Monitoring puts more emphasis on tech, drug sectors


The nation’s antitrust watchdog is looking into patent licensing deals between multinational companies and their Korean partners with an aim to prevent abuse cases here, officials said Wednesday.

According to officials of the Fair Trade Commission, the regulator has recently completed a rough investigation into major patent contracts in the tech and pharmaceutical sectors and requested a private institution to carry out an in-depth analysis.

“We have continued enhanced monitoring especially in the tech and pharmaceutical markets where many patent deals are made. We have no immediate plan to announce the result,” said an FTC official.

Amid growing interests in patent rights following a widening battle between Samsung Electronics and Apple, the official made it clear the ongoing research had nothing to do with the high-publicity case.

“The research, as part of our normal market surveillance activities, is just the first step we’ve taken before launching a full-fledged antitrust investigation into suspected cases,” said another official, denying any new move was made by the FTC after a recent court ruling on the Samsung-Apple case.

In an annual report to President Lee Myung-bak early this year, the FTC said it would strengthen surveillance on patent deals here as some Korean firms, mostly small and mid-sized businesses, were suffering from unfair contracts inked with powerful multinational companies.

When it comes to the information technology sector, the FTC plans to focus more on areas such as software and servers for corporate use, where global companies are likely to abuse their market dominance to enforce unfavorable conditions on smaller firms.

In the pharmaceutical industry dominated by few multinational drug makers, the agency also will tighten monitoring as most local companies are generic manufacturers who pay heavy royalty fees.

As Korean companies are relying more on foreign intellectual property for their products, their overseas royalty payments now amount to 10 trillion won ($9 billion) per year.

According to the Bank of Korea, their payments climbed to a record $4.31 billion in the first six months of this year, up 14.1 percent from a year ago.

Industry watchers say that the country has seen a chronic deficit in the balance of cross-border money flow for using patented inventions, which shows Korea has not secured sufficient core technologies.

By Lee Ji-yoon (jylee@heraldcorp.com)