Dram Man

Bump

2009-04-14T16:25:00.000+09:00

Just something quick to keep this active.

KTF Accused of Ad Plagerism

2007-11-08T06:43:00.001+09:00

In a situation reminiscent of LG problem a year ago, KTF, one of Korea main mobile phone service providers, has been accused of copying a Microsoft Zune ad from the US. KTF's ad agency says the shots are common industry wide and any resemblance is coincidental.

This is one you can judge for yourself.

Take a look at just the first 10 seconds of the Zune ad:

Meanwhile the KFT can be seen here. Note the last ten seconds of that ad with the first ten of the Zune.

As I said, LG confronted the same allegations about a year ago. See my post on it here. The past article had one of favorite quotes ever, "We borrowed the image, not stole it!"

Hillstate

2007-10-30T09:43:00.001+09:00

Not really IP related, but I wanted to put this somewhere. From a Korea Times article on a new Hyundai Construction brand:

Hyundai said the brand ``Hillstate'' is to evoke feelings of high society and pride and is a combination of the word ``Hill'' representing a high-class residential complex and ``state'' that suggests high status.

Additionally, the name symbolizes the ``H'' of Hyundai emphasizing ``history,'' ``hotness,'' ``human,'' and ``honor,'' which are four main tailored categories appealing to consumers, company officials said.

Silly me, I thought the "H" in Hyundai meant "Hyundai". Barring that, how could the H represent four things at the same time (in addition the name). Thats one busy "H". Finally, "Hotness"? "Human"? Who are they kidding?

The Party is Over

2007-10-29T09:53:00.001+09:00

Headlines recently:

Ballerina Disciplined for Nude Photos - Chosun Ilbo, Oct. 26, 2007

U.S. official to Korea: Open wide for beef - Joongang Ilbo, Oct. 29, 2007

Drug and Sex Party Organizer Busted - Chosun Ilbo, Oct. 29, 2007

Rumor is the party was for Newspaper headline writers.

Thats no Chair!

2007-10-26T18:00:00.001+09:00

In a case reminiscent of the Vincent & Co. watch situation last year, nine importers of "Luxury" "European" furniture have been fined by the KTC for actually getting cheap stuff from China.

What is interesting is the parting shot from an KTC official:

"We are going to expand the scope of our investigations with regard to the origin of products to other luxury goods such as handbags from next year,'' said Park Sung-soo, director general of the Office of Investigation of the KTC.

Should be interesting if...well IF and HOW it may work.

WiBro Theft Punishment

2007-10-23T05:36:00.000+09:00

About six months ago news came out that a former POSTDATA employee stole IP related to Korea's WiBro wireless standards technology. Seoul Central Court recently sentenced some of the conspirators:

The Seoul Central District Court said Sunday that it sentenced a former researcher from Korean IT company POSDATA to three years in prison for attempting to sell the company's core WiBro technology to a U.S. firm.

It also sentenced four other accomplices to 18 to 30 months in prison with a stay of execution for three to four years and 120-160 hours of public service.

(In case you are doing a double take at the last line, it can be interpreted suspended and the four will walk with community service. Also makes me wonder if Kim, sentenced for three years, will make the stereotypical hospital appearance to escape the pokey.)

No word however about the progress of the injunction filed by POSDATA in the US against Kim and InQuadron (the front set up the sell the IP).

Making Bank

2007-10-23T05:02:00.000+09:00

Read this is if you wonder why the Korean legal community is willing to fight tooth and nail against opening up in FTA agreements. Thankfully the patent bar is so specialized and obscure it's always off the table.

Does Kia Motor's have a squatter?

2007-10-12T18:17:00.000+09:00

An interesting little twist happened in a post I made earlier today at the Marrmot's Hole. The Hole is a blog a friend runs, and is one of the more popular Korean related blogs on the 'Net. I got a taste of his hit count a couple times, at it is staggering compared to my modest numbers. Normally my contribution there are things I want to note, but do not fit in here really.

I commented on the name contest Kia Motor's is running for a newly designed SUV they are releasing soon. The contest concerns only the name being used in Korea. Not paying attention to such things too much these days, apparently the SUV is going to be sold the US as the MESA. Meanwhile, the choices that are being voted on for the Korean model are MOHAVE, WINDRIVER, and OPELIA.

In the comments section to my original post, somebody pointed out the obvious, basically "Why not call it the MESA in both markets and be done with it?" That comment got me checking the KIPO database. It started with the mark MOHAVE, which KIA applied for in Class 12 (cars) on June 29, 2007. WINDRIVER was registered by Hyundai motors (Kia's parent company) on January 24, 2001. OPELIA I cannot find, which does not mean much, it could be recent and simply not been put into the publicly accessible database yet.

Meanwhile when you search MESA in class 12, you get registration #1615 filed on March 22, 2007. And would you know it, there is this post from January 22, 2007 on a Auto news site talking of a "Kia Mesa". The name was being talked about for a while, and the good folks at Kia/Hyundai never thought to get around to registering the trademark until June 2007. Definitely well after a Park Jeong Hae applied for the aforesaid MESA in March 2007.

So what can we find out about Ms. Park? Is he some poor old lady in her garage dreaming of a forming a MESA brand auto empire one day? Thanks again to the miracle of the Internet and the KIPO data base can find out some more. Every applicant with KIPO has a special ID code that travels with them (this can create great problems for foreign companies merging, spinning-off, and moving, but I digress). If you type in Ms. Park's code, you can find she filed for 64 different marks, some refused, some registered, some pending.

One of Ms. Park's interesting filings is for AMUSE ISLAND for various service businesses, including tourism related businesses. The mark however was originally used for a tourism development project in Seoul in use at least 9 months before he filed it. The project is stalled, but that has not stopped Ms. Park who has filed for the mark numerous times since that first filing. She has been successful with some of them it seems.

Perhaps most jaw-dropingly audacious of Ms. Park however are the filings of KIPO (#31960,#00052), KIPONET (#00053), and KIPRIS (#31961) in class 42 (legal, scientific, and computer services). As you may guess, all of these are acronyms related to the services of the Korean Intellectual Property Office and its computer systems. This lady actually applied to have KIPO give up the short hand names they have used for over 30. Amazing!

Of course none of this PROVES bad-faith. Neither does any of the other of Ms. Park's filings in the KIPO database with similar circumstances around it. No doubt Ms. Park filed for MESA in good faith, and one day plans to use it for cars. Sure is peculiar though.

(Oh final note, from my own work here in Korea. In working quite a few cases similar to the one above, it has always amazed me how when we contact the lady with a number of marks registered to her as an individual, we almost always get a man who "really owns" the mark. While proving nothing it and of itself, it does make it that much harder to prove bad-faith on the part of the legal owner. So in other words, something else I consider peculiar.)

Cybersquating in Korea

2007-10-01T09:29:00.000+09:00

Samsung is involved in a suit against some sort of local Kimbap maker (the site does not work at this moment, sorry) over the www.sens.co.kr domain name. After being involved in a few cases like this in Korea, I feel for Samsung. There are quite a few squatters, and Korean Law does not give too many tools to combat the phenomenon.

Normally the best way to do this is the squatter is usually a business in a similar industry as the registered trademark the domain embodies. You can then go after them for trademark infringement proper, and make the domain issue peripheral and an easy win. However, Samsung does not have that luxury, Kimbap and electronics are not under the same trademark class.

Of course though, the real good news is this is Samsung. If there is anybody that could possibly work the limited tools against cybersquating in Korea, its lawyers backed up by a company like Samsung. This could offer a good precedent in future cases. Lets keep our fingers crossed.

Now looking beyond the news story linked above, I would love to get some more information. It could be that this Kimbap company could have a very legitimate business using the mark Sens. There use could even predate Samsung's.

Stupid Tourist Tricks

2007-10-01T09:00:00.001+09:00

This story of Mr. Kim Chang-mo being caught trying to smuggle from Seoul about 50 pounds of what is likely fake jewelry in the Philippines makes me wonder if Korea has succeeded in making itself a "Hub" in some ways.

Is anybody learning?

2007-09-09T22:05:00.001+09:00

In the past couple years Korea's academia have been rocked by first Hwang Woo-suk's stem-cell mass fraud, accusations and confessions made by college professions and deans of plagiarism, and now a long due witch-hunt for fake degrees.

So what does Korea's Kyungpook University do? Perhaps adds gasoline on things by offering fifty times more than other Korean university for any article published in the journals Science or Nature. Great way to increase the incentive for more fraud Kyungpook.

Period? Good News? Overstatement?

2007-09-02T10:25:00.001+09:00

The Korean Times has a rare decent article on recent trademark decisions in Korea. What jumps out at me immediately however is a, perhaps unintentional, trend in the cases cited:

Does last year's Starbucks v. Starpreya battle over beverage brands ring a bell?

A trademark infringement case, in which the court sided with the local out-of-the-truck seller - with a strikingly similar look and feel to Starbucks - against the world's largest coffee chain stirred observers to ask, ``How close can you come in Korea?''

Pretty close - but almost a year later, the court last week ruled against a ``PC bang'' (Internet cafe) that apparently copied a competitor's brand, which law experts say is a landmark decision that sends businesses a strong message.
...
Two years after Zone & Zone PC bang filed a suit in 2005 against LOHAS for stealing insider information and brand imitation, the Seoul District Court sentenced the defendants to six to eight months in prison suspended for two years for infringing the Trade Secret and Unfair Competition Law.
...
Chicken franchise Kyochon and its alleged copycat Pochon Chicken, and pub chain Jjoki Jjoki against eateries Suhyouki and Black Jjoki are major examples of local look-alike businesses.

As Jjoki Jjoki currently has a case filed against Suhyouki, the company spokeswoman says they are optimistic about the outcome.

Hmm...what which one of these is not like the other: Starbucks, Zone & Zone, Kyochon, Jjoki Jjoki. I like to think some things about Korea's IP environment, but things like this slap me in the face. I hope its all a coincidence the reporter put these things together.

One other thing strikes me in the article:

Two years after Zone & Zone PC bang filed a suit in 2005 against LOHAS for stealing insider information and brand imitation, the Seoul District Court sentenced the defendants to six to eight months in prison suspended for two years for infringing the Trade Secret and Unfair Competition Law.

"An appeal is yet to be heard, but the ruling so far is good news for the franchise industry,'' said Samantha Min, a lawyer of YOU ME Patent & Law Firm.
...
She said that the Intellectual Property Law itself isn't lenient here, but the punishment is.

While I can agree with Ms. Min on the punishment issue, there is something missing here. Based on my experience, such a heavy sentence is not given out in the run-of-the-mill unfair competition case. My guess is that was some proof LOHAS acted in bad-faith or willfully. Particularly with the citing of the "trade secret" law, which usually needs some "smoking gun" type evidence. Accordingly, I doubt this case is as applicable to others as Ms. Min says so. Likewise, I doubt the absolute tone invoked by Mr. Kim Joong-hyo, a patent attorney at Choice Law Office quoted in the article:

"It tells them that imitating is illegal - period,''

Time will tell Mr. Kim, but I ain't holding my breath simply given this case.

Trying to teach an old dog

2007-08-16T11:53:00.001+09:00

One of the commerce associations, union as the article refers to them, representing a segment of merchants at the Yongsan Electronics Market maze of shops has urged their members to end counterfeiting software. The move, sponsored by some major domestic and foreign software makers, is made to recognize the "the rising importance of intellectual property rights due to Korea's free trade agreement with the United States." according to the firm.

It bothers me the "blame the foreigner" argument is given as a reason. Not the effort, but also note the article blames China for the counterfeits in the first place (as if Koreans would sell copies, but never make them!). This is a bit of a tangent, but consider that fakes slaughtered Hansoft, once the dominating leader in word processing in Korea. Solving the problem benefits more than the foreigners Korea tends to knee-jerk react to, its dismaying that the commerce association has not figured this out given Korean company participation in this program as well.

Then again, consider the actual substantive measure being taken by the association:

The co-op released a statement asking the 7,000-some vendors in Yongsan to voluntarily participate in the campaign, which they defined as of having an "enlightening" purpose. Until Sept. 30, the union will set up a "clean center" where consumers can come and check if their software products are legal. The association will exchange unlicensed software products for authentic items and the vendor who sold the bad item must be educated and pay the price of the real software.

Wow a "clean center" for a little over a month! Begs the question of course what happens after that month. One laughable thing is the idea that consumers are unsure if they bought legit software. You know when it comes on a CD with "MS OFFICE" written by a sharpie, in a cheap case, and a photocopied label at a price of US$20 it's somewhat obvious. The vendor knows what he is selling, and the consumer knows what they are buying. So I am unsure what "clean center" would accomplish at Yongsan other then pointing out the gullible. The biggest hollower however is the "voluntary" participation in the program. What are the chances for a stall knowingly selling fake software will enter the program?

A larger question is what will the "clean center" do for all the other piracy going on in Yongsan. Fake DVD movies are as prevent as mosquitos during Korean summers. If you buy a game console in Yongsan, you almost have to specifically state you do want it "mod chipped" so as to play fake games. Things like peripherals, MP3 players, accessories, and cabling that either resemble or outright counterfeit original products are pretty common as well. Story does not say what will happen with ilk like this.

Hankyoreh makes an interesting admission

2007-07-18T11:38:00.001+09:00

In todays Hankyoreh, an unsigned editorial appears on the the Korean-EU FTA talks now going on. They Hani, being Korea's unmistakable lefty paper, gives a line with an interesting implication:

A trade deal would mean more than just an increase in physical goods. EU companies could be expected to enjoy a big increase in earnings through changes like stronger intellectual copyright protections. For example, blocking the circulation of pirated products would allow European companies to maximize the value of their competitive products. The European Union is demanding that "items that potentially infringe on intellectual property rights" be prevented from clearing customs altogether.

So is the Hani saying that not only are pirated goods widely trafficked in Korea, but such trafficking is a staple of the economy?

Of course the larger issue in a way is the continued mindset that foreigners are "forcing" the issue on Korea. Its interesting on how the Hani totally misses the fact that Korean law already allows for ""items that potentially infringe on intellectual property rights" be prevented from clearing customs altogether". All the rights holders have to do is call the customs service.

LG plays the victim card on Hitatchi

2007-07-17T18:13:00.001+09:00

Again, I am a bit late in posting this, but LG recently sued Hitachi in response to the Japanese firm's original suit in April. What caught my eye is a line that would make just about any expat groan:

"Japanese firms are filing more and more lawsuits as competition in the global display market increases dramatically," Lee Jeong-hwan, manager of LG's intellectual property centre, told the Korea Herald.

Once again Korea are under attack from the Japanese. Cheap move LG, cheap.

To make it even worse is this rather quizzical report in the Joong-ang Ilbo via Yonhap:

[The suits] follows the failure of closed-door negotiations since 2005 over the sharing of PDP-related patents, according to LG Electronics.

LG Electronics officials said that both sides failed to find common ground over patent sharing as they saw "too much difference" over the value of the technologies involved.

"We hope that the legal dispute can be resolved out of court through a cross-licensing deal between the two companies," an LG Electronics spokesperson said.

He didn't disclose how much compensation LG is seeking

The fact Hitachi sued first leads me to believe that they are the ones who value their patents more highly. Yet note the question from the Korean press (and perhaps LG) is not "IF" they will receive compensation from Hitachi, but "HOW MUCH". This is just too rich.

LG and Microsoft Linux Deal - Who is Microconnect

2007-07-17T17:58:00.000+09:00

I know I am late in getting to this, but I wanted to a bit of research first.

Last month LG Electronics and Microsoft inked a cross-licensing deal. Most of the press about the Linux provisions that LG agreed to. However a couple things caught my attention. First from Information Week:

Specific financial terms of the cross-licensing pact weren't disclosed, but Microsoft said the arrangement calls for it to make "net balancing" payments to LG. That implies that the two companies have agreed that the technology to which Microsoft gains access is more valuable than the Microsoft technology claimed to be part of Linux.

What set me off was this line in the local Jooang-ang Ilbo:

Microsoft will have access to LG Electronics patents and will license other patents developed by LG that are now owned by the business solutions provider MicroConnect Group.

That lead me to the question, "Who is MicroConnect?" The original press release has a quote from an Alan Loudermilk, who is cited as the president of MicroConnect. This lead to a Google spree which dug up details (the candor of some of them a bit disturbing to me). Loudermilk is listed as an inventor a number of patents, but also as an patent agent or attorney.

