Korean companies eye tech licensing

After paying almost $2 billion in royalties during the past decade, Korean companies are increasingly applying for patents that they hope will allow their technologies to become international standards. In the domestic cell phone market, the code division multiple access standard has reigned for the past 10 years. The patents for that technology are held by Qualcomm, a mobile chip manufacturer based in San Diego, California. The company had received about 2 trillion won ($1.75 billion) in total royalties from domestic cell phone and phone system makers through last year. As the importance of standard technology increases, more Korean companies are presenting their technologies to organizations that set international standards. “If we initiate standard technology, we can be first in the product markets and earn royalties too,” said Lee Hee-gook, president of LG Electronics Institute of Technology. On March 17, Techsphere, a biotech institute, proposed to the International Standards Organization that its technology to identify persons through vascular patterns in the hand be adopted as an international standard. It has also applied for international patents. Korea Zinc Company Inc. and Samhwa Non-Ferrous Metal, two of Korea’s largest zinc companies, have asked that the standard for purity in alloyed steel be set higher than the present 99.99 percent. If it were, Korea’s metals industry would be in a more favorable position than Chinese and Bangladeshi products, which have a lesser degree of purity. Despite these efforts, however, only a few domestic technologies have actually been selected as international standards. Last year, among 19,455 applications registered with the International Organization for Standardization and International Electrotechnical Commission, only seven were recognized as being composed entirely of technology developed in Korea. Another 63 were recognized as being standard technologies developed jointly with foreign companies. Although the scale is still small, some companies have started to collect royalties from foreign countries for certain technologies. Five companies, including Samsung Electronics, LG Electronics, and Panatech & Curitel, said they may receive $10 million this year and $50 million next year for royalties on MPEG-4, a technology used to compress digital video. A segment of the core technology for MPEG-4 was developed by a Korean company and was selected as an international standard in 1999. Park Young-hwan, a senior director at the Korean Standards Association, said technology standards are vital in adding value. “The industry should cooperate with schools and research institutes to acquire these international patents,” he said. by Chang Se-jeong