refers to the agreement that a third party should consult fairly and reasonably so that the patent can be used by the third party. Standardization organizations such as the ITU prohibit patent holders from gaining huge commercial profits through the FRAND protocol. In a standard patent lawsuit filed by Samsung Electronics against Apple recently, Apple used the FRAND protocol to refute Samsung's claims.
The standardization institutes set in advance the maximum royalty and maximum limit conditions for patent rights in the process of standardization of a technology. This limits potential future FRAND violations by patent holders. The patent applicant will have to evaluate the profit and loss of both sides carefully in advance when participating in the standardization process of his/her technology.
12. Recent Trends on Standardization
The importance of standard patents is increasing in fields with high standardization requirements, such as networks, video equipment, and communications. In addition, new legal issues such as the antitrust law were raised as the standard patent holders controlled the person who issued the standard patent, resulting in an imbalance. As a result, countries such as the United States, Korea, Europe, and Japan recommend and stipulate that standardization organizations, patent pools, and standard patent owners do not control the market through monopoly.