Which leads to a set of questions of the nature of MicroConnect. Given today's IP climate, this facet makes me wonder if it was LG that had Microsoft over a barrel, and not the other way around.

North Korea finds IP a source of hard cash

2007-07-17T17:25:00.000+09:00

As I get to my news backlog, the first thing that pops out is a Hankyoreh story of an album of North Korean songs now being sold in South Korea, with royalties going to the North:

Produced jointly by an organization promoting economic exchange with Pyongyang and UB Entertainment, the album includes renditions by ten South Korean artists, including Vibe, Maya, Bae Seulgi, and Baby Box Rev. It will be titled Dongin and is set to be released June 7...

North Korea's copyright agency is a new office created under the direct supervision of its cabinet. The organization that jointly produced the album is headed by Uri Party member of the National Assembly Im Jong-seok and received exclusive authority for dealing with North Korean copyright issues in South Korea in 2005.

I am not to sure how pioneering this is, given the history here. About two years ago a North Korean agency sued in a Seoul court to obtain royalties for unauthorized publication of a North Korean work. Of course it should be noted that the likelihood the royalties in any of these cases will make it to the hands of the artist. All it really amounts to is a hard cash grab on the part of North Korea.

Of course this may raise some interesting legal questions if anybody wants to press the issue. On one hand, if the North, and its IP, is recognized as a legal entity owing IP in South Korea, could a third party sue the North in a South Korean court for IP infringement.

Moreover if anybody wanted to be really cheeky, a couple years ago the Korean teachers union put out a book which was proven to be copied North Korean propaganda, and such publication was probably not authorized (I believe such would be tantamount to violating the South's security laws). Anybody want to put the teachers union an embarrassing position?

Transsexual Copyright

2007-06-26T22:17:00.001+09:00

Korean transsexual celebrity Ha Ri-su is having trouble with pirated versions of a film she made as part of her 2002 nude photo album.

What is interesting is the game website handed over the IP address of the poster of the pirated version. She then reported it to the police. Seems like the sites and ISP's may be a lot more accommodating of outside requests to ID pirates if this is any indication, contrary to the rumored "fights" that may occur with the new copyright laws.

Seoul Court Halts Daewoo's infrigement of LG

2007-06-26T19:14:00.000+09:00

In an a story in my back log, the Seoul Central District Court has issued an injunction to stop Daewoo from making and selling some of its Klasse brand clothes washers for allegedly using an LG patent:

The court said that one of the patented technologies that LG had applied to its Tromm washers was used by Daewoo without paying any patent rights. The technology in question involves attaching a motor to the side of a drum-style washing machine, which supposedly reduces noise and vibration.

While I do not know, this may be a pretty blatant infringement. Korean courts rarely give out injunctions in marginal cases in my experience. Daewoo may want to give some thought to settling.

Samsung targets IBM, but with a squirt gun?

2007-06-22T16:15:00.001+09:00

There is an interesting dichotomy between the US and Korea in one area. For the past 14 years the only way it was guaranteed that the word "patent" would be mentioned in a newscast was an offhanded comment to wrap up the business or technology segment with a line like "IBM was ranked first by the US patent office for the most applications last year…"

The annual story is mirrored in Korea, but takes the form of two stories. One, "Samsung ranked second [or third, or fourth] in the number of patent filings in the United States, just missing the leader IBM by….". The local focus is understandable, but then there is the second article that reliably pops up sometimes before the next ranking. This one usually goes "Samsung plans to be the top US patent applicant in two [or three, or ten] years…"

The Korea Times has translated this year's version of the second story into English for the world to see:

Samsung Electronics has set an ambitious goal of ending IBM's 14-year dominance as the United States' top patent holder within two or three years, its patent manager said.   

The versatile electronics maker was the closest rival to IBM last year, receiving 2,453 U.S. patents against IBM's 3,651. And it won't take too long to take IBM down from the throne, said Lee Dong-geun, general manager of Samsung's intellectual property strategy group.  

 "We will soon be competing with IBM for the top place. In two or three years, we will produce more patents than IBM,'' Lee said in a recent meeting with reporters in Seoul…The number of U.S. patents is one of the most frequently used indicators of a firm's technological competence.

That last one is the key to why all this ink in spilled about Samsung's plans. It's a product of the economic nationalism in Korea and the need to be seen as number one. In this case the assumption is, if you lead in patent applications you lead in innovation. If only that was the case.

Consider this line from Mr. Lee, Samsung's patent head, in the same story above:

"We still pay more royalties than what we receive. I think we will be able to break-even around 2015,'' he said, adding that a single laptop PC, for example, is built on more than 1,000 patents that needed to be paid royalty

A line like that really makes me question what is the VALUE of the patents Samsung has been filing. To boil this down, who would you consider more innovative, the guy who has 100 patents and gets US$1 in royalties for each, or the guy who has 1 patent worth US$100 in royalties? I would lean toward the latter.

In addition to this, consider this 2004 interview in Managing Intellectual Property by one of Mr. Lee's predecessors, Han Kap-tae. This is the way he spells out Samsung's patent strategy:

At one time, when we received a patent claim from another company, we did not have any idea how to deal with the situation. It was quite natural that our strategy was focused on how we could pay less. But now we have a relatively good patent portfolio. This means that we can counter-claim against other companies, which leads us to have more cross-licenses. We changed our strategy to become more aggressive. We think that having good patents is the best strategy.

So Samsung's definition of a "good" patent portfolio is not one lucrative in royalties, but rather one that serves as a good defense against competing patent claims brought against it.

A bit of circumstantial evidence indicates this is still Samsung's model. In the past few years Samsung signed a number of bilateral patent pools with companies around the world, such as Sony and Microsoft. These pools can easily be interpreted as a defense similar to what Mr. Han was describing.

Finally, consider the recent Business Week "Innovation" cover story. In one of the articles they discuss the use of patents, and how applicable they are to measuring how innovative a company actually is. To its credit, Samsung actually ranks very high in a cited Boston Consulting Group survey measuring how often other patents cite the patents.

This is good news for Samsung, but a detail gives me pause:

Even though technology patents, which protect functions, are far more common in number, the five most-cited patents for the top two companies on our [2006] list—Samsung Electronics and Nike—were all "design" patents. Design patents only cover an item's look or form.

Now this may seem like a denial of some pretty strong evidence in Samsung's favor, however Nike is pretty far from the top of the USPTO "biggest filers" list, which reinforces my initial reaction that being on the top of the list is a hollow achievement. More over consider Samsung's actual target…IBM.

IBM was never known for its design prowess. Yet it is consistently recognized for being one of the most innovative companies in the middle to late 20th Century, and even arguably today. One of IBM's cornerstones was technological innovation, yet design innovation was relegated to boxy vs. angular. Even today, IBM's patents are more technical in nature than design, not to mention their actual physical product line-up is almost laterally a shadow of itself.

So if Samsung does unseat IBM, I expect the local press to crown Samsung as "World's Most Innovative". However given that effort was based on design patents and technological patents with limited market value, I will need a mine, not a grain, of salt to swallow it.

As Qualcomm's problems hit Korea, will it create more problems?

2007-06-14T13:13:00.001+09:00

There was much debate in Korea last week on the effects of the recent Qualcomm/Broadcom ITC ruling, which may lead to the banning of the importation of Qualcomm products using specific Broadcom technologies. Korean being a major phone maker, exporter, and licensee of Qualcomm technologies are due to be hit somehow. Financial analysts are pessimistic, but manufactures are less so.

What is interesting to note is Korean phone makers have a contingency plan according to the Dong-A Ilbo:

An official from Samsung said, "A consortium of domestic companies has developed chips that do not use the patented technologies of Broadcom. Cell phones with these chips inside are being tested."

Another official from the industry said, "Cell phones that had been approved for import already will be exempt from the ITC's import ban. Cell phones with new chips will be manufactured by this month and will make their way to the U.S. with no problem."

This is a bit interesting. Since the new chips do not "use the patented technologies of Broadcom", they are not paying royalties to the company. Which means this may create another target for Broadcom to go after. Might get ugly.

Did a trademark really sink Rain?

2007-06-14T12:34:00.001+09:00

In a battle among obscurities for a place in American popular culture, a Beetles cover band "Rain" has filed with a Nevada court to stop Korean singer "Rain" from playing in the US under that name. Specifically, its the owner of RAIN, US registration number 1572476. The mark claims a first use all the way back to 1979. The Chosun Ilbo article insinuates that the case has pushed back the Korean Rain's US tour.

While I doubt the Chosun is correct (a bit of a long story), what I find interesting is Rain's folks seemed to be well aware of the US trademark conflict. In 2005 the Korean Rain's management firm JYP Entertainment filed for a trademark RAIN in the US (application no. 79022529). That application avoided claiming class IC041 (music performances) for which the US Rain's mark was registered in. JYP dropped the application once Rain defected to his current management company, Star M. Why this known problem was not handled with before hand baffles me.

Samsung seeks ITC action

2007-06-14T11:33:00.001+09:00

In another sign that the US is becoming the IP battleground for the world, Samsung brings two cases to the ITC against Japanese chip firm Renesas.

Pernod Ricard fights Korean Counterfeiting and Adulteration

2007-06-14T11:24:00.000+09:00

The Korea Times mentions a new way Jinro Ballentines, Pernod's local unit, is trying to fight counterfeits and adulterations in their brand "Imperial", one of the leading local "Scotch" brands:

In particular, the new Imperial presents a different kind of "product guarantee'' device, called OK Mark (Original Keeper Mark), in addition to its famous ``Keeper Cap.''

When the laser-printed four-digit number on the cap and cap sealer of each bottle matches the last four digits of the 10-digit product code on the label, the bottle is guaranteed to be genuine Imperial, according to Jinro Ballantines.

What is interesting here is "Imperial" is a pretty local brand, it is not exported to my knowledge. I am surprised the specific label has attracted counterfeiters (rather than the flagship and higher margin "Ballentines").

Korean Police comment on Enforcement

2007-06-07T14:04:00.000+09:00

The Korea Times has a very vanilla piece on an impending OCED report on IPR infringement worldwide. No comment on what specifically it will say about Korea however. The article does have this last little part which I guess "localizes" the piece:

But regulators of counterfeit businesses say that buying and selling fake goods within the local market have sharply declined recently.

"Those in the business are realizing that the risk isn't worth it because once they get caught, the penalty and other punishment is far too harsh compared to the profitability,'' said an officer at the Yongsan Police Station.

Itaewon and Dongdaemun, which are well known as hot sports for abundant knockoffs, are less frequented by shoppers, he added.

At least the first part is true, overall fake goods have declined overall. I beg to differ with the "officer at the Yongsan Police Station" however, penalties really have not changed much in the period of the decline (unless of course he means something ridiculous like over the last 30 years). What's really changed is more companies are making the police act, before all they did (and still do unless prodded) is sit and ask for the Korean equivalent of another doughnut. (and don't get me started on actual penalties handed out! I could rant forever).

Also the two things together bring up something interesting. While the fake problem may have alleviated (and thats a big MAY) in Iteawon and Dongdaemun, its says nothing about the recent growth in Namdaemun, Myongdong, and guerilla operations. Moreover, the fact that Yongsan Electronics Market (under the obvious jurisdiction of the quoted police officer) is still a huge market for counterfeit media and some electronics.

User Generated Content (UCC) gets "guidelines"

2007-06-05T11:25:00.000+09:00

The Ministry of Communication (MIC) has drafted "guidelines" for user generated content, more popularly referred to in Korea as User Created Content (UCC). The guidelines have been disclosed for the purposes of public comment, and the final version is expected to be announced at a government sponsored "Dynamic Korea UCC Festival" (note link may not be related, but you get the idea).

What makes it worth noting here is the "guidelines" clearly state that user generated content should not use copyrighted works without permission. While these guidelines do not have the force of law (thus the quotation marks), it is a good sign. Further I hope these guidelines could be sited in conjunction with copyright law to assure compliance or supplementary evidence in infringement cases. In particular on this point, the way I poorly read the guidelines in Korean it may be used in conjunction with the new copyright law since it implies ISP's may have responsibly in this matter (note #9 below). Last, while this all may be a marketing stunt by the MIC, I hope that these guidelines could be incorporated by the MIC into government sponsored investment programs, support programs, and regulation schemes. Keep your fingers crossed on that one.

Incidentally a last couple points. The MIC says that "more than half" of internet users have created user generated content. Considering the internet using population by the MIC in other gloss promo's is almost 100% of the population, I find resulting 25 million figure hard to swallow. The MIC also trumpets that the guidelines were developed by "a special 15-person research team composed of industry specialists, legal experts and academics that has conducted meetings and workshops since January". Well here is my poor translation of the 10 guidelines as published here:

1. Internet users must uphold the basic virtues of the democratic society that is the foundation of the Internet.
2. Content generators must recognize their large role and impact in maintaining public order.
3. Content generators have a responsibly to respect the privacy rights of people.
4. Generated content should not lead back to other media (photos, images, etc.) which have a hazardous impact on internet users [the content should not link to porn, gambling, etc. - Dram Man]
5. Content generators should respect copyrights
6. Content generators should not produce work which can endanger and break society
7. Content generators should use truthful information and be truthful
8. Content generators should be responsible for the impact of their work and must apologize for any harm caused.
9. User generated content should benefit society and inappropriate content should not be circulated
10. User generated content should be original, novel, and be distributed freely so as to create a productive user generated media culture.

If anybody wants to correct my translation, please do. I know its only one level up from Bablefish.

KSR and Korea

2007-06-04T11:22:00.000+09:00

While I cannot read the full article, the Intellectual Property Watch website discusses the effects of the Teleflex v. KSR case in relation to future EPO practice. Its notable here since the heavy cooperation and exchange efforts between the EPO and KIPO have breed a league of patent examiners that favor EU style claims. While it may take some time for the ripple to be felt here it will if the EU makes changes, it will get here.

Korea big Coach Counterfeiter?

2007-06-02T18:07:00.000+09:00

I was interviewed recently by a US reporter about how to spot fake goods. He pointed to a sample and asked, "How can you tell this is a fake Rolex?" I said "You mean other than the fact you bought it for US $60 out of a shoe box kept under the counter?".

Anyway this article brings up a lot of the signs of counterfiet mercahnsdise. What attacted my attention was this line:

How about the made by tag? Coach does have bags made in China. But Coach does not have handbags made in Korea.

Why did he pick Korea of all places? Was it just random choice based on reputation, or does Coach have a particular problem here? Interesting.

LG Patents MP3 Washer

2007-06-02T17:55:00.001+09:00

In a case of an overzealous patent department, LG has filed for a US patent for an MP3 player/washing machine.

Rumors of Internet Death are Exagerated

2007-06-01T16:19:00.001+09:00

At first I dismissed this story as a factoid. Then there was some rumor mongering about it. Now its an exaggeration in full bloom. The story, and I mean that literally, is the "death of the internet in Korea!" (insert jarring chord).

As stated before, much of the "controversial" FTA provisions are covered upcoming changed to Korea's Copyright Law anyway. In other words, the FTA will do NOTHING to change Korea's law on the matter. Here is the "Alarming" text about the FTA via one of the above links:

"The Parties agree on the objective of shutting down Internet sites that permit the unauthorized reproduction, distribution, or transmission of copyright works, of regularly assessing and actively seeking to reduce the impact of new technological means for committing online copyright piracy, and of providing generally for more effective enforcement of intellectual property rights on the Internet."

"Korea also agrees on the objective of shutting down Internet sites that permit the unauthorized downloading (and other forms of piracy) of copyright works, including so-called webhard services, and providing for more effective enforcement of intellectual property rights on the Internet, including in particular with regard to peer-to-peer (p2p) services."

