Companies and individuals -- even nonpracticing entities, commonly referred to as “patent trolls” -- should not be restrained from or blamed for exercising their guaranteed patent rights in the market, according to the chief of a leading intellectual property service provider.

“The core point of the patent system is to bestow legal rights upon new technology and allow the patent holder to derive consequent economic profits,” Lee Hyung-chil, president of Worldwide Intellectual Property Service, told The Korea Herald in an interview.

“One may or may not regard NPEs as malicious gold diggers, but the hard truth remains that they are exercising their legitimate rights, not stealing anything from anybody. The term ‘patent troll’ is therefore an unjustified expression.”

A nonpracticing entity is a person or company that does not practice the acquired patents, but instead exploits them in the form of enforcing them against alleged infringers or to obtain royalties. A well-known example is Uniloc, a US-based company that filed a number of patent suits against LG Electronics last year.

In an industrial environment that is heavily centered upon conglomerates, however, NPE activities may actually offer an incentive for smaller players to develop new technology and convert it to tangible assets, according to the WIPS leader.

“In terms of numbers of patents issued, Korea is a top-tier country in the global IP market, but its level of patent protection has been relatively weak,” Lee said.

This was partly due to the decadeslong affiliation between government and conglomerates, according to the IP expert.

“In case of conflict between industrial giants such as Daewoo and Samsung, the government would frequently intervene and reconcile the two before the agenda develops into a legal brawl,” he said.

“Also, there has long been some nationalist sentiment that believes that the country’s prosperity depends on the well-being of these conglomerates and that their businesses should not be harmed.”

Having kicked off in 1999 as South Korea’s first online worldwide patent information service provider, the company says it has now expanded to become the world’s only player to provide a full range of IP services, ranging from patents, trademarks, copyrights, industrial designs and IP consulting to IP education.

As an industry pioneer, WIPS has kept a steady lead, currently accounting for some 60 percent of the market.

Due to its unique, comprehensive function, the company’s client list includes many domestic manufacturers, especially those with their own research institutes, Lee explained, including Samsung Electronics, LG Electronics, and SK hynix.

“The patent system is a process that perceives technology in a legal perspective, which is why its related documents are quite similar to academic theses,” Lee said.

“For corporate-affiliated institutes, having access to such patent data means that they may figure out the technological proceedings of rival companies and build a responding business strategy.”

The usual practice for conglomerate-affiliated research institutes is to sign a yearly contract that allows all of its members to freely access WIPS’ IP information search engine and to review the plausibility of its newly developed technologies.

“For instance, if a home appliance maker were to develop a curved surface television, it would require a comprehensive report on industrial precedents, rival technology and legal plausibility,” Lee said.

“Also, because we frequently conduct surveys on sensitive incoming technology, there is a highly strict level of confidentiality obligation. Our research team works in a secluded area, which may only be accessed after three stages of personal identification.”

The extensive range of research and consulting required by key clients is what rapidly expanded WIPS’ work scope during the first few years in business, the chief explained.

“My initial plan was to build and operate a patent data search engine that contained all patent-related data in a single system,” Lee said.

“But the next challenge was that, due to the complicated terms and legal concepts involved, clients found it hard to understand the accessed information, so we soon started to offer research and consulting services as well.”

While allocating a majority of its resources to patent operations, WIPS is also seeking to further expand other sectors such as trademark designs.

Of its 60 employees who work in trademarks, some are dedicated to creating new designs for clients that comply with the trademark law.

“It is relatively easy to find a designer, or a trademark consultant, but a person who may perform both jobs is quite rare,” Lee said.

Last year, the company‘s trademark design team created a signature soccer ball upon the request of the Korea Football Association.

“I would like to think that our business provides a legal touch point to different industrial sectors, such as technology and design.” 


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


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