South Korea's trade balance from intellectual property rights stayed in the red in the second quarter, but the deficit shrank significantly from a year earlier on a large cut in deficits from industrial property rights, central bank data showed Thursday.
  

In the April-June period, the country posted a trade deficit of $550 million in the intellectual property sector, according to the Bank of Korea.
  

The Q2 tally marks a 63.6 percent drop from a deficit of $1.51 billion in the same period last year. It also marks a 76.2 percent plunge from the previous quarter.
  

The drastic drop in the overall trade deficit came mostly from an equally large cut in deficit from the industrial property rights sector, which slipped to $320 million from $2.08 billion in the previous quarter.
  

More specifically, the country's trade balance in the industrial patents sector made a sharp turnaround from a $1.87 billion deficit in the first quarter to a surplus of $80 million in the second.
  

Such a drastic change was partly attributed to what BOK officials called a seasonal effect, noting many local companies, especially large manufacturers, tend to make one-time payments on patents at the start of a year.
  

The drop, however, was also attributed to a rise in overseas production by local companies.
  

"For instance, a rise in production of mobile phones by South Korean firms in Vietnam helped boost the country's exports of patent rights while it led to a reduction in the country's imports at the same time," Hwang Sang-pil, an official from the BOK's economics statistics office, told reporters.
  

The country's deficit from the industrial designs sector widened to $140 million in the second quarter from an $80 million deficit in the previous quarter, while the deficit in trademarks and franchise sector doubled to $260 million over the cited period.
  

By industry, the manufacturing sector posted a deficit of $350 million in the second quarter, compared with a deficit of $2.14 billion in the previous quarter, while the deficit in the service sector slightly widened from $190 million to $220 million over the cited period.
  

By country, South Korea posted a trade deficit of $890 million with the United States, down from a deficit of $2.42 billion in the first quarter.
  

The country's largest surplus in the intellectual property sector was achieved in trade with China, though the surplus shrank slightly to $400 million from $430 million in the previous quarter. (Yonhap)