Now while I cannot find the english language version online of the changes, I have found a summary written by a local Korean law firm Bae Kim and Lee about the changes in the Mondaq database. Thankfully, or not depending on your perspective, all the folks at BKL do is just rehash the law so. So compare the FTA text above with the changes for Korean Copyright Law effective July 1, 2007 and passed by the assembly well before the FTA was finally negotiated:

Article 2, subparagraph 7 of the Copyright Act has been amended to cover the public transmission right "to transmit or provide for use works, etc. by wire or wireless communications for the public to receive or access them". Additionally, Article 2, subparagraph 11 now includes, as a type of the public transmission right, the right of digital voice transmission, which means "public transmission of voices in a digital mode through an information and communications network to be commenced at the request of members of the public (other than general transmission)"...
The Copyright Act now includes provisions concerning the obligations of specific types of internet service providers (ISPs) to protect and cultivate the cultural industry. Under the newly-added Article 104, ISPs primarily engaging in services intended for peer-to-peer transmission are obligated, if requested by relevant rights holders, to take technical actions to intercept illegal transmission of copyrighted works or other necessary actions.
Article 103(2) of the Act also stipulates that if any person whose copyrights are infringed has requested the infringing ISP, through proving the infringement, to suspend the reproduction or transmission of his works, the ISP is required to suspend the reproduction or transmission without delay. Moreover, the new provision requires an ISP that suspended the reproduction or transmission of copyrighted information to notify the relevant rights holder who applied for suspension that it has taken place.

Now the above would possibly make the ISP criminally liable for failure to block access to the infringing material, and if guilty conceivably shut down by either by the courts, private settlement, or just simply by the financial demands of the case. And that shut down is exactly what would be required under the FTA.

That leaves the question, if its going to happen anyway, why go through the time and effort to make a stink in the press. At the Marmot's Hole, where I blog occasionally, one contributor picks up on something a bit insidious, the group that made the initial press release is one of the well known anti-American groups over here. Accordingly, if you look beyond the provocation you can find some rather nutty language in the original release:

These provisions can be easily invoked by authorities to justify surveillance and outright censorship on political, cultural and social grounds. Memories of such a society are still fresh. Koreans fought hard to free themselves from long decades of authoritarian rule (much of which was at least indirectly US-supported), establishing one of the worlds most vibrant democracies. Human rights violations were common and severe as recently as 1992, though human rights and freedoms are now largely guaranteed. Civil society groups say they are not about to let US commercial interests open the doors for a new authoritarianism.

According to this group enforcing copyrights is a human rights violation! It's just another way for the US to subjugate Korea and return to authoritarian rule! Oh the humanity!

I know the blogosphere is a bit flaky, but some of the more respected places like Boing Boing should really read things in full before going off half-cocked.

At least he didn't try "Rally Monkey"

2007-05-30T18:06:00.001+09:00

One of the invaluable blogs I read is the Trademark Blog, due to him I was forced to take a closer look at a case involving the time I grew up literally a couple blocks from the California Anaheim Los Angeles Angels of Anaheim. To my surprise a recent UDRP decision denied the transfer of "Angels.com" from a Korean national to the team.

As I do with any person who is a possible squatter/bad-faith registrant, I immediately plugged in the Korean's name, Lee Dong Yeon into the Korean trademark database. Now while it was tricky to prove bad faith, if indeed there was, on the part of Mr. Lee it is interesting to note the man, at least, filed in Korea for the mark Sandy Lyle for golf. Hmmm...

KORUS FTA IP Changes

2007-05-28T13:27:00.001+09:00

As soon as I find some time I plan to comment a bit further on this, but the Korea Times has a list of some of the IP provisions in the KORUS FTA. One thing to note in passing is that many of the copyright changes will be changed by the Copyright law revisions coming into effect this year.

New Korean Copyright Law To Increase Muzak

2007-05-28T12:18:00.000+09:00

The Korea Times notes an interesting side effect to the new Copyright Law in Korea:

As the revised music copyright law takes effect next month, stores will be banned from playing any illegally downloaded music, which introduces an up and coming market of background music providers.

"We're expecting to see sales rise as business owners don't want to run into any legal issues,'' said a PR official at KT Shopcast, a music provider for enterprises of all sizes.

Female Smugglers Rising

2007-05-25T20:54:00.001+09:00

In either a food for thought, or simply trivial, a dispatch the Joongang Ilbo comments on the growing number of women smuggling largely counterfeit merchandise into Korea:

The number of smugglers entering Korea is up 52 percent in the last five years and young, female smugglers are on the rise, the customs service reported.

The Korea Customs Service said yesterday the number of smugglers rose to 5,433 in 2006 from 3,574 in 2001. The most smugglers were in their 40s in 2001, but in 2006 smugglers in their 30s or younger were the largest group at 38 percent.

The number of male smugglers rose 16 percent, but the number of female smugglers jumped 40 percent. In 2006, female smugglers made up 22.7 percent of all smugglers. The products smuggled included original and fake luxury goods and gold bars.

"With high demand for luxury products, young people are trying to strike it rich selling counterfeits as original products," said Kim Su-won, an employee at the research department at the service.

The customs agency said that with the development of the Internet, young smugglers are selling counterfeits through Internet shopping malls or auction sites.

Google Accused of Copying and Recruiting Korean Spies

2007-05-25T14:26:00.001+09:00

The Korean media is a twitter about aspects of Google's Korean business practices:

Google is accused of imitating Korean services after the world's top Internet search engine came up with a pair of applications similar to those of local Web portals this month.

Two recent Google introductions suspected of this are a "universal search'' unveiled last week and a "daily list of 100 fastest-gaining queries'' disclosed this week....

That is what Korea's so-called integrated search, which was launched by the country's primary Internet portal Naver midway through 2000, is all about.

The real bombshell was in the Financial News, which is translated via the JoongAng Ilbo. Google may be recruiting people to spy on companies:

Local media are also accusing Google of trying to convert researchers into industrial spies.

The Financial News quoted two employees, both of whom worked for local Internet companies.

One employee, who declined to be identified, said that in an interview for Google Korea's research and development center, the interviewers asked about the details of the program the employee was working on. Another worker said that Google Korea interviewers asked about the problems of search software as well as other questions on key technology. The interviews took seven hours, the worker said. Both sources said that, after the interviews, they felt like industrial spies.

Google's interviewers also allegedly told applicants that if they submitted the names of the five best developers in their company, that would give them an advantage in recruitment.

The first one seems more like sour grapes of a competitive market. Perhaps the real question is not why Google is doing it, but rather if its such revolutionary competitive edge, why hasn't Naver been able to bring it outside Korea. The last one thought is rather interesting, if not troubling. Is another trade secret theft scandal in the works?

Plagiarism in Korean Academia

2007-05-25T14:05:00.000+09:00

The Dong-A Ilbo comments on Seoul National University's drive to clamp down on plagiarism in the school. In the article a number of deans and professors at Nation's top school discuss some of the cases they caught. Interestingly though is they do not really mention the punishments. Most notably is the threat of expulsion, but no mention if that indeed has ever been carried out.

Another interesting thing is how the article starts off:

Along with the increasing number of university professors who strictly discipline students who plagiarize, it has been confirmed that Seoul National University (SNU) professors have recently taken disciplinary actions against a number of students who submitted papers that were plagiarized.

One of the more disturbing dimensions to this is many students are only doing what their role model professors are doing. Most notable recently was the head of Korea University (the nations number three school) resigned once it was revealed he plagiarized some of his academic papers. A bit more disturbing in the case though was he actually won a vote of confidence from the faculty in the wake of the scandal.

And that is actually typical here. The past few years have seen a number of professors, and even government education ministry officials caught up in plagiarism scandals. I tend to discard the oft repeated foreigner theory of Korea failing to "understand" intellectual property in theory, however stories like this make me second guess my conclusion.

In researching this post, I ran across a funny little story and quote:

Ma Kwang-soo, a professor at Yonsei University, will be barred from teaching classes this coming semester due to charges of plagiarism, according to the Yonsei University Disciplinary Committee. The suspension will last for two months...Last April Mr. Ma published a book of poems that included one written by a former student in 1983, which he claimed as his own..."used the poem because I felt it was a pity that someone else's poem was going undiscovered, but it turned out to be a mistake."
Mr. Ma continued: "I thought I might plagiarize because I couldn't write poetry, but I tried it for a month and was able to write 80 poems easily. I plan to write a book this semester."

You know I could write 80 poems easily as well, it does not mean they would be any good. Further, He "thought he might plagiarize", yet by his own admission he used somebody else's poem. I wonder if he understands the concept? I also love the quote "I felt it was a pity that somebody else's poem was going undiscovered". Really Mr. Ma? It seems more you were more worried about it not being discovered as YOUR poem. Seriously how hard would it be to track down the student through the alumni network and get approval if you were really worried about only the poem being "discovered".

Popular TV and Piracy in Korea

2007-05-23T15:36:00.001+09:00

The Yonhap has a story about the popularity of US dramas in Korea. It eventually comes up with the obvious, how they get them:

Popular shows include "Grey's Anatomy," "Desperate Housewives," "Heroes," "Smallville," "House," "Lost," "Sex and the City," "Rome," and dozens more.

Even though some of them have aired or are scheduled on South Korean public networks, most of them have won their popularity through unconventional means, using the underdog Internet and cable TV.

That Internet and cable route to popularity works in South Korea, because about a third of the county's 49 million people have access to high-speed Internet connections at home and over 80 percent subscribe to cable TV.

A recent poll of 114 college students by a local newspaper showed 72 percent of them enjoy watching U.S. dramas. Forty-four percent of the viewers said they take the episodes off peer-to-peer Web sites, while 48 percent said they watch the dramas on cable TV.

A couple things about that last paragraph. Its interesting how they just lump together p2p sites with hosting services (e.g. Webhard). I wonder why. The statistics are a bit worthless for extrapolation. A sample of "114 college students by a local newspaper" is not only insufficiently large it is likely rife with possible sample errors. That aside, the numbers do not add up. There is an unaccounted for 8%, this could be DVD sales (both legal and illegal). Just a passing thought on the remainder.

Meanwhile, the upcoming changes in the Korea Copyright Law may give a good tool to copyright holders. Rights holders can request ISP to block access to infringing materials. I say may because like many laws here, what matters is the enforcement and judicial interpretation of these provisions. How long does the ISP have to act? How long must they continue to block? What forms of effective relief can be applied for if the ISP fails to act, or act in a timely manner? Anyway you get the idea. If anybody knows the answer to some of these questions, please comment (copyrights are not my regular beat).

Incidentally, much like I covered on my recent drug posting, the KORUS FTA could alleviate some of these problems. There are the obvious IP provisions, however what makes me wonder is the access. The FTA will crack open the broadcast market a bit. I wonder if this will eventually get greater distribution of US content in Korea. Thus lessening the urge, or need in some cases, to download.

The article also has obligatory quotes about how Korea is "threatened" by the popularity of such shows.

"We feel threatened," said Park Jin-suk, a producer at a local TV station. "But you have to admit American shows are backed by a whole different production system that is fueled by huge amounts of U.S. capital."

According to Park, a typical episode for a U.S. drama would cost about the same as a whole Korean series. Some analysts suggest one U.S. series requires an average of 25 times more investment than a Korean one.

Of course money is not everything Mr. Park in a creative enterprise. Consider all the flops are shown every year on US TV, also consider "Friends", still one of the more popular shows here, is a very inexpensively produced sitcom (not including wages obviously). However the article goes on to show there is a market opportunity people like Mr. Park could exploit:

"Too much sex," said Lee Dong-woo, a college student who watches "Grey's Anatomy," a medical drama about a group of intern surgeons. "They all end up getting connected in one way or another in a tangle of sexual relationships. Unrealistic."

"There's also an excessive display of American patriotism," argued Jeong Ji-wook, a 34-year-old company worker who watches "24," a series about a man trying to save the U.S. President from Arab terrorists. "If you're American, you're good, and the rest are just a bunch of bad guys."

On the other hand though is this article in the Chosun Ilbo cites criticism that Korean drama's are all the same, in a similar vein are Chun Su Jin's TV reviews in the Joongang Ilbo (which are delightfully redundant because Korean TV to her is redundant). Maybe Korean TV needs to be more creative to be competitive, not better funded.

LG tries to crackdown on fake phones overseas

2007-05-21T21:31:00.001+09:00

An interesting little article on LG's efforts to protect their phone designs overseas, mainly China, Dubai, and Europe.

LG Electronics discovered last month that a phone called "Diamond," an imitation of its "Shine" phone, was being sold in China and Europe via the Internet, and it moved to put a stop to sales of the product. It is currently preparing a suit against the maker of the phone.

According to the LG Group, the number of cases in which the LG brand and design was misused increased in China from five cases in 2005 to 39 cases last year; in Dubai, there was only one case in 2005, but six cases last year.

Another theft, this time POSCO and WiBro

2007-05-21T21:24:00.001+09:00

Korea's Prosecutors Office again busts a major trade secret theft. This time its at Posdata, the IT and telecom arm of Korean steel giant POSCO. To borrow from articles at the Dong-A Ilbo and Korea Times, you can piece together the story:

The prosecutors believes that three former engineers at Posdata's U.S. R&D center, including the director of the R&D center, were involved in selling the technology. The prosecution is summoning them to Korea in collaboration with U.S. authorities.
After establishing an Internet tech company, identified as [InQuadron], in the U.S. in December, Kim was fired by Posdata in March. Posdata researchers who were close to Kim then allegedly stole core WiBro technologies from Posdata by using external hard discs and e-mail starting last October to March. They then left Posdata to work for the Korea branch of [InQuadron in Bundang].

"They tried to entice 20 or more Posdata workers to steal all the source technology of WiBro. Then, they hoped to earn 180 billion won by selling InQuadron to a U.S. telecom firm,''[Prosecutor] Lee said.
However, they failed to take the stolen technology to the InQuadron head office in Silicon Valley, Lee said. The prosecution has already indicted four suspects and is seeks to prosecute three more.

One thing I cannot understand is why Posdata did not get the prosecutors involved in the original theft that lead to Kim's firing. Another thing is the valuations of the data. Posdata says the data was potentially worth about USD 14 Billion, given the researchers was only selling it for a bit more than one percent of that.

Update:

Apparently the Korean papers are a little late to this party. This site notes that Postdata filed suit against InQuadron and a Kim SeYoung on May 10th. Apparently Kim was working with Posdata as late as 2005 based on this IEEE committee meeting. Also correct me if I am wrong, but isn't "Seyoung" a female Korean name? Anyway, perhaps I should not go further given Korean internet/privacy laws about posting public information.

Lee Myung-bak, Korea's IP Defender?

2007-05-20T18:01:00.001+09:00

For those of you reading this from far way, Korea is currently anticipating its next presidential election. One of the strong candidates is Lee Myung-bak who is a highly regarded former Mayor of Seoul.

A couple days ago one of Lee's close aides, Chung Doo-un, made a rather public statement decrying the amount of IP theft from Korean companies:

Citing a compilation of data from the National Intelligence Service, Rep. Chung Doo-un of the Grand National Party said the damage was almost four times larger than the 26 trillion won in losses from industrial technology leaks from 1998-2003.

The rise "could be a loss not only to the companies themselves, but also to national competitiveness in this globalized world," the lawmaker told a parliamentary forum on the issue.

While his comments are more international in nature, and are likely a bit of grandstanding in light of the recent high profile Kia Motor's IP theft, they do raise an interesting possibility. One of the more frustrating aspects in working in and with Korea is its reticence for the government to take a diplomatic stand vis-a-vis IP issues with foreign countries. I wonder if a Lee presidency could see Korea stepping up in this regard and joining the diplomatic front against countries who serially violate IP.

Generics and the FTA, and Pfizer's small victory

2007-05-20T17:46:00.000+09:00

The Hankyoreh (the Hani, locally) that picked up on something I have been saying to foreigners here for a long time. The KORUS FTA talk about Korea's proposed "positive list" system for the National Health Insurance Service to choose which drugs reimburse is actually an intellectual property issue. Actually the Hani does not cover it explicitly, but gets pretty close. Korean IP and regulatory law does not adequately protect drug patents.

The patent laws make it easy for companies to get around. You patent a specific treatment for the drug, not the drug itself. This makes it easy for a Korean firm to produce a generic version, and claim it's for a different condition. Further the effect could be interpreted by a number of government agencies as so narrow to accommodate such generics.

In addition Korea does not provide what is called "data exclusivity" for drug trials. That is to say the millions a drug firm will spend on drug trials are not the exclusive property of that firm. Meaning the generic maker can cite the affectivity of the sponsored drug trails in order do gain KFDA approval.

To add insult to injury, the KFDA requires that domestic tests be submitted. So if you spend millions to test the drug in Europe, you have to do it again in Korea according to the KFDA. So this invested data set is even more valuable for the company.

