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A plan is carried forward to reduce costs for maintaining small/medium companies’ patents (News Letter No. 262)



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1. A plan is carried forward to reduce costs for maintaining small/medium companies’ patents

A plan for small/medium companies has being carried forward to reduce their patent maintenance costs (annuities) which sharply increase from the 4th annuity. This plan is to prevent small/medium companies from giving up their patents as a competition source due to temporary financial difficulties.

“The plan to reduce individuals’ and small/medium companies’ patent maintenance burden is being reviewed,” said a high-rank spokesperson of the Korean Intellectual Property Office (KIPO). According to this spokesperson, many small/medium companies give up their patents from the 4th year of patent registration. The 4th year would be considered as a time that it is difficult to maintain their patents. Therefore, if the burden is reduced, it is expected to be helpful in maintaining these patents.

From the 4th year of a registered patent, an individual or a company continues to give up the patent. Based on the patent status data as of the end of February, small/medium companies owned 60,271 patents for the 1st to 3rd years. However, the number of patents decreased to 37,544 patents for the 4th to 5th years or by about 40%.

The spokesperson said, “[T]he reduction of the annuities affects the financial integrity. KIPO has to review whether the reduction of the annuities is intended for all small/medium companies or just some of them.” KIPO will operate the plan to reduce the annuities for small/medium companies the second half of this year.

2. KIPO and the Korea Development Bank (KDB) have operated loans with intellectual property (IP) rights during March

- Small/medium companies and middle standing companies can get loans with only IP rights, such as patents, for their business funds.
- KIPO and KDB secure the financial soundness by jointly forming a collection support fund and a value evaluation model.
- The Commissioner of KIPO said, “[W]e are carrying forward this project with confidence in the values of Korean patents.”
- The President of KDB said, “[I]t is possible to realize the creative economy through the IP finance.”

Loans with IP rights have been provided from the end of March. Small/medium companies and middle standing companies can get loans (up to two billion Korea Won) with only IP rights such as patents, etc., without any material security.

KIPO and KDB concluded a business agreement on March 19 and agreed to a comprehensive agreement bill for the operation of loans with IP rights. This has fully operated a channel in which IP rights as the result of original ideas and innovations are directly connected to finance. Therefore, building an ecosystem for the development of scientific techniques and the realization of creative economy led by small/medium companies is expected to be accelerated.

As KIPO and KDB have provided the loans with IP rights, those companies’ patents, trademarks and designs which were not approved as security are considered as the same as real estate being material assets. A company can get a loan up to two billion Korea Won for business funds on security of an IP right (which has been actually commercialized and has generated sales) being evaluated as the amount of its value. The interest rate is also set at a similar level to an interest rate of a loan secured with real estate.

3. LG Electronics filed a patent application for smartphone pupil recognition four (4) years ago

- LG will confirm whether a patent infringement exists because LG’s patent application was filed prior to Samsung’s patent application

It is disclosed that four (4) years ago, LG Electronics filed an application for a patent related to the pupil recognition technology which has been used in a smartphone Galaxy S4 of Samsung Electronics.

According to the patent information search service of KIPO, LG Electronics filed a patent application titled “a portable device and a method to control the same”, including the technology of controlling a smartphone by recognizing a user’s eyes.

This patent application contains the matters of ▲ bringing to a focus when taking pictures, ▲ stopping and continuing video play, ▲ scrolling screen contents up/down and ▲ automatically turning on/off an alarm according to the location of the user’s eyes.

For example, when a user turns his/her eyes out of the smartphone screen in watching a video, the video play stops. And when the user turns his/her eyes to the smartphone screen again, the video starts again.

The issue is that, the aforementioned function is factually the function having the same roles of ‘Eye Pause’ in Galaxy S4 published on March 14 (at local time in USA).

Samsung Electronics put a teaser image introducing the Eye Pause function on YouTube with the product launching ten days ahead, increasing the expectancy of the product and informing this function as a core user experience (UX) of the product.

LG Electronics also announced that they would use this function in the name of ‘Smart Video’ in the Optimus G Pro during April.

4. DongBu LED conclude a license agreement with Osram

On March 5, DongBu LED announced they concluded a license agreement related to a light emitting diode (LED) package with Osram, a German company.

DongBu LED can use a total of 95 patents related to Osram’s white conversion package technology (to change blue LED light to white). Previously, LED companies experienced disputes while conventionally using Osram’s patented technologies. LED lighting companies established the patent issue settlement with Osarm as the prerequisites of the LED package/module supply contracts.

Through this agreement, DongBu LED expected to provide products that client companies can use with an easy mind. Following Seoul Semiconductor, Lumens, Samsung Electronics and LG Innotec, Dongbu LED is the fifth Korean company concluding the LED licensing agreement with Osram.

“Lighting companies in Japan and Americas, such as Sharp, Hitach, Panasonic and GE among the others, have requested the settlement of patent issues with Osram for a long time. … This agreement will be of great help in cultivating the market in Japan and Americas occupying about 60% of the world LED lighting market”, said a spokesperson of DongBu LED.  


Application trend for intellectual property (IP) rights during the first quarter of 2013 (News Letter No. 263)


The Korean Intellectual Property Office (KIPO) shortened the patent examination processing period to ten (10) months (News Letter No. 261)