Intellectual Property Protection Strategies of Foreign Companies in Korea

This paper aims at analyzing the intellectual property (IP) protection strategies of foreign companies in Korea to suggest policy implications. To this end, the Korean Innovation Survey (KIS) data conducted by Science and Technology Policy Institute (STEPI) is utilized to analyze various IP protection methods – secrecy, lead time and complex design, as well as patent. Specifically, the following three questions were in focus: What are the methods used by foreign companies to protect their IP? How effective are the methods? Can they make more diversified IP protection strategies, compared with domestic companies? Major empirical findings are as follows. Compared with domestic companies, foreign companies are more likely to use secrecy and lead time (rather than patent) and evaluate their effectiveness higher. Also, they tend to utilize more profiles of IP protection strategies than domestic companies. However, the results are true only in the service sector, where competitiveness is relatively low, but not in the manufacturing sector. This paper emphasizes the importance of spillovers from FDI or foreign R&D to Korean companies, especially in the service sector, and suggests policy implications for maximizing spillovers - the facilitation of academy-industry knowledge transfer channels, the improvement of IP protection environments and so on.