As you can expect, this amounted to a trade barrier for foreign drug firms. In many cases a generic could come out produced by a Korean firm. Add this to the fact that the National Health Insurance Service could add that cheaper generic to the positive list and not the proper rights holder, you have a situation where a huge market is shut out the company.

The recently concluded KORUS FTA was to deal with some these issues. The linked Hani article discusses how some companies are acting or reacting according to the changes. Also talked about in the news piece is the fact some companies are trying to use existing law to stop some of these shenanigans with varying success.

An interesting little final note is the Hani's mention of Anguk's production of a generic of Pfizer's Novasc. A couple months ago Seoul District Court ruled that Anguk's generic did violate Pfizer's patent on the drug. The court ruled that Anguk's version of Norvasc using a different type of saylatic salt had no noticeable differences from the stated effects in the patent (please excuse the chemical spellings if wrong). I do not know how broad or narrow the patent or ruling was, and this matter will likely end up in the Korean Supreme Court, but I thought it worth noting here.

Korea as the fake hub

2007-05-20T09:25:00.000+09:00

The EU Chamber of Commerce in Korea again bangs the gong we all know, Korea as a center for high quality IPR infringement:

To protect its international image the nation should "transition from the consumer's haven for highly sophisticated counterfeit goods to a country that has the strongest regulatory and statutory framework against IPR violators...," the European Chamber of Commerce in Korea said in a report.

There is "compelling evidence" that, as in other countries, there are links between small and medium-size counterfeit shops and gangs involved in money-laundering and drug trafficking, the chamber said.

Nothing new here really, like I said its a gong we all know, just noting it.

Korean Piracy? Whadda’goin’do?

2007-05-18T14:46:00.001+09:00

The recent BSA survey on global software piracy supports an answer I give to a common question on IP in Korea, "If Korea's IP regime has changed so much in the past few years, why are violations of copyrights still common?"

One feature of the Korean system is that a rights holder has to take a large role in getting the law enforced (in fact this is true with a lot of Korean law). Companies have to sacrifice the time, effort, and money to protect them. The problem is the payout is rarely worth it when it comes to things like copyright infringement.

For example the BSA report, as the Chosun Ilbo writes:

According to the study, Korea's software piracy rate was 45 percent, which is one percentage point less than in 2005. But Korea's piracy rate is still 10 percentage points higher than the global average, ranking it 77th among 102 nations.

So piracy in Korea's piracy problem is worse than average (or better depending upon your perspective). However consider the following figures for the value of piracy in the BSA study:

US $7,289(mil)

Japan 1,789

Germany 1,642

China 5,429

UK 1,670

France 2,676

Italy 1,403

Spain 865

Canada 784

India 1,275

Brazil 1,148

South Korea 440

Mexico 748

Russia 2,197

Australia 515

Netherlands 419

Switzerland 324

Belgium 222

Turkey 314

Sweden 313

(note: countries selected and ranked by the top 20 global economies based on this Wikipedia page)

As you can clearly see Korea's $440 million worth of piracy is not even in the top ten. So I ask you, if you were in charge of allocating resources to enforcement efforts in the World, how much money would you dedicate to Korea?

Copycat Make-up

2007-05-16T15:12:00.001+09:00

The Korea Times has a piece today about local cosmetic manufacturers packaging and naming their product in a manner similar to famous names:

Some such items widely noticed by consumers are Skin Food Black Sugar Mask, which resembles the look and name of Fresh Face Sugar Mask. The same goes for Face Shop Gel Eyeliner, which is similar to Bobby Brown Gel Eyeliner, and Etude Mascara Fixer that looks and sounds like Clarins Fix Mascara.

A problem here is most of the seeming violations are not really violations at all. Yes there is a similarity in the naming, but its descriptive in nature. In fact the name "Fresh Face Sugar Mask" is probably unregistrable under Korean Trademark Law, because it is arguably descriptive. The "expert" quoted in the KT article gives a similar comment. However, I wonder how good KT's experts are given lines like this:

legal experts advise that some resemblance can be dangerous because of copyright issues.

Actually this a trade dress, and arguably a trademark, issue. A copyright has nothing to do with it!

The more interesting quotes though are some of the consumers in the article:

Consumers welcome the resemblance local brands are offering because it opens more options for frugal shoppers reluctant to spend too much on cosmetic products.

``I know that local and foreign make-up quality can't be the same, but I think to some extent they are similar so I'm not complaining about the cheaper items offered in local stores,'' said Suh Hae-min, a 23-year-old office worker in Seoul.

Price differences vary from 10,000 won to as much as 30,000 won.

``I often buy Korean brands because they're less costly and when I have some extra cash, I invest in foundations and mascara made in Europe,'' said Kim Yoo-mi, a 26-year-old business consultant.

Now compare that to this article of the past couple days:

The Commerce Ministry announced yesterday the results of a poll of 2,809 people in 21 countries, which said if a Korean product is worth $100, an American product of equal quality would be worth $149 and a German product $155...Korean products' brand image still lacks the lure of products from developed countries. The respondents also said that when a Korean product is valued at $100, a Japanese product would be worth $149 while a Chinese product would be $71.

Now cosmetics are basically a non-cyclical product, its all the same chemicals no matter the name or inert color. So even Koreans are willing to spend much more on a similar product if its made overseas (in cosmetics at least). I could say something snarky about fakes, but let me just leave you with, perhaps Korea needs to learn brand building begins at home.

Canada Sites Korea as Fake Cigarette Exporter

2007-05-16T14:45:00.001+09:00

I have commented quite a few times on fake cigarettes in Korea, the last time being here. Apprently the Royal Canadian Mounted Police finds Korea to be a major link in the logistics chain for fake cigarettes into Canada. Seems like the Korean Customs Serive needs to try harder at the ports.

Anyway what he artice really reminds me of was a question I got from somebody, "Do you have some grudging respect for counterfeiters and the lenghts they go to?". Hard to have any respect when you read things like this:

Contraband cigarettes and tobacco that were seized in B.C. were found to have insect eggs, dead flies, mold, and even human feces! RCMP labs have been testing counterfeit and smuggled cigarettes that were seized in 2006, also found some cigarettes that were entirely stuffed with tobacco stems...Between 2003 and 2006, there has been 1,302 cigarette seizures which totals more than 177 million cartons, according to Canada Border Services Agency. The total value of those seizures was more than 32 million dollars. Typically illegal cigarettes enter B.C. via ports with China, Korea, and India as the major exporters.

Reminds me of the old line, "You got watch out what's in those things. They'll kill 'ya"

Another "program"

2007-05-16T14:33:00.001+09:00

The Chosun reports another Korean government agency is offering a piracy reward program, this time done by the Korean Fair Commission. What I wonder is if this is just more press about a program, some what neglected, by the Customs Service which has also been co-opted by the Korean Intellectual Property Office.

No matter the former or the latter, due to details I am sure it will falter. I discussed the program with a few, and found out the reward is only given if the pirates are successfully prosecuted. Unfortunately successful criminal cases in these situations are rare due the normal level of interest by the rights holder, and the aversion in Korea for aggressive action (such as filing a criminal complaint). And as a last little kiss of death, I never got a clear answer about the reward. Technically its linked (at least in the former) with the value of the pirated goods seized, however I never got a clear answer if it was based on the projected value if the products were real, the "street" value of the fakes, or the value of the products if they were sold without infringing marks.

If anybody can clarify please do. I could make a good secondary income.

CJ becomes a troll

2007-05-13T16:11:00.001+09:00

I got scooped in this by a blog I write for as well. However I think this need a bit more of a treatment.

In an interesting new development, CJ Asset Management has decided to be come a patent troll. The company is starting up a fund centered around five "wireless technology" patents owned by anonymous government research institute. I use quotes since I have yet to see the patents and the patents used in these types of cases can be a little obscure as how they relate to the technology they are being targeted at. It seem that the suits will be filed in the US, and the ITC in particular.

While I encourage such stuff, I have a bad feeling about this particular case. The article indicates that the anonymous government agency has looked into enforcement before, only to find it "unable to pursue the issue because of costs". First it does not take that much money for a few C&D's to be shot off, and if the patents are pertinent companies have already learned its easier just to pay. However if the patents in question are not remotely applicable (or if they royalty is exorbitant), its better to fight. If the anonymous institute has already pursued this and has come to this point, it does not reflect flatteringly on the quality of the five patents.

Second, I find this particularly interesting since the US is the target for the litigation. While patent issues are very expensive to litigate in the US, I find it hard to believe a US firm would turn down a contingency basis similar to the CJ offer if the research institute has a strong case.

Which leads us down a slightly darker path. If the chance of success on these cases are "iffy", what might that say about the quality of the patents. If a target of one of these suits really tries to fight, a common defense is to get the patent either narrowed or invalided completely. If such an act is taken, especially in light of the recent US Supreme Court ruling in KSR v. Teleflex, could this anonymous institute's patents be invalidated? I think CJ may be overplaying its hand.

Finally to get back to the other blog post mentioned before, the list of "targets" of the actions is rather interesting in that leaves out any Korean company. They could already be paying, or perhaps... Well depending on how this is done, it may end up feeding some of the questions about Korea's honesty regarding IP protection.

KIA's Secret Agent Men

2007-05-13T15:55:00.000+09:00

The major IP news recently in Korea is the theft of trade secrets from KIA Motors by nine current and former employees who sold the information to China. A good summary of the case, and the worry about theft in general in Korea can be found here.

I however have a profound measure of boredom for this case. A shocking amount of trade secret theft from Korean companies has been a constant low level news story for years. I commented on the phenomenon a year and half ago here. The above linked story gives a bit of an update on the NIS estimates quoted in my old post. It is also worth noting that these are REPORTED cases, who knows the numbers about the successful thefts or the foiled unreported ones? (one has to remember the "shame" to the company from such a theft).

One thing I can never understand about espionage, industrial or national, is things like this:

On Thursday, nine former and incumbent employees of Kia Motors, South Korea's No. 2 automaker, were indicted on charges of illegally transferring key carmaking technologies to China...Leaked technologies were then transferred to a Chinese automaker for payments of some 230 million won ($248,000).

So at least nine guys and US$248,000. Which means each betrayed a trust for a little over US$25,000 on average. Or perhaps more appropriate in this case, the cost of a new KIA sedan. Woefully under-compensated if you ask me.

Newly Fresh Chilled

2007-05-13T15:42:00.000+09:00

An interesting little story in the JoongAng Ilbo talks about the use of the initials NFC on orange juice in Korea:

It isn't "not from concentrate," it's "newly fresh chilled." At least that's what the makers of Sunkist NFC, the orange juice distributed by Haitai Beverage Company, are trying to claim...The name NFC appears in big letters on their orange juice sold in Korea, implying it is an acronym for "not from concentrate." However, small letters below the label reads that the juice "is a delicious blend of 'from concentrate' and 'not from concentrate' orange juice."...The Korea patent office said Haitai registered the name only as a trademark, and if it says NFC means "newly fresh chilled," then legally the firm has done nothing wrong.

I wonder who the KIPO official is, since it may have screwed the pooch on that ruling. Korean Trademark Law, Article 7, Paragraph 1, line (xi):

"...trademark registration may not be obtained in the following cases...(xi) trademarks that are liable to mislead or deceive consumers on the quality of the goods."

Now that is the more direct one, however there is more. There is Haitai's theoretical liability under the Koran competition and labeling laws, wherein one could allege misleading consumers as to the nature of the goods. This allegation would be entirely separate from the ability to register such a mark by Haitai (i.e. NFC can be registered, but Haitai could not mislead consumers in it use of the trademark).

Of course KIPO's defense on the issue could come down to two things:

1. The "consumer" defined are average Korean consumers, and they are not familiar with NFC as initials for "Not From Concentrate". Accordingly the trademark does not mislead consumers.

2. Even if the initials NFC have come to be understood as NFC, at the time it was registered they were not understood as such. In addition in this interim period Haitai has invested significant sums of money into the mark NFC, thus making it so famous that the public has associated NFC with Haitai's juice as well as what ever secondary associations (i.e. "Not From Concentrate").

Of course this is all theoretical, if anybody asked me, my first piece of advice is to forget about it. The mark has been around too long, and Haitai is too big. You might as well take US$100,000 and have a bond fire, it would be as about effective in fighting this in Korea.

Korea EU FTA stuck in "Scotch" Tape

2007-05-11T15:00:00.001+09:00

In a rather amusing turn, the Korea Times has a story today where somebody figurative smacks their head and goes "oh yeah I forgot about that". In the upcoming Korea EU FTA negotiations apparently a major issue will be Geographic Indicators (GI), a subject always dear to the EU:

Geographical identification (GI), which restricts the usage of product names to those authentically produced in the place of origin, has risen as one of the key issues in the first round of the Korea-EU free trade talks that began Monday.

With the enforcement of GI status, domestic liquor players will no longer be able to use familiar names such as Cognac (a type of brandy produced in Cognac), Scotch Whiskey (made in Scotland) and Sherry Wine (produced in Spain) on locally-made alcohol products.

Technically speaking GI's are on the books in Korea, but they were only recently enacted and so there is limited regulatory framework in place to enforce the law. To complicate things, most, if not all, of the recognized GI's in Korea are for Korean products, thus fueling charges of discriminatory and unfair trade practices. Also of related interest, as I read the press reports, it seems the recently concluded Korea US FTA specifically identified Bourbon for GI protection in some way.

Of course one of the ironic things about this is one of the leading Korean "scotch" brands is Imperial, which is owned ultimately by Pernod Ricard, a French company (as I recall its a blended whiskey of real Scotch and local "Scotch").

Comming back to it

2007-05-11T14:34:00.001+09:00

I finally got some time to donate to more regular blogging here. It's
good to be back, but wonder how long this spasm will last.

The lighter side of Korean IP

2006-10-01T12:57:00.000+09:00

For some light commedic reading, I recomend an article about an IPR seminar held in North Korea (BTW why do they always have to weaponize everything?)

Sucker bets

2006-10-01T12:42:00.000+09:00

Hyundai, Lexus Go Head to Head - Korea Times, September 27, 2006

Note a couple things in the article. One, Lexus is not a European brand as the article says. Two, according to this article Lexus's market share works out to about .6% of the entire auto market. something tells me those people are so committed to a Lexus Hyundai's efforts are wasted.

LG needing a new PR and Ad agencies?

2006-10-01T12:08:00.000+09:00

LG is under fire for a few ads recent that people claim are copies of others. Lets start the rundown of the Korea Times article with what has to be the worst quote a PR guy can give in a situation like this in my opinion:

"The commercial was not a copy. So there is nothing more to talk about" a company spokesperson said on the phone.

Stonewalling like thiusuallyly only gets a company into more trouble since the reporters start to taste the blood in waterThankfullyly this is Korea so there few problems with this tactic, lets just hope this PR guy is not slated to be promoted to a position in the US anytime soon.

In case you are wondering, here is descriptionon a side-by-side picture of the ads:

The commercial, known as "Folder-era" shows a young couple hanging out in an empty school playground of a rural village. The woman, played by actress Kim Tae-hee, folds her body flat on a horizontal bar as her boyfriend watches. Then the image overlaps with LG's folder-type mobile phone, Cyon.

A number of Internet users say that the characters and the scenery in the commercial are too similar to those of a newspaper advertisement by Mitsubishi Motors. On Friday, LG said that it has stopped airing the commercial, though that does not mean the company admits it was planned plagiarism.

You see is its obvious its not a copy. The man is wearing DARK pants and there are NO Mitsubishi cars in the background of the Korean ad.

Meanwhile LG is under fire for anopiecepeice of "work":

Earlier this month, Internet users said LG plagiarized a music video clip of "Can't Stop" by the Red Hot Chili Peppers, a famous U.S. rock band, in another mobile phone commercial.

In the Music Phone commercial, a man looks into a big round-shaped duct tube in an empty room, just like the American singers did in their music video.

Now I have not seen the two works side-by-side, but based on the rather descriptioncription it would seem LG could have easily claimed an accident much like in the above case. Leave it up to the LG PR people to step in it:

LG reportedly said that it "borrowed" the image, and did not steal it.

Borrowed it? Borrowed? When did they plan to give it back? Its about akin to a five year-olds defense of stealing a friends toy.

Tell me again LG was it worth selling in-house LG Ad to WPP then screwing them over by taking all LG business to an new in-house team?

