Patent of Business Model in Korea

The Korean Industrial Property Office (KIPO) has recently defined its position as below regarding patentability of Internet business model as a variety of discussions are continued in industrial fields, research institutes, patent attorneys and others about Internet-related patents such as business model patent and the like.

According to the KIPO, examinations are being performed on "computer- related patent examination guidelines" with regard to patent applications on Internet- associated inventions, and as from August 1, 2000, "e-business related invention examination guidelines" will be separately enacted to be applied for examination.

Furthermore, the Patent Act will be revised as of July 1, 2000 to examine on priority base patent applications directly related to e-business revitalization as part of Government's general measure for accelerated e-business.

There have been opinions that continuance of patent on e-business-related patents should be curtailed however, the KIPO has announced that shortened protection period of patent thereon had never been considered in order to comfortably manage the patent system in line with the international trends

In practical examination, patent can be granted when idea of business method is disclosed in industrially useable concrete means based on computer, communication and Internet technologies, and cash flow system in banking institutions, Internet advertisement device and method thereof can be accorded of patent as long as patent requirements are met. The KIPO has also said that although business method (business model) itself, an idea which is not a high creation of any technical idea applying the natural laws, cannot be an object of patent, patent thereto can be awarded if concrete technical conception is provided with computer, communication and Internet technologies fundamentally based. In general, patents are supposed to be unobvious to a person having ordinary skill in the particular "art" being considered.

Statistics of Industrial Property Right Applications

The KIPO has released that a total number of industrial property right applications in 1999 is 230,874, a 24.7% increase over the like period of 1998, which was 185,209, and by category, a 7.2% increase in patent, 5.8% in utility model, 36.4% in design and 52.1% up in trademark. As shown, dramatic gains are especially manifested in trademark and design applications last year.

The number of applications in industrial property rights has maintained a continued growth every year up to 1996 but temporary decrease has been recorded during the years of 1997 and 1998 due to withered domestic economic situation under IMF regime. However, applications in industrial property rights have increasingly returned to erstwhile figures and are seen to sustain an upward trend in the years to come.

Domestic and foreign applications alike are all increased compared with those of 1998, where filings by Korean nationals have gained a 30.6% increase while foreigners have only made an 3.8% increment. Particularly, whopping upward disposition of trademark and design applications evidences that Korea has escaped from overall downward trend in economic situation under IMF management.

Out of 188,345 cases filed by Korean nationals in 1999, private individual application is numbered 88,259, comprising 46.9% of the total domestic filings, and 53.5% increase over last year and constituting a lead over last year's application increase by 61.3% from 8,434 cases in 1998 to 13,607 cases in 1999, wherein women and students briskly distinguished themselves by increased filings of industrial property rights by 37% and 120% respectively in comparison with last year, which is analytically resulted from various benefits inclusive of enlarged reduction of filing fees.

Statistics of Industrial Property Right Applications

Classification		1998		1999		increment over previous year
		cases	ratio	cases	ratio	cases	ratio
patent	Korean nationals	50,596	67.3	55,964	69.4	10.6	2.1
	foreigners	24,592	32.7	24,662	30.6	0.3	2.1
	total	75,188	100.0	80,626	100.0	7.2
utility model	Korean nationals	28,604	99.0	30,269	99.0	5.8	--
	foreigners	292	1.0	303	1.0	3.8	--
	total	28,896	100.0	30,572	100.0	5.8
design	Korean nationals	22,144	93.3	30,834	95.3	39.2	2.1
	foreigners	1,588	6.7	1,530	4.7	3.7	2.1
	total	23,732	100.0	32,364	100.0	36.4
trademark	Korean nationals	42,895	74.8	71,278	81.6	66.2	6.8
	foreigners	14,486	25.2	16,034	18.4	10.7	6.8
	total	57,381	100.0	87,312	100.0	52.1
total	Korean nationals	144,239	77.9	188,345	81.6	30.6	3.7
	foreigners	40,958	22.1	42,529	18.4	3.8	3.7
	total	185,197	100.0	230,874	100.0	24.7