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Subject : South Korea Exceeds USD 3 Billion in Loyalty Fees   
Date 2010-07-30 Visit 4412

According to a report made by the Bank of Korea on 1 July, loyalty fees paid by South Korean companies for patents between January and May this year has already exceeded USD 3 billion.
This is an increase of USD 1.06 billion (50.1% increase) since the same time period of last year (USD 2.11 billion).
This number has first exceeded USD 2 billion in 2005 and this year is the first to go over USD 3 billion.
On the other hand, South Korean companies have earned USD 1.29 billion from foreign firms for permitting them to use Korea’s patented technologies, illustrating only a 27.7% increase since last year.
Thus, South Korea’s experiencing a deficit in licensing/loyalty fees of USD 1.88 billion, which is a 70.8% increase since last year.
This indicates that South Korea has produced more products utilizing foreign patents.
For example, if sales of cellular phones increase, then loyalty fees to foreign firms increase accordingly since Korean companies apply foreign patents to manufacture these phone products.
Thus, this rise in deficit of loyalty fees may imply activated manufacturing market, which may be beneficial for South Korea in the long run.



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