Hot Fakes in Korea - Numbers

2006-09-30T13:12:00.000+09:00

The Chosun does a breakdown on the growth of counterfeit imports the past couple years:

In 2004, the amount of counterfeit Adidas wear stood at a mere W27 million, but in just two years that has exploded to 3,953 times that amount. Other brands that have seen major increases in sincere flattery in Korea are Piaget (133-fold increase) Gucci (99 times), Frank Muller (9.3) Montblanc (8.8) and Vacheron Constantin (8.2). On the other hand, poor man’s versions of Fendi, Versace, Celine, Tiffany and DKNY products have plummeted, presumably along with the esteem in which the originals are held.

Stalwarts Louis Vuitton, Cartier and Rolex spawned the largest numbers of knock-offs over the last three years. In 2004, the entire value of intercepted counterfeit merchandise was W205.5 billion, but through July 2006, that number jumped to an alarming W922.3 billion.

What is worth noting here is that these numbers only cover counterfeits COMING IN. The problem is that Korea is also well known as a source of origin for high quality fakes. The real numbers could be much higher.

Fun with Statistics - Is the KTX really successful?

2006-09-26T15:02:00.000+09:00

Last week yielded a head scratcher about the KTX (Korea's bullet train):

In December, rail passengers can look forward to viewing the latest movies while riding the country's bullet trains, the KTX. The "cinema train" project entails turning the first car of the train into a theater....The railroad believes movies-on-the-go will be attractive to long-distance passengers traveling more than two hours on the bullet train, at speeds of up to 300 km/h. Rail officials predict the new service will attract 2.5 million passengers a year.

OK lets work the numbers. KORAIL says the plan will attract 2.5 million a year (lets set aside if that will actually happen for the moment), this works out to 6850 people per day. To do this they will need to donate a car in the train, or about 60 seats. Now lets count KTX trains, to do this lets count number of trains between two segments both ways, Seoul to Daejeon and Yongsan to Seodaejeon (this assumes that all KTX's at least stop at Seoul area to Daejeon area, and perhaps continue elsewhere). This equals 138 KTX trips a day. This also equals a loss of 8280 seats a day as per the movie theater plan.

So we have the first problem, this will give up more possible revenue seats than it will possibly gain. Or to put the problem into starker relief, this plan calls for the use of 15230 seats a day (the 8280 for the theater plus the 6850 additional seats sold) that are not currently being sold!

Or if you want to take a look at capacity, thats 60 seats a car, 18 cars a train, 138 trips, making 149040 seats. Which means this plan will hopefully call for the use of 10% of capacity unsold on a basis so regularly that they can be assured of both the space needed for the theater and the additional riders.

Now lets look past what this probably means for KORAIL's real rider-ship, and talk about this conceptually. One of the main benefits of the KTX is the shorter travel time, or about half that of the other classes. This leads to travel times currently of about three hours to Pusan and four to Kwangju/Mokpo. The problem is your average movie is about two hours or longer, so only a few people will see the entire movie. Secondly since these are first-run, or very recent, movies I am willing to wager that few people will be willing to walk in and sit on a movie already half way through.

What does all that mean? The number of people an innovation like this would attract would be very narrow. They would have to be people who:

A. Need to travel at least two hours on KTX line

B. Start from at least Seoul, Pusan, or Mokpo/Gwangju

C. Willing to pay 50-100% more over slower classes of service (or even more in the case of the bus)

A. A free movie is enough to lure people from Air travel which they take out of time efficency or prefernce over rail transit.

Now given that airlines have reduced Seoul-Pusan service since the KTX's introduction, you could say that those remaining loyal to the airlines need some pretty strong inducements. I wonder if a movie is enough.

Regardless, it is from these two groups that KORAIL hopes to attract 6850 per day (on average) from.

In defense, if we are generous and say that KORAIL is running at 75% KTX capacity currently on average, this leads to sales increase of about 6%. Ambitious but attainable. (Then again if real capacity is less...)

Hope for counterfeit victims?

2006-09-26T14:00:00.003+09:00

An interesting thing is coming out of the plans for a new prostitution law. According to the Chosun Ilbo the new law will hold liable owners of buildings liable for illicit sex being offered under their roof.

A few months ago quite a few foreigners (obviously not familar with Korea) got excited about a Chinese case that held the overall owner of a Chinese shopping center liable for rather blatant sales of counterit mechandise by tenants. The foreign companies were eager to try it here, only to be met with an amount of patronizing. If this sex law gets past, could it be possible to lobby for the same for buildings peddling fakes?

Not your father's seller of Crest and Tide

2006-09-26T14:00:00.002+09:00

A delightful oversight on the Chosun Ilbo reminds me why I love the global economy:

The lesser-spotted Japanese cosmetics brand SK-II is at the center of controversy in Korea and China after Chinese authorities said they detected the heavy metals chrome and neodymium in some products by P&G Japan.

P&G Japan? P&G? Why does that ring a bell? Thats right kids, its Procter and Gamble's Japan division. I love the fact that not only the Korean press does not correctly identify the overall parent, but also the company does nothing to clarify its pedigree. Granted Tokyo sounds more of a beauty and fashion center than Cincinnati.

Incidentally ever wonder about the name?:

Amid the controversy, some were confused about the name and thought the cosmetics were made by an affiliate of Korea’s SK Group. But there is no relation between the two. In the coined name SK-II, “SK” means a “secret key” to clean and clear skin, and “II” means a tradition older than 20 years, the firm explains.

"II" is a tradition older than 20 years? Does this mean ten years ago the stuff was called SK-I? and twenty simply "SK"? Does global marketing in the 'natti know about this?

Dong-A learns Economics 101

2006-09-26T14:00:00.001+09:00

Homeowners Not Selling As Prices Rise

Dong-A Ilbo, December 13, 2006

Korean Firms Still Undervalued (?)

2006-09-26T14:00:00.000+09:00

Or at least that is the headline of a rather odd dispatch of a Korean Exchange report. The Korea Times/Hankook Ilbo's rationale for such a conclusion:

The nation's 30 largest-capitalized companies had a combined market value of 416 trillion won as of Sept. 21, a mere 9.4 percent of the value of the top 30 U.S. companies and 30 percent of the top 30 Japanese companies.

The comparison is so ludicrous that it almost barely worth mentioning. Then again one would think somebody like the Korean Stock Exchange would know better. Simply put you cannot make a blanket comparison like that across economies given their GDP and population. There is also a more fundamental flaw here, the idea that absolute size is a measure of worth. Data later in the article show this:

According to the [Korea Exchange] report, the return on equity (ROE) of the top 30 Korean firms was 16.9 percent - lower than the average ROE of the top 30 U.S. companies at 21.4 percent but higher than the ROE of the top 30 Japanese firms at 11.3 percent.

Since the ROE is much higher on Korean firms than Japanese firms, one can easily argue its the Japanese companies are actually overvalued, rather than Korean ones being undervalued. Another odd thing about this article, or perhaps even more disturbingly the report itself, is the way it treats PE ratios:

The top 30 Korean firms’ price-earnings ratio (PER) was 15.5, lower than the Japanese firms’ PER of 53.5. A low PER means a company’s share price is undervalued, compared with the firm’s performance. It shows that despite higher profitability, Korean firms’ share price is seriously undervalued, the KRX said.

Were to start with this slaughter of stock statistics....whooo boy! First a PE ration does not tells you little about underlying value of the company. The number is used not to find value per se, but value relative to companies in the same sector. First we have not indication that the Korean top 30 are of the same industrial composition of the Japanese top 30. Another problem are discrepancies in on each local exchange that effect a PE ratio, such as the amount of shares floated in relation to volume or even more basic things like local economic conditions (ask anybody who follow ADR's on the NYSE versus stock in their home economies). Last even if a company puts in a good PE relative to its peers, it says little about things that actually effect valuation like assets, industry profitblity/potentional, and management quality.

On that last issue, management quality I love the selective memory at the end of the article:

SK Networks recorded the highest ROE among all top companies at 45.9 (note the fact they suddenly turned away from PE ratios to show "value" -DM), ...The stock price of SK Networks soared 120 percent during the last year, the highest rate among the top businesses of the three countries.

Lets not mention that SK Networks was once guilty of accounting fraud which overstated profits, and the man convicted for fraud in the scandal is still head of SK Networks (not to mention the whole proxy fight in relation to that power struggle). I think things like that have more to do with a company valuation that some number from a stock price.

Fun with Statistics - Ms. Choi's Schooling Costs

2006-09-26T08:16:00.000+09:00

Me thinks Ms. Choi is lying:

Late last year, a 46-year-old Korean housewife in Bundang, south of Seoul, started working as a teacher at a local private cram school. But the woman, who only revealed her surname, Choi, did not take the work out of choice: It was, she said, the only way she could afford the school fees and living costs for her 16-year-old son, who has been studying in the United States for the past two years. "On my husband's salary alone, we can't afford my son's school fees and living costs, which come to four to five million won ($5,230) a month," Ms. Choi said.

Schooling her son costs US$60,000 a year? Thats more that the US's GDP per capita! Even if you add average private school fees, the amount is unexplainable. Mater Dei, a selective catholic school around where I lived in LA, only charges about US$9,000 for the entire year.

Something fishy is going on with Ms. Choi.

What's the sound of one hand clapping?

2006-09-26T08:12:00.000+09:00

Roh applauds alliance before U.S. audiences

Headline Joongang Ilbo, September 15, 2006

Spoiled Brat

2006-09-26T08:07:00.000+09:00

Daughter of KAL chairman wants better food, service

Headline, JooangAng Ilbo, September 22, 2006.

When is your IP not your IP?

2006-09-14T07:36:00.000+09:00

Welcome to Korea! You just spent millions of dollars to buy a failing Korean firm. It may have been tough, but you bought the thing. Now you own it lock-stock-and-barrel. Or do you?

If all the restrictions in Korea were not enough, there is a growing movement to restrict something else, technology. Over the past few weeks, three major cases have been put in the press about foreign companies who have the gall to buy Korean companies and their Intellectual Property and then use that IP outside Korea.

I do not want to raise larger issues about property rights, the rule of law, and perhaps cultural attitudes. However these cases should be noted as it should give a foreign investor pause as to why he is buying assets in Korea and the portability of those assets once (he thinks) he has purchased them.

In perhaps the case furthest along, a NGO and related labor unions have sued Sssangyong motor for, well, making a business decision from the Joongang:

Spec Watch Korea, a civic group that monitors foreign investors, and members of Ssangyong Motor Co.'s labor union yesterday filed a lawsuit against nine directors of the Korean car maker for allegedly stealing auto assembly technology from the company for its Chinese parent firm, Shanghai Automotive Industry Corp (SAIC).

In late June, Shanghai Automotive announced it will make Ssangyong Motor's sport utility vehicles in China through a licensing deal worth 24 billion won ($25 million). The pact sparked a massive protest among Ssangyong Motor workers here for "an unusually small amount of money" for a deal of its size.

Now I would assume that when SAIC bought Ssangyong for millions of dollars, part of that would include the intellectual property of the firm. This would include all plans, production methods, name plates, etc. The transfer cost of US$25 million, and whether or that is fair or not, is a bit of red herring if you ask me.

Moving on we now have the case of Daewoo Electronics. In perhaps one of the final chapters in the disintegration of the once huge Daewoo chaebol after the Asian Financial Crisis, Daewoo Electronics (a small piece of that) was sold to a consortium lead by an Indian electronics firm.

One would think this would be a cause to celebrate. This is a firm that has limped on long past the time a firm in the west would be taken out behind the barn and shot. It survived long enough to get a new life, and fresh capital. However that view is not the view shared by the CEO. The top paragraphs from his press conference announcing the deal:

There is no practical way to prevent Daewoo Electronics Co.'s technology from being leaked to India once it acquisition is final, said Lee Seung-chang, president of Daewoo Electronics.

Mr. Lee's remarks came at a press conference in Seoul yesterday.
Mr. Lee confirmed that a joint consortium of RHJ International, the holding company of the U.S. private equity fund Ripplewood, and India's Videocon Industries, was selected as the preferred bidder on Sept. 8.

"After the merger, 10,000 patents that Daewoo Electronics owns may be turned over to India's Videocon," Mr. Lee said.

No granted that was not the entire content of the press conference, but one has to wonder the motives behind this comments/questioning and how it was of such import that it was dwelt on long enough to be noted.

The final case is interesting somewhat due in part by the omissions by the reporter:

Korean management at BOE Hydis requested court protection in an August 8 petition to Seoul Central District Court, saying that there was a shortage of capital at the company. BOE Hydis said its situation was in part due to parent company BOE Group failing to invest in the firm. BOE Group is a China-based firm that took over the Korean firm Hydis in 2003.

Chung Nam-il, a leader of the labor union at BOE Hydis, said that BOE Group "has not invested [in Hydis] at all since 2003 when it took over the company. BOE only has an mind to drain away state-of-the-art core technologies at an unreasonably low price."

The BOE Group lent Hydis’ Advanced Fringe Field Switching (AFFS) technology to BOE’s Chinese affiliates in 2004. This year, the group’s Chinese affiliates tried to grab experts in the technology and bring them to China. This move was strongly resisted by creditor banks and the Korea-based company’s labor union. In addition, in 2004 BOE Group paid BOE Hydis 75 billion won (US$78 million) for using the technologies for 20 years, fueling controversy that the company had in effect been sold at a bargain rate.

The history left out of this article is the fact Hydis was once Hyundai Display Technologies. In other words it was part of Hynix nee Hyundai Electronics. The sale of Hydis to the Chinese firm was actually done at the behest of Korean government owned banks in order to shore-up Hynix.

In other words, the Korean government and all the stakeholders (even union leader Chung Nam-il) knew what they were getting into. They all agreed in some measure to both the sale of Hydis and the price. But for some reason its fine to buy the company to save Chung’s ass, but no to effectively leverage their assets.

Speaking of which I remember a scare tactic used by Hynix back then. When it was all but officially bankrupt, the company was desperate to keep going somehow. Part of this effort was to get more and more favorable terms from its creditors, who by this time were all government owned banks (Korea Exchange, Cho Hung, Korea Development Bank, et. al.). One of its negotiation cards was to discuss accepting a tender offer from an overseas company (with usually “Chinese” instead of overseas). Perhaps this is not a recent worry/phenomenon.

Consider yourself warned foreign investors.

Obligatory 9/11 Post

2006-09-14T01:55:00.000+09:00

In lieu of all the conversation and remembrances, I would like to relate a bit for my friends and regular readers. Perhaps its therapy for me as well.

I do not want to remember the 9/11 attacks. I do not want to hear the tapes. I do not want to see the TV news footage. I do not want to sit through a movie about it. Too painful.

The closest I got the attacks was a rather frantic phone call from a guy I barely knew. He was a business contact I knew from the States. We had a few good lunches together and had a great rapport. With hopes of keeping the contact I sent him my contact information in Korea.

It was sometime in the afternoon on September 12, which made it the middle of the night in the US. I got a call from him, it started off business like, "Er just thought I would call you..." but I could hear the fatigue and edge in his voice. The conversation turned, "You see what happened over here today...". The edge became sharper. "You know my brother worked in those buildings...". It clicked, in the dead of the night his options were few. My weathered contact information a lifeline to help him get through a sleepless night.

The odd thing, his distance and isolation in the middle of night neatly summed up my own isolation from the attacks. On that day, and subsequent days I never felt so alone in my life. It was a rather odd, feeling the pain every American felt yet unable to talk about it much, unable to have that community experience, unable to do anything about it. I just had to sit and watch in that odd mix of loneliness, fear, and anger. No, I do not want to remember that day.

More Fake Cigarettes Flood Korea

2006-09-14T01:30:00.000+09:00

The Korea Times reports on the growing number of fake cigarettes imported into Korea from "China and South East Asia"

In just a six-month period from February to July, KTRA officials found and reported to police more than 290,000 packs of smuggled cigarettes that were sold at shops in Chongno, downtown Seoul, Ha said.

"About half of the fake or illegally imported cigarettes were Dunhills and most others were popular foreign brands, with some Korean brands in the mix. If we find this much in just Chongno, imagine the amount of illicit products traded nationwide,’’ he said.

On Tuesday, police arrested 65 illegal traders who smuggled more than 35,000 packs of counterfeit cigarettes made in China through the ports of Inchon and Pyongtaek and sold them to bars, karaoke rooms, night clubs and other entertainment establishments.

