A Study on the Intellectual Property Issues in Korea‐China FTA Negotiation

Abstract

As the Industry-Academy-Government Joint Study on the Korea-China FTA finished in May 28 2010 and the 1st intergovernmental consultation for the FTA was held in September 28~29 of the same year, the FTA negotiation between the two countries seem to start soon. China is one of the fastest catch-up economies in the world, whose technological competitiveness has been increasing dramatically, in terms of intellectual property (IP): In 2008, it ranks the 1st in the number of utility models, industrial designs and trademarks filed. Korea is also competitive in this aspect, although the absolute number and the rate in increase of the rights filed are smaller than those of China: it ranks the 4th with 170,632 patents, the 3rd with 137,461 trademarks and the 2nd with 17,405 utility models and 56,750 industrial designs. Korean firms have been clamoring about IPR infringements and poor enforcement systems of China. In these situations, IPRs are expected to be one of the key issues during the Korea-China FTA talks, even though China has been recently cracking down on piracy and infringement. It may be impossible to put the IPR chapter of the Korea-China FTA at the same level as the Korea-U.S. FTA or the Korea-EU FTA. However, in any case, it is not desirable for the chapter to remain at the level of the TRIPs or the FTAs previously concluded by China that focus on capacity-building or cooperation rather than on IPR enforcement. In this respect, this paper aims to explore key issues to be raised on IPRs at the negotiation table and suggests policy directions towards a mutually profitable agreement between Korea and China. The Korea-China FTA should proceed in the following three directions. First, the provisions that are included in Korean laws but not in Chinese laws or those in which there exist differences between the two should be included or modified in the FTA text - patent term extension, part of designs, unregistered design, patent pending, utility model through preliminary examination, 10 year-duration of design and the definition of well-known trademarks. Second, practical implementations of IPR laws and relief measurements should be guaranteed through the negotiation. For example, each country needs to share the seriousness of problems originating from poor enforcement systems of China, especially, the low fines and the high thresholds of penalty, and to try to seek for solutions to correct them. Third, before the start of the negotiation, a positive but cautious approach needs to be made to new IPRs which have been dealt with in the FTAs previously concluded by China but are uncomfortable for Korea, e.g. genetic, traditional knowledge and folklore.