Tuesday, January 03, 2006

The Other side of Overseas Royalty Payments

As some of you frequent readers know, one of my pet peeves is Korea's constant hand-wringing on the fact that Korean companies pay more licensing fees overseas than they receive. To a large extent, in my opinion this drives much of Korea's current industrial policy.

I have not problem with the policy, what I have never liked was the hand-wringing over the issue. A good example is this recent Dong-A Ilbo article about the issue. The opening line thunders with the slant of the piece:

 Korean companies are paying far more in patent expenses (compensation fees and royalties for disputes) now than in the past because large foreign companies are waging an intellectual property rights war against them. 

According to the Dong-A, one of the largest newspaper in Korea, foreign companies are "waging war" against Korean firms. What really raises in dander up in articles like these is they never state the positives of Intellectual Property trade.

Today in the Joongang Ilbo was a nod to this salient fact. In an article trumpeting the introduction to CDMA services in Korea, they spell out the benefits of licensing Qualcomm's technology:

According to the Electronics and Telecommunications Research Institute, CDMA technology induced an increase in domestic production worth over 125 trillion won ($124 billion) from 1996 through 2001 and created 1.42 million new jobs.  
 Korea has since become a key global supplier of mobile phones, accounting for over one fifth of the world market share last year, exporting $25 billion worth of handsets.

If this is a war Dong-A, Korea seems to be winning with figures like that.Not only that your best weapon in the war concedes that without licensing IP they would have been nothing:

"After its bold decision to venture into the untrodden CDMA market, Korea was able to become a major power in the information and technology sector," said Lee Ki-tae, head of cell phone maker Samsung Electronics Co.'s information communications division. 

"The nation was able to accumulate capital and fundamental technology in CDMA, which later helped us enter the GSM market and eventually gain leadership in next-generation mobile communication services such as mobile Internet and digital multimedia broadcasting, or DMB." 

Mr. Lee added that if Korea had opted for time division multiple access, or TDMA, the technology behind GSM that was dominated by Nokia and Motorola in the mid 1990s, Korea's mobile telecommuncation industry would have failed to survive. 

To say the least, in my opinion failure to quote facts like the above in articles like the Dong-A's constitutes a shocking lack of journalistic integrity. One thing that has always shocked us foreigners is the propaganda peddled as journalism here. This field is no exception.


At January 03, 2006 6:48 PM, Blogger Sperwer said...

South Koreans' whingeing about royalty payments is the equivalent of NORK bombast about being stifled by the US because we take steps to prevent them from counterfeiting greenbacks.


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