Note used quotes on "China and South East Asia". Why? One thing not said to much is the fact North Korea produces and exports a number of fake cigarettes. Is the Customs Service and KTRA (Korea Tobacco Retailers Association) hiding something not to get the North mad?

Final thought I love the headline on this piece:

Fake Cigarettes Imperil Smokers

Reminds me of a joke about the warning labels put on cigarette packs in the US. "Smoking is safe for me, becuase I am a man and I only buy the packs that say they are harmful to pregnant women."

US ROK FTA - Third Round Score Card

2006-09-13T14:38:00.000+09:00

The third round is now over, and depending who you talk to little or
no progress was made. However due to all the press reports, we can
now construct a scorecard on what was wanted, and how much progress
was made. Lets look at things by sector. Please excuse the lack of
links.

Negotiation Tactics

Before the details, I want to give my thoughts on the negotiation
tactics being used by the both sides. I think part of the reason for
the significant impasses in part have to do with the fact that both
sides seem to have different styles. The Korean side seems to want to
keep negotiations compartmentalized. Korea says “we talk about
agriculture now, that’s it”, so compromises are to be very narrow in
their view. The US side meanwhile seems to want to make compromises
on a broad level, e.g. “We accept your position on Textiles, and you
accept our position on Automobiles.”

Agriculture

Little progress was made, and I do mean little. The little progress
is mainly due to both are still talking about it and the Korean
government seems to agree that their list of agricultural goods could
be revised by mid-September. It is a ray of light, but who knows if
its light at the end of the tunnel, or an on rushing train.

To clarify the current status is the US wants every agricultural good
to be imported freely by opening up the market in stages lasting 10
years. Korean meanwhile wants to protect 280+ items (284 says
Joongang, 288 says Chosun) and lift what is not included in stages of
15 years.

Of those items not on the 280+ list, little of it makes sense that
will take 15 years to be tariff free; there is not much sanity in my
opinion. Accordingly to the Dong-A two items in debate in this area
are corn and beans for animal feed. What makes Korea’s resistance a
little odd is that Korea produces negligible amounts anyway. So
eliminating this tariff right away will not impact farmers one iota.

Textiles

This is something the US is being hard on (perhaps to mirror Korea’s
stonewalling on agriculture). Korea wants the US to eliminate all
tariffs on textiles. The US basically agrees, but wants them to be
phased out in 10 years (similar to their agricultural proposal,
reinforcing my mirror idea). Korea finds this unacceptable and wants
them phased out much faster.

For some reason the Textile issue has seemed to fixate the media.
This is somewhat puzzling to me since China, India, and others are
(or are set) to become booming textile importers to the US in their
own right. Granted it is a big industry for Korea, but their face a
very competitive market in the future in the US.

Automobiles

Basically, no change. The US wants cars to be subject to a lower
tariff and a revision to the engine displacement taxes. Korea is
holding firm. Korea though seems to be offering a compromise on the
initial tariff and giving a two-year grace period on emissions. What
this last part means is not described, however clearly Korea is
holding firm in my opinion.

Despite initial word that foreign nameplate cars will be excluded
from the talks, some news reports says this issue is still up in the
air. Out of curiosity, I wonder how a Hyundai made at their new
factory in Alabama will be taxed if brought back to Korea.

Anti-Dumping

One of Korea’s more interesting issues is their worries about US Anti-
dumping and other trade protection measures. The US is firm this is
not to be discussed. I wonder if again this is firmness to mirror
Korean firmness in other areas.

Backing up this theory is I wonder if some of these measures can
actually be placed from the executive to judicial branch of the US
government. Currently once a firm is found by the Executive branch as
dumping product, companies involved can sue to get compensation. Why
not in turn just leave the determining and compensation to the court
system? Also it the companies could conceivably be protected by anti-
trust statues (granted though after Matsushita v. Zeinth this can be
dicey). Anyway, there is a fall back position to this for the US
which can be a good compromise.

On the other hand, the US may be linking this issue to the use of
government owned banks to subsidize Korean companies. Recently
government subsidies given to Hynix Semiconductor were found to
violate WTO rules. Part of the Hynix case was the company was allowed
to dump (sell below cost to gain market share) memory chips on the US
market because of these subsidies. Perhaps if Korea would agree to
change its banking sector, including the somewhat controversial Korea
Development Bank, a compromise can be found here.

Finally, the time difference may make this negotiation moot. The Dong-
A reports that the US side has to make reports to congress about
changes in anti-dumping policy six month before signing. Keeping in
mind the March to June deadline for signing (I forget the exact
date), this means that an agreement on this area must be reached in
the next couple months. If no progress is made the next round in
Jeju, this may be a dead issue.

Pharmaceuticals

As you may recall, some progress was made in a special session in
Singapore regarding Korea’s “positive list” system. In short the US
was willing to accept it if other concessions were made in areas such
as intellectual property rights, testing and access in relation to
pharmaceuticals. This seemed to get a positive reaction initially
from the Korean side.

The US likely came into Seattle ready to put this to rest.
Unfortunately this was not to be so. As further details came out from
both sides, negotiations seemed to have stalled. Or perhaps somebody
added more restrictions. It is unclear from the media what exactly
happened, but this can was kicked down the road.

Something left out of this reporting that concerns me is there is no
talk of medical devices and such being included in this. Many of the
complaints about barriers, such as regulation, testing, and even the
positive list system (as I recall) also applies to medical devices.
Is the lack of discussion simply an omission and press shorthand or
does it show a quiet compromise on the issue?

Television Market

It seems some progress was made in the TV market. The US has seemed
to have won some concession on laws limiting foreigners to a minority
share of cable TV channels.

Intellectual Property

Both countries have made the obligatory pledge to respect and enforce
IPR rights. Meanwhile the US has requested Korea to extend the time
of copyright protection from 50 to 70 years. It is expected this will
be a big issue the US will raise in the future.

Gaesong Industrial Complex

It stands as it always did, the US saying “Over my cold dead body!”

Samsung Phone Breakage Video

2006-09-11T19:07:00.000+09:00

Samsung is upset at a viral circulating the internet:

The 15-second video clip entitled "Samsung handset, easy to break at one try!’’ has been circulating on the Internet since last week. It shows a smiling young woman snapping Samsung’s 6.9-milimeter-thick mobile phone in two.

There is some anecdotal evidence that motorola may be behind the viral. Samsung says the phone must have been doctored due to the high quality plastic used in the Ultra phone in the viral. I have personally been unable to view it. Gotta find it.

Update

Thanks to a reader who found the video:

US ROK FTA - Yehaaa! Begin the Third Round Round-up

2006-09-08T20:34:00.000+09:00

The third round of the US ROK FTA talks are now underway, and with it a flood of news about what the Koreans are doing to “defend” Korea against the Americans in a agreement they “must” make that will cause Korea “pain and toil”. And the funny thing is this the language used by the Pro-FTA forces! Further more expect the anti-FTA forces to come out of the woodwork as the US makes further demands this round. More importantly the US’s head trade rep touches the third rail of Korean politics!

Speaking of pro and anti forces, something must said in passing about the protests in Seattle during the talks. An account from the Hani:

"I don't understand why our government pushes ahead with the free trade talks with the U.S., because it would be no help for our national interest," Kang Ki-gab, a South Korean opposition lawmaker, said at the rally.

Wearing South Korea's traditional cotton robe and slippers, the farmer-turned lawmaker from the labor-friendly Democratic Labor Party claimed the proposed free trade deal would only help big businesses…

"America's workers have too much experience with failed agreements like NAFTA," said Thea Lee, a policy director of the American Federation of Labor and Congress of Industrial Organizations…"The promises are always the same: more jobs, more investment, more economic growth. But the reality is always the same: jobs lost and greater inequality," she said.

Aehwa Kim, an official with the Korean Alliance Against the Korea-U.S. FTA, which organized the Seattle rally, said, "American workers will be just affected as well as Korean by low-paying jobs or unemployment, and the loss of benefits."

That must have been some protest. One person with a sign that says “FTA Takes Korean Jobs” and the other “FTA Takes US Jobs”. One has to wonder where all those jobs went. Perhaps this what Ross Perot meant by the “giant sucking sound” of jobs leaving.

Meanwhile back in Korea members of the Assembly have protested in what could be described in new fashionable way in Seoul, claiming the whole FTA process is unconstitutional:

In Seoul yesterday, 23 lawmakers, including 13 from the Uri Party, filed a lawsuit at the Constitutional Court contending that the administration had violated the National Assembly's right to ratify international treaties guaranteed by the Constitution — even though no treaty has been agreed to or signed.

The lawmakers complained that the administration was unilaterally and aggressively pushing the free trade deal without sharing information with the National Assembly or seeking its assent.

So in other words the lawmakers are saying because nobody is talking to them, their feelings are hurt, and that is unconstitutional somehow. I know it will not happen, but I hope the Constitutional Court throws the book at these guys. Any book, but preferably something big and heavy.

As expected, Korea is commenting over and over again on how rice will not be on the metaphorical table. This is part of a regime of 284 goods that they want to exclude from the treaty. As you can also expect these 248 goods happen to be exactly of the caliber that the US is eager to export, rice, beans, beef, pork, chicken, peppers, onions, garlic, fruit, etc. This impasse will likely either stall/end the talks, or if included in the pact will make it exceedingly difficult for the US senate to ratify the FTA (IMHO anyway).

Meanwhile, of the agricultural goods Korea is willing to lift the tariff on, Korea wants the tariffs lifted in 15 years not the US request of 10. All this looks somewhat silly given the Korean side also demands the US the speed up its lifting of textile tariffs to five years from the US proposed (reciprocal) proposal of 10 years.

The stalemates that hindered the first rounds, cars and drugs, are expected to continue. However, there may be a compromise in the offing in regards to drug pricing. The US recently at a side meeting in Singapore agreed to Korea’s positive list system, as long as additional steps are taken so as US drug companies are not discriminated against

(Personal note, frankly I think the US has given up the drug issue. The US proposals are laughable in that they require the cooperation of sectors of the Korean government who are not really use to cooperating with foreigners. I think it’s all a face saving measure by the US)

Remember the “Singapore plus” statement in the last round of talks? This was the Korean offer that said we will restrict 100 sectors plus a few more, same as the Korea Singapore FTA. What was outrageous about this was this was basically most of the things the US trades, services, agriculture, entertainment, etc. The issue of these services, ex. Agriculture, is finally boiling over. We start with the Dong-A:

Reports have it that Korea said it will exclude about 100 services, including electricity, postal service, legal service, accounting and medical service from opening up. Earlier, the U.S. said it has no interest in the opening up of the educational market, but U.S. chief negotiator Wendy Cutler said at the second round, “We are interested in access to Korea’s Internet education service market.”

Some of these are understandable. However it should be said that the Korean media’s ambiguity can lead to some drastic misunderstandings. For example take “postal service”, this is not get rid of the Korean Postal Service, nor allowing the US Postal Service to set up shop in Korea. It is about the domestic delivery of packages in Korea. Again from the Dong-A:

With regard to home-delivery service, whether U.S. companies such as FedEx could advance into Korea’s home-delivery service market, especially for small-sized items, is likely to be a hot issue.

This is actually a bigger issue than it may seem. One of the largest complaints about doing business in Korea, and not just by foreigners, is the cost of shipping and logistics in country. In my opinion, allowing foreign competition and with it certain amount of consolidation for efficiency sake will drastically alter the prices of most goods in Korea.

Among the other things the US wants to talk about is the media restrictions in Korea (from the Chosun):

When it comes to broadcasting, the government thinks Washington will not go as far as to demand privatization of state-run network KBS, allowing U.S. investors to buy shares in it, but the details remain to be seen...The U.S. reportedly wants Korean national TV networks to scrap or reduce a quota obliging them to fill 80 percent of their broadcasts with domestic content, and the government to lift regulations preventing cable TV channels from dubbing foreign broadcasts in Korean.

Wow, imagine the furor that will come from KBS after this. MBC may have done its chop piece on NAFTA. I expect the rest of the Korean media to pile on as more details of this comes out. All the major broadcasters have invested much money on TV production here, expect them to fight to protect that investment.

Another US requests you can read through the links in this post are change in the ownership rules of communication firms and openings of the Legal, Education, and Medical markets.

The biggest news though is Wendy Cutler, the head US Trade Rep, makes an admirable effort but ends up touching the third rail of Korean politics, the cheabols! From the Dong-A:

During the third round of FTA negotiations between Korea and the U.S. that started on September 6, local time, the U.S. required that trade related laws including fair trade laws should be strictly applied to the Korean companies including large conglomerates (known as Chae-bol) and this be clearly stated in an FTA agreement.

How about that for Cutler doing what I think would be diplomatic equivalent to nailing somebody’s balls to the wall. In other words Cutler is asking Korea to agree in writing to something everyone knows, the chaebols play by a different rules than everyone else.

Needless to say this does not sit will with Korean government (from the Korea Times):

In response, chief Korean negotiator Kim said, “The U.S. view toward chaebol is wrong,'' citing the rules of investment ceiling on funding to subsidiaries.
Officials at the Ministry of Foreign Affairs and Trade also left no room for negotiation over the U.S. demand in consultation with the Fair Trade Commission (FTC), Korea's anti-trust regulator.
“Their demand was worth no consideration,'' a senior government official said on condition of anonymity.
“We are applying the competition law rigorously to all companies. We had ignored the demand involving a crackdown on chaebol.''

And that was just the government response mind you. While a FKI statement was somewhat restrained, one can only wonder what the reaction was in the boardrooms in Korea. In case you are wondering the whole position of the FKI and the government is “Some regulations are being strictly applied, you expect ALL the rules to be applied?”. As head Korean negotiator Kim Jong-hoon notes:

Korea’s Chief Negotiator Kim Jong-hoon responded to this issue by saying, “With regard to the regulation on large conglomerates, the U.S. perspective is clearly wrong. Large conglomerates in Korea are currently subject to reverse discrimination, in terms of Korea’s fair trade law and a law that puts limits on the total amount of corporate financing.

What is really puzzling about all this is the language in the FTA is simply something like “Both parties agree to apply competition laws equally among US and Korean corporations”. All they would be doing is agreeing to an existing fact (a fact on paper that is). What would be so wrong with both companies confirming their respect for the rule of law? I think we all know the answer to that question in relation to the chaebols.

Actually I see Cutler working here. Time to ask for things that Korea would really be against to get concessions elsewhere. Or so I hope.

Finally as part of my mission to point out things that can sell the FTA I would like to point out to this in the Chosun:

The prices of major foods including beef, pork, milk and potatoes in Korea are the fifth highest among 34 leading economies. The country has become one of the world’s most expensive nations, with consumer prices soaring about 20 percent since 2000.

A comparative study on consumer price growth in 30 OECD member countries from 2000 to the first six months of 2006 showed Korea experiencing a growth rate of 20.3 percent on average, the sixth highest after Turkey, Hungary, Mexico and Spain…When Korean consumer prices are set as the standard of 100, U.S. prices stood at 180 in 2000. But the figure dropped to 148 in 2002, 116 in 2005 and 110 in June 2006. In other words, U.S. consumer prices were 80 percent higher than in Korea in 2000 but only 10 percent higher this June. British and Swiss consumer prices were twice as high as Korea with 180 and 209 in 2000 but only at 126 and 159 June this year. In Japan, consumer prices were 1.38 times as expensive as in Korea in June, down from 2.64 times.

Hmm…what can Korea do to lower food prices? Anybody?

Korea to vote on Industrial Spying

2006-09-07T11:27:00.000+09:00

A new korean espionage bill may be ready to clear the National Assembly. A new bill is needed (this will come to no shock to some of you) because trade secret theft in Korea was not a big issue until now. Actually the main reason is because Korean Law has very weak provisions for valuing intangible items. So if an employee steals a CD with a billion dollar production secret, technically speaking all he has stolen is a 25 cent CD (Yes, I am simplifying this somewhat to make my point).

It is worth noting that the new bill still reflects a historic dichotomy:

According to the bill, those who transfer or sell intellectual properties of private and public organizations overseas will be sentenced to up to seven years in prison, and/or up to 700 million won in fines. For selling intellectual property inside Korea, the punishment will be up to five years in prison, and/or a 500 million won fine. Any financial benefits resulting from the selling of the knowledge will be confiscated.

Lets read this another way, "If your Korean and steal another Korean's secrets, its no big deal."

Now what I really do wonder is how this dichotomy stands up when the secret is stolen from a Korean firm which happens to be owned by a foreign co. I want to read that proposed law if I have chance.

US ROK FTA - One Arugument For

2006-09-06T16:15:00.000+09:00

In a futile effort to help Korea point out the positives of the FTA I want to point out two stories in today’s papers.

First, poisonous produce. Chosun’s take:

Large concentrations of lead and cadmium have been detected in agricultural goods grown near closed mines….In the case of rice…lead and cadmium concentrations were above the safe level in 27 percent and 8 percent of 757 cases tested. In the case of cabbage…27.5 percent and 28.1 percent out of 367 tested cases contained higher-than-permitted concentrations of lead and cadmium. Some 1,08 million sq. m of land was found to be unsafe for growing rice and cabbage…Up to 38 percent of potatoes, sweet potatoes, spinach, green onions, corn and radishes tested also had unsafe lead and cadmium levels. The test also found other heavy metals including arsenic, copper and mercury but in a permissible concentrations.

That overviews the problem, but who’s idea was it in the first place. The JoongAng:

Since 1980, the government has been implementing a project to protect towns near the closed mines from being contaminated by heavy metals spilled out from the mines, spending 210.5 billion won ($220 million). The measures included setting up walls around the mines and removing the sources of contamination.

"Because the project was separately conducted by each ministry, the work was not very efficient and professional," said Ahn Cheol-sik, an official at the Ministry of Commerce, Industry and Energy.

So in other words the government thought it best to press land not suited for agriculture into service. In part, you can argue, due to the artificial prices given to these products because of the tariffs.

In addition to poisoned food, we have general corruption, form the Dong-A:

The police disclosed a scandal involving the Ministry of Agriculture and Forestry officials who received bribes for government awards from related manufacturers or subsidiary institutes.

Consumers bought high-priced products selected by these officials, trusting they were high-quality ones.

Now we have improperly labeled food achieved through bribery. Again one can argue such skullduggery would not nearly pay off so well if food prices were not so artificially high due to tariffs. Further, because of the restrictions consumers have little choice but to trust, or not trust, a labeling process which is now proven to be sold to the highest bidder.

While I will not make the statement that an FTA would solve the problems immediately or make them disappear for good, I will say that if consumers are given more alternatives and price points they will have an positive impact in alleviating these problems.

Trade Barrier Conspiracy Theories

2006-09-06T14:49:00.000+09:00

I found this little item interesting:

Korean Air has forbidden the use of Dell and Apple laptop PCs during flight due to the risk of battery explosion...The batteries, manufactured by Sony, were reported to have caught fire while in use on several occasions.

Not only is this interesting since I think this is a first, but also because I own a Apple Laptop. Or more specificaly, I own an Apple Laptop who's batter was recalled. The odd thing is it was an older recall and the battery was not made by Sony. It was made by LG Chemical, and had similar problems. The paranoid in me wonders why the ban all of a sudden.

(Final funny note, the LG Chem battery was replaced with one of the defective Sony batteries...sigh!)

US ROK FTA - Third Round Subjects

2006-09-06T14:39:00.000+09:00

This little dispatch on the eve of the third round of the FTA talks is of interest to me since I did not think the US side would be pushing so hard for this:

In the third round, both parties are expected to struggle over the issue of opening the door to competition with state-run companies. The U.S. team has already demanded that market rules be applied to state-run companies, and that American companies be allowed to invest in privatized state-run companies, just as Korean businesses can. The U.S. party is also expected to come out strongly against the Korean government's support for state-run banks as well as its restrictions on foreign investors in the telecommunication industry to 49-percent stakes.

It will be interesting if the US gets far with this.

Infrigement (?) - Victoria's Secret

2006-09-04T22:06:00.000+09:00

IMGP0514.JPG
Originally uploaded by Drambuie_man.

Found this in the fancy new remodeling of Yongsan Train Station. Despite the obvious mimicry of this lingerie store, its not a case I would personally choose to prosecute in Korea unless they trademarked "secret" seperately.

Infringement - Tommy Hilfiger

2006-09-04T22:03:00.000+09:00

IMGP0517.JPG
Originally uploaded by Drambuie_man.

I have seen my share of stores made to look like part of a larger brand (Nike stores in particular), but this is a litlte ridiculous.

Brouny

2006-09-04T22:01:00.000+09:00

IMGP0512.JPG
Originally uploaded by Drambuie_man.

Anybody want to guess what treat this was attached to at a local bakery?

Top Counterfeit Targets in Korea?

2006-09-03T23:59:00.000+09:00

The Chosun has an item of passing interest. It covers the most popular luxury brands in Korea as determined by Lotte Department Store and separate similar survey done by a website G-market. It is interesting to note that G-market is a small seller type site which is known for offering more than few luxury items of dubious origins. One must wonder how many fakes of these brands are circulating the market.

Finally, huge props to Procter and Gamble who's SK-II cosmetics line is named #2 on the Lotte list. Great brand building. Never rule out those marketing wizards from the 'nati.

US ROK FTA - Time to Clean Up KDB

2006-09-02T08:14:00.000+09:00

The end of a cozy club?

2006-09-02T08:12:00.005+09:00

Well its about time if you ask me! I say that not due to the facts of the case, but rather one more dismaying things about Intellectual Property infringement in Korea is how rarely Korean firms sue other Korean firms for IPR infringement, or vice versa how unconcerned they are about ripping off another Korean firm's IP. For an example of this later phenomenon look at the heavily used GS Group logo which is currently being litigated over.

A recent Korea Times piece artfully puts this disregard in the mobile phone industry as the following:

Samsung said that Korean mobile phone manufacturers are in a kind of loose partnership and it is not likely that a patent infringement would take place.

You can translate that as "We would never sue another Korean mobile phone manufacturer". Or is that true? That same article linked above refers to a behind the scenes dispute between Samsung and LG over mobile phone designs. I am interested to see how this turns out. While I cannot point to anything specific off the top of my head, Samsung and LG have been at loggerheads for some time over things like standards and more germane over the licensing fees being charged among the companies (one, LG as I recall, is charging a normal licensing fee not the "special" one Korea firms normally charge among themselves). Things could spill out into the open sooner or later.

US ROK FTA - Korean Chutzpah

2006-09-02T08:12:00.004+09:00

How are the FTA negotiations going? The US side may be silent but its hilarious to watch the Korean side spill the beans on a daily basis. The Joongang Ilbo has some detailed blow by blow negotiation points. Let me have some fun by mimicking the negotiations:

US: We need to lower Agricultural tariffs

ROK: We need to lower Textile tariffs

US: Well how about this, you take down the Agricultural Tariffs in steps of now, two, five, and ten years. Meanwhile we will do the same thing for Textiles.

ROK: We really prefer tariffs be lowered in steps of now, three, and five years.

US: Thats even better! Sounds like a deal, Agriculture and Textile tariffs eliminated in five years!

ROK: Shhhhhhhh! (Sucks air through teeth)

US: <rolls eyes knowing what's coming>

ROK: Actually we want to remove Agricultural tariffs in steps of now, five, ten, and fifteen years.

US: So you want us to accept it will take 15 years to open the Agricultural Market in Korea meanwhile you want our Textile market open in five years. That hardly seems fair, but I guess it will be fine considering we will be able to import things like rice, beef, pork, garlic, and apples tariff free in 15 years.

ROK: Shhhhhhhh! (sucks more air)

US: Now what!

ROK: Well we cannot reduce tariffs on any of those in under the 15 year program. That is to say, please look at this list of 284 Agricultural goods that we cannot reduce tariffs on what so ever.

US: So let me get this straight, we are to eliminate all Korean Textile tariffs in 5 years, meanwhile you will take 15 years to reduce Agricultural tariffs on all things except these 284 items which includes almost everything we produce?

ROK: (Big happy smile)

US: (whispers to aide) You know, I know have a new found respect for Christopher Hill.

(Note: More items noted in similar KT piece)

Court Tells Unions No Violence

2006-09-02T08:12:00.003+09:00

In another sign of how classy Korean labor unions are, they actualy have to be ordered to give common courtesy:

The court granted the university's request to bar the union from staging "unreasonable" job actions, and enjoined the strikers against using violence. The "unreasonable job actions" cited by the court include unauthorized entry to the university president's office by union members, violence and using abusive language against non-union members at the university. The court also prohibited union members from disrupting classes by making noises above 80 decibels during daytime.

What kind of world is it where somebody has to be told not to use violence and abusive language?

Lies, Damn Lies, and...

2006-09-02T08:12:00.002+09:00

This is more of a rant than a substantive post, but I want to record it somewhere so I can retrieve it again. If you want a good example of a journalist chopping up a study to fit a political agenda, the Dong-A has a doozy today.

It concerns the amount spent on medicine, note the second and third 'graphs:

Jung-gu in Daegu spent on medicine the most in the country an average of 947,400 won per person annually. The reason seems that the district has as many as 123 pharmacies with just a population of 80,000.

In Seoul, Jongno-gu ranked first (663,100 won), followed by Jung-gu (440,200). Gangnam-gu came in third (272,400) and Yeongdeungpo (254,200) and Dongdaemun (232,200) followed it. The four districts except Gangnam are thought to put much money into pharmaceuticals because they have many large pharmacies and commercial complexes.

So one looks at this an concludes this is not consumer spending on medicine but wholesale spending on medicine. However how the hell from this do they get the headline and first sentence:

Study: Wealthy Spend More on Medicine

Statistics showed that the rich spend more on medicine.

There is no linkage between income and spending mentioned in the entire article. No one was polled as to their income and spending. All on can point to is a rather weak link between real estate prices in certain wards ("gu's") and their spending. However even that is pointless given the fact the author of the "study" immediately writes off some of the priciest real estate in Seoul since they have "many large pharmacies and commercial complexes". Further this assumption implies another all other districts in Seoul do not have "many large pharmacies and commercial complexes". Finaly all "gu's" are not uniform as the assumption also implies. I remember reading somewhere that Kangnam-gu, home to some of the most expensive real estate in Korea, still has shanty towns on its fringe.

Grumble...

Actualy there is option "C"

2006-09-02T08:12:00.001+09:00

I try to avoid most North Korean commentary here, but I chuckled at this quote from the Chosun:

Nam Sung-wook, a North Korea specialist at Korea University said the North is caught between a rock and a hard place. It can either continue to suffer the economic sanctions or go through with the test, which could spell the end for the regime. "If they proceed as they have in the past and go ahead with the nuclear test, they will have passed the point of no return,” he said. "They have to be prepared to be disavowed by South Korea and China."

Mr. Nam, what about choice "C", returning to the six-party talks and giving up there nukes? Why is that not an option? Second I am not so sure either South Korea or China would "disavow" North Korea in the event of a test. And that said, I would bet China would be more likely to do so than South Korea at this point. Just look at the logic of Mr. Nam, a famous North Korean specialist at Korea University, he is convinced the North has no other choice but to give a test. Why is it impossible to doubt that others in South Korea share this strangelove-ian sympathy.

Fun with Statistics - Maybe They Should Get Math Teachers

2006-09-02T08:12:00.000+09:00

An article in the Korea Times describes a effort by the city of Seoul to hire more native speaking englsih teachers. To make my point, let me reorder the paragraphs of the orginal story:

The Seoul Metropolitan Office of Education (SOME) said yesterday it will gradually place a native English speaker in every elementary and middle school in Seoul.

Currently, there are 562 elementary schools and 367 middle schools in Seoul and only some schools have foreign teachers supported by the Seoul Metropolitan Government or funded by the school budget.

Seoul will recruit 929 English native teachers by Sept. 2008 to cover all elementary and middle schools in the city.

As part of its four-year plan to facilitate English education, the local office has already positioned foreign teachers in 100 elementary and middle schools.

“To give the opportunity to all students to learn from foreign teachers, we will recruit 600 foreign teachers,” said Choe Chun-ok, an education supervision who is in charge of recruiting English native teachers

OK lets do the math. 100 current plus 600 planned hires does not equal 929, or one teacher for every school as the city promises. Second the current year, 2006, with a four year plan means completion in 2010, not the stated goal of 2008.

Finally, if we were to be charitable assume the project ends in 2008 with a start date of 2004, that means that the city some how finds a way to hire 50 teachers a year (100 current teachers over two years). This makes the date all schools will have a native speaking english teacher is 2023. They better get hiring, I hear there is this guy in Colorado...

OK Who had Day 4,3pm in the Bet Pool?

2006-09-01T06:13:00.000+09:00

Just when you think Korean Labor unions can play like nice, you get this:

The Federation of Korean Trade Unions (FKTU), one of the country's two leading labor organizations, Wednesday suddenly walked out of the ongoing International Labor Organization’s Asian regional meeting in Busan. Some 30 representatives from the labor organization left for Seoul at 3 p.m., immediately after FKTU chairman Lee Yong-deuk told reporters of the decision. The move came in protest against Labor Minister Lee Sang-soo's remarks at a press conference in the morning, when he made public details of the government’s negotiations with the unions on the labor reform bill and said that the government will proclaim the law on Sept. 7 despite union opposition.

Again let me remind you, this is after four days into an ILO meeting that was canceled last year due to Korean Unions striking.

US ROK FTA - Break out the Hot Dogs in Seattle

2006-08-31T17:28:00.000+09:00

Seattle is the site of the third round of FTA talks between the US and Korea, and what are trade talks involving Korea without the chance of two legged BBQ's? That's right the farmers are set to go to Seattle:

More than 100 South Korean farmers and activists will go to Seattle next week to stage rallies against a free trade agreement (FTA) between Seoul and Washington, a chief organizer told Yonhap News Agency yesterday.

They say they will be non-violent and cite the earlier 50 person protest in Washington DC. I am not so sure.

First the farmers have a history of violent protests in Korea and now abroad in light of the Hong Kong arrests last year. Further Seattle has the dubious distinction as the site of the "Battle of Seattle" brought on in part, one must honestly say, by the politics in the area (to be polite). One must wonder if the 100 will combine forces with other anti-globalization groups and have a explosive synergistic effect.

I would really hate to be Seattle riot cop right now.

What the heck?

2006-08-31T16:35:00.000+09:00

A few days ago a Korean Time piece talked about a local firm suing Google for violating their search patents. I wanted to wait on commnenting on this until I saw the patents owned by the Korean company Park and Opc.

According to the KT:

In the suit lodged with the Seoul District Court, Park & Opc Co. claimed that the U.S.-based search-engine giant infringed upon its technology used mainly in personalizing an individual's search results in the Internet.
The company said that it received a patent for the technology in 2003, but Google has been using the patent for its Internet search-engine service without its permission, Yonhap reported.

So I log into KIPO's database of patents and the only patent Park and Opc recived in 2003 is:

2020030011709 - Detachable Device for Transmitting Driving Force toRotational Axis of OPC Drum

Park and Opc's other patents are for simular printing technologies, not internet search.

What the heck is going on here?

Lucky Me

2006-08-31T11:46:00.000+09:00

I want to thank who ever nominated me as part of the Asian Blog Awards. However who ever is judging this thing, the others are much more deserving.

US ROK FTA - Ivory Towers Speak

2006-08-30T17:05:00.000+09:00

I would be remiss if I did not mention a series of articles, likely put into some special section in the real paper, on the FTA. Most of them are professors and intellectuals of some stripe. Some interesting, many not so. Allow me to link with a brief review a few of them:

Financial Reforms More Important Than FTA Itself
By Shyn Yong-Sang
Chief of Macroeconomic Analysis at Korea Institute of Finance

First, I am going to call him Mr. Shin, I am declaring a personal war on tortured romanizations after Mssrs. Chough and Vark. Mr. Shin gives a good outline of the US-Singapore FTA and how it can serve as a model (or an argumentative proxy) for the Korean FTA. To me however he does not back up his headline which has a nugget of truth, many of the reforms Korea may have to take as part of the FTA will actually end up benefiting Korea.

FTA Boon or Bane for Korean Economy
Hyun Jung-taik
President of Korea Development Institute

Good persuasive article on why the FTA will be a good thing for Korea, and in reality there is little to fear. I find some humor of his rather stark assessment of the benefits of free trade most proponents avoid, some people have to loose.

FTA to Build Bridge for Future Prosperity
By Kim Sung-jin
Deputy Minister of Finance and Economy

Perhaps the big gun writing. Pretty bland Ministry of Trade and Foreign Affairs boilerplate. However I would like to point out two metaphors. The ill timed "both sides brought home the bacon", does this mean a compromise on pork imports? Second is the statement "The FTA is the new 'Silk Road'". In my six years in Korea the "New Silk Road" has been applied to the Internet, the North/South Rail link, the "Hub of Asia" plan, and oddly DMB mobile services. Find new Konglish to stick in there Mr. Kim.

Korea-US FTA Deal Faces Bumpy Road
By Henry M. Seggerman
President of International Investment Advisers

In his rather acid contribution Mr. Seggerman finds time to swipe at US immigration policy and predict a unified currency and stock market in 2050. Consider him flagged for unnecessary roughness. Also somebody wake him up, we already have a unified stock market in all but name only.

FTA Poses New Challenge to Financial Market
By Yang Doo-yong
Head of International Finance Department at Korea Institute for International Economic Policy

Mr. Yang takes 1,255 to say that the FTA presents both a crisis and oprotunity to the Korean financial industry. In other words he punted, and not very well. (BTW-Note the rather anti-FTA boxed quote the Korea Times gives.)

Meanwhile you might want to browse the rest of the articles in the business section a few more talking about the future of the Korean economy. I had to give up, I got woozy from some of the vapid hot gas exposed in some articles.

Faking Demand

2006-08-29T16:31:00.000+09:00

There is a hilarious and very level headed op-ed in the Korea Times today about the ineptitude of Korean Govrenment forecasting demand. The key graphs:

According to an agreement signed between the government and private enterprisers [for the new rail link between Kimpo and Incheon airports], the number of daily u sers for the train was forecast to reach 210,000 in 2007, 490,000 in 2010 and 670,000 in 2015.

However, the Incheon Airport Corporation views it differently. The number of daily airport users which now stands at 74,00, will grow to 80,000 in 2007, 100,000 in 2010 and 130,000 in 2015. Funny thing is that in the government estimate, the number of train users in 2010 is five times higher than the total expected number of airport users....

Officials of the Construction and Transportation Ministry belatedly explained that there was no way for them to verify what they had forecast. Another regrettable fact is that the amount of train losses to be covered by the government is only the tip of the iceberg...A case in point is the subway system. The growing deficits of subway operation in Seoul and other cities have been derived from the government failure to predict the number of users. The construction of Kimje Airport was stopped as a result of the revelation by the Board of Audit and Inspection that the demand forecast for the airport was fake.

If I can be the ultimate skeptic, should we call into question other government forecasts too?

Speaking of which, note the author relies somewhat on the premise that the Incheon Airport Co.'s figures are gospel. Given this, and his later citation of the Kimje Airport, what if they are inflated as well? Which means the rail passenger figures could be well above five times real usage of the Incheon Airport in 2010!

Frozen Babies an Trade Secret Matter?

2006-08-29T16:17:00.000+09:00

Thanks to DDA, I was able to read his translation of a Le Figaro piece on the frozen French kids that involved trade secrets. Wow! Thats an odd sentance ain't it? The things that go on in Korea I tell you...

To recap the story so far. A French man who works for a US auto parts company (unknown at this time exactly which) came home to Seoul from vacation in France in late July for an emergency meeting. While putting away a load of halibut, he found two frozen babies in his freezer. He reported the matter, and returned to France. DNA tests then reveild that the parents of the frozen kids were none other than the Frenchman and his wife. Meanwhile the couple stayed in France with no intention to return to Korea, thus exasperating the Korean police from solving case let alone charging them for the murders.

The (alleged) father of the babies, Mr. Courjault, has this Oliver Stone worth quote in the Le Figaro:

Even a plot with industrial motivations can’t be excluded, says J.L. Courjault. Employed by the local branch of an American automotive equipment company, in charge of technology transfers, in a very competitive market, this engineer could have been framed. Moreover, he adds, my unscheduled return to Korea could have interrupted someone, involved in something.” A set of keys is said to have disappeared during their absence.

Sounds like an elephant in pate feuiletee, lots of absurd layers and odd French names.

Spot the Idiot

2006-08-29T14:41:00.000+09:00

There is a dialogue that is getting humorous to me. Many people complain about a Korean movie "The Host" because it some how got placed on many screens across the nation for its opening run. Some are complaining on how this has crowded out "art house" movies. Similar complaints are made outside Korea all the time. There is added humor to the fact that recently the US got Korea to cut its screen-quota for US movies shown in Korea. The humor is now these smaller movies are being crowed out not by Hollywood, but by other Korean movies.

There's an article about the issue in the JoongAng Ilbo, which I would like to quote:

theaters that play small independent films continue to see heavy losses. After Core Art Hall was closed down in 2004, its affiliate chain, Cine Core, which played a mix of non-mainstream foreign films and independent Korean films, closed down in June due to financial difficulties....CGV, a multiplex chain run by CJ Entertainment, is currently operating "indie screens" in four locations, setting aside screens with 90 to 178 seats apiece to play Korean independent films. The company said, however, that it has lost an estimated 1 billion won ($1 million) annually and that the audiences for the independent films will be half the average occupancy of that for blockbusters....Currently, six arthouse theaters nationwide are partly funded by the Korea Film Council, which is affiliated with the Culture Ministry. But even with the support most theaters suffer major losses, according to Kim Bo-yeon, an official at the Korean Film Council.

OK so "art house" films number wise are a financial disaster for the theaters. Nobody really goes to see them. At the end of the article we get this gem:

"We know the audience for arthouse films is still there," said Song Il-gon, the independent film director of "Magicians.

Spot the Idiot!

Fashion Brand Building - Vark You!

2006-08-29T14:16:00.000+09:00

The JoongAng Ilbo has a good piece on local branding in the Korean fashion industry. Good article number one. Number two it has one of the more humorous romanizations of a Korean name I have seen:

Vark Ji-won

Inventive Logos? (Something that slipped past)

2006-08-28T16:25:00.000+09:00

A while ago on this blog (or rather in my history of blogging), I used to use the english webpage of the Korean Intellectual Property Office as a source for news. The page tends to translate things of interest that appear in the Korean press that do not make it to the English language press in Korea. However when I got my new Apple iBook, I was disapointed that Safari is not compatiable with the page and forgot about looking at it.

Since I have some time on the PC I have to use at my office, I typed up the website to browse. I found something of note, an article from the Hankook Ilbo around June 28, 2006:

In order to improve the BI (latest Konglish for logo - DM) images of our companies as well as to promote them to the global market, Hankook Ilbo created the first “Korea Enterprise BI Award” with the sponsorship of KIPO and KIDP (Korea Institute of Design Promotion). Last 29th, 4 companies (or agencies) have been selected as the winners.

The article is translated to be unclear as to find samples of one, but of three selected I want to point out something interesing.

The first is Yearim Publishing. Their logo is:

Now consider the following Korean logos:

Not such an innovative logo if you ask me.

Consider another winner, the new logo for the Korean National Tourism office:

Cute huh? Then consider this:

or

Looks familar doesn't it?

Consider the last one for Shin Won Construction:

Now consider the mark for Seo-gu (ward), Busan city:

or the more famous logo of the Minsitry of Unification:

Seems to me that none of the logos featured were that distinctive and award worthy.

That 70's Headline

2006-08-28T14:44:00.000+09:00

Trademark van set for another run

The Story Behind the Story

2006-08-28T10:37:00.000+09:00

The Korea Times gets excited about the International Labor Organization meeting in Busan:

More than 600 government officials, workers, employers and leaders from some 40 Asian, Pacific and Arab countries will gather at the 14th Asian Regional Meeting of the International Labor Organization (ILO) in Pusan from Aug. 29 to Sept. 1...The ILO Asian Regional Meeting will be held at the Busan Exhibition and Convention Center (BEXCO) in the nation's second largest city with delegates from 29 countries in Asia and the Pacific and 11 Arab nations in attendance.

Of course they do not mention a small detail, the reason why the are meeting now. Leaf through the Korea Times and you can find this gem from a year ago:

The International Labor Organization (ILO) decided to postpone its 14th Asian Regional Meeting, as Korea’s two umbrella union groups refused to withdraw their decision not to participate in it....The decision came after the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) confirmed its plan earlier that day in a joint media conference that the two groups will not take part in the ILO meeting.

Thats right, the ILO meeting last year was postponed because Korean labor unions went on strike.

Fun with Statistics - Gambling Addiction Addition

2006-08-25T15:56:00.000+09:00

In this edition of Fun with Statistics I want to look into this Korea Times quote:

The gambling industry has grown to a 17 trillion won business. If you include the 15 trillion won legal gambling industry _ including horseracing, lotteries and casinos _ the nation spends over 30 trillion won on gambling. Moreover, illegal gambling parlors are often located in residential areas.

According to a government report in 2002, 3,000,000 Koreans or 9.3 percent of adult population were addicted to gambling.

So lets compare apples to apples. According to this Joongang Ilbo report spending on legal gambling in Korea was 11.5 billion won in 2002. To calculate illegal gambling, let us assume the same growth rate (about) 30%, which gives about 13 billion won illegal gambling in 2002. Now this figure could be inflated given, as the KT suggests, the boom in illegal gambling such as "Sea Story". In any case we will use a total figure of 14.5 billion.

Now according to the National Statistics Office combined leisure and "Other" expenditure in 2003 (closest number available) was about 400,000 per month. Take that times 12 (months in the year) and 3,000,000 (the addicted), you get 14.4 billion won in what could be called "gambling demand".

What is interesting here is that these 3 million people are NOT overspending on gambling, rather they are spending pretty much exactly how much an average Korean spends on leisure and discretionary items. They are simply doing it a different way. These 3 million are not say gambling the grocery bill, or the electric bill.

Now keep in mind the assumption we made about the growth of illegal gambling in relation to legal gambling. We stated the growth rates were the same, which as I mentioned may not be case since the KT intimates that illegal gambling has boomed in relation to legal gambling. If the KT is correct, this would mean the illegal figure, and therefore the overall figure, is less. In other words, in light of the assumption, the 3 million people were gambling an smaller proportion of their leisure and discretionary spending than the 100% indicated above.

This begs two questions. First, is there a substantial differences in gambling addition between income levels in Korea? All these stats are "on average" so such an imbalance could be covered up by the statistics. Second, how were these 3 million people classified as "gambling addicts", in other words I call BS on the 3 million figure. For what its worth the National Association of State and Provincial Lotteries cites a Harvard University Study that places "gambling addiction" in the US and Canada at less than 4% max. This is much less than the 10% stated above.

Finally, as part of my research, I found a self diagnostic question on Gambling addiction:

I have felt regret over my gambling. (agree/disagree)

You bet I have. I really regret betting on that 4th horse in the 6th race at Santa Anita a few years back!

US ROK FTA - Have the Koreans Given Up

2006-08-25T08:13:00.000+09:00

A couple stories today indicate that perhaps even the Koreans have given up on reaching an FTA with the Americans. First, and most damning, is a Korea Times quoting the Minister of Industry Commerce and Energy:

In a meeting with newspaper business editors Wednesday night, Minister of Commerce, Industry and Energy Chung Sye-kyun said, "We could choose the EU as the primary negotiator for an FTA if the talks with the U.S. linger too long.”

However Mr. Chung goes on to expand with a profundity that makes me wonder if he does not know his ass from a hole in the ground:

Chung said Korea will not hasten negotiations, although the Bush administration's Trade Promotion Authority (TPA), given by the U.S. Congress, will expire on June 30, 2007. "Should the talks face hurdles, an extension of talks would be possible (regardless of the TPA).''

This man expects to do an FTA with out "fast-track" authority? You gotta be kidding me! What ever is agreed to at the table, the US Senate is sure to butcher it to something unrecognizable. For instance just yesterday Michigan lawmakers tried to score some cheap political points, without "fast-track" their views can actually make it into an FTA. Does Mr. Lee actually want that to happen?

Mr. Lee continues with the nuggets of wisdom:

He also said there is a possibility that U.S. would extend the maturity of President Bush's trade-related right.

Does Mr. Lee actually think that in the midst of the war on terror Bush is going to invest the political capital necessary to renew "fast-track" just because Korea won't come to a decision? This goes beyond narcissistic and crosses into smugness. Bush aint going to do anything for you Lee, and not only that if your counting "fast-track" with whoever is elected in 2008, that is a close to rolling the dice as you can get.

Mr. Lee's comments make me seriously wonder who the hell is advising the Korean leadership in regards to an FTA, and more specifically the political climate of the US. Its like they get all their information of the US government from 70's vintage Schoolhouse Rock shorts.

While we have Mr. Lee jumping off the US ROK FTA bandwagon, we have the GNP using a meeting on the FTA to score cheap political points:

President Roh Moo-hyun is scheduled to hold a dinner meeting with lawmakers working in the National Assembly’s special committee on the South Korea-U.S. free trade agreement (FTA) at Chong Wa Dae today...But the main opposition Grand National Party (GNP) boycotted the meeting, citing the inopportuneness of the event as the nation has been embroiled in a scandal over the “Pada Iyagi,” or “Sea Story” video gambling games.

Classy guys, a momentous opportunity for Korea and all you guys can do is skip out on a strategy session so you can remind the national of a scandal. Classy...

One can say this is just the usual domestic politics in Korea. However I a bit disturbed due to the fact Korea has constantly talked about the need for internal dialogue to "sell" the FTA, yet the GNP thinks sticking it to the president is more important. Could this very well be the simple fact that the FTA is not nearly as important anymore and the rats are leaving the ship?

US ROK FTA - Marketing Help

2006-08-24T16:57:00.000+09:00

The Hani publishes a well know secret in the legal field in Korea, the fees charged by Kim and Chang (the dominate law firm in Korea they way King Kong was dominate on the streets of New York.

So what might lower Kim and Chang's fees. Hmmmm....let me think. How about opening the legal services to competition in Korea via the US ROK FTA? Not that Hani will mention such an idea. Neither will the Korean govrenment for that matter. They would likely issue instructions on how Kim and Chang has to "defend" themselves. Thats how the ROK sells an FTA in Korea it seems.

Anti-Consumption or Anti-Import

2006-08-24T16:40:00.000+09:00

A few weeks ago I did a post on Anti-Import bias in Korea by siting the begining of the latest media craze, the "doenjang-neyo". In a new story in the craze, I would again like to point out the distinct anti-import bias this craze has:

Earlier this month, Sisa Journal, a domestic weekly news magazine, published a full-length story on the recent doenjang-nyeo craze. In the article, titled, "What we don't know about real doenjang-nyeo," two young women were mentioned as examples.

A 25-year-old "Ms. Kwon" was described as a shopaholic who habitually bought foreign brand clothes and undergarments whenever she flew abroad, and a 23-year-old "Ms. Shin" was introduced as a Starbucks coffee addict. The article identified them by their full real names, and published clear photos of them sipping coffee.

The women had little idea what would happen when the article was released on the magazine's Internet edition. The two were bombarded with online comments about "how vain" they were and that they were good examples of how some thoughtless girls could "wring money out of their rich parents to waste it abroad."

Again notice the gratitous attack on "foreign" consuption and money spent "abroad". The complaint here is not just consumption, but in someway on how consumption of non-Korean items is espeicaly wrong.

In case you wonder more, consider this handy guide from the Joongang Ilbo on how to spot a "doenjang-nyo":

A typical doenjang-nyeo is described as a foolish female who has no time to eat kimchi for breakfast at home but drops by a brand-name doughnut shop instead to have a cup of black coffee ― in fear of gaining weight ― while still chowing down on raspberry-filled doughnuts, sitting in front of the shop window to show that she is patronizing international chains.

During the day, she carries around a designer tote bag that isn't big enough to hold her schoolbooks ― it just looks prettier to carry thick books in one arm and the purse on the other. She sweet-talks her nerdy male classmates into buying her lavish dinners where she takes photos of herself (alone) and gleefully uploads them on her Cyworld blog at night.

She often carries around an empty Starbucks coffee cup to help her look more like a New Yorker and keeps sending text messages to her friends, asking such important questions as "Where did you buy that pair of shoes?"

Again, notet the attack on imports, not to mention the scandalous attidude of choosing dounuts over Kimchi at 7am. This whole trend is clearly not just about excessive consuption or even materialism in general.