In this blog post, we will look at the differences between the concepts of patents and know-how, and the advantages and disadvantages of each protection method and how to use them as a technology protection strategy.
As technology has advanced, the value of intellectual property rights has increased day by day. Among them, patents have the power to make or break a company. According to Article 1 of the Patent Act, the purpose of the Patent Act is to “promote the development of technology and contribute to industrial development by protecting and encouraging inventions and promoting their use.” If we look closely at this provision, the purpose of the Patent Act can be divided into two purposes: the private purpose of protecting inventions and the public purpose of promoting technological development and contributing to industrial development by promoting the use of inventions. At first glance, patents seem to be a private, exclusive right that prevents others from using the inventor’s invention without permission. However, as the legal text states, patents actually have a strong public interest aspect. This can be seen by considering the conditions for obtaining a patent.
When an inventor invents a technology, there are two ways to protect it. One is to register it as a patent, and the other is to protect it as know-how. Know-how is a kind of secret that is used without disclosing the technology to others, and the most representative example is the Coca-Cola manufacturing method. The biggest difference between patents and know-how is whether they are open to the public or protected as a right. While know-how has the advantage of being able to be used without disclosing the technology, it has the disadvantage of not being protected as a right in the event of infringement. So the question is whether it is better to protect technology with a patent or know-how, and there is no definite answer to this question, and it is a matter of the inventor’s choice. However, if we look at it from the perspective of public interest, the answer would be a patent. In light of the preceding discussion, the public interest aspect of patents can be said to stem from the difference between patents and know-how in terms of disclosure. If a new technology is invented but not disclosed, it cannot be used by others, and the creation of more advanced technology is less likely than when the technology is disclosed, which is why the public interest of patents is manifested in the disclosure of technology. In short, patents can be seen as rights granted in return for the disclosure of technology.
So, what inventions can be patented? According to Article 2(1) of the Patent Act, “Invention is a creation of a technical idea using the laws of nature and is highly advanced.” To put it simply, highly advanced technology that follows the laws of nature can be patented. Here, the word “advanced” is important because the laws of nature apply to general technology. If you look up “advanced” in a dictionary, it says that the level or degree is very high, which suggests that the technology must be advanced and developed. Article 29, Paragraph 2 of the Patent Act states that “if a person with ordinary knowledge in the technical field to which the invention belongs could easily invent the invention based on an existing invention before the filing of the patent application, the invention shall not be registered.” In other words, inventions that do not make progress from existing inventions cannot be registered. Since patent rights are granted in return for disclosure and the purpose of patents is to promote technological development and contribute to industrial development, it is natural that only inventions with inventive step can be the subject of a patent, as it is difficult to expect any technological or industrial development from the disclosure of inventions that do not progress from existing inventions.
As such, a patent is a right obtained as a reward for disclosure of an invention with inventive step. Before making a judgment on inventive step, there is a prerequisite to consider. The prerequisite is that the invention is novel, that is, it did not exist before. It is self-evident that if the technology for which a patent is sought is more advanced than other technologies, but it is merely an existing technology that has already been disclosed, then the patent right given as a reward for disclosure cannot be obtained. The Patent Act states this explicitly in Article 29, Paragraph 1, which states that publicly known and commonly used technologies cannot be registered as patents. In conclusion, only new and advanced inventions can be registered as patents in exchange for disclosure, and the inventor can protect his/her invention as a patent while allowing others to use the disclosed invention, thereby promoting technological and industrial development through patents.
Patents have faithfully performed their functions as the industry has developed, enabling the systematic advancement of technology. However, just as there are loopholes in any law or system, there have begun to be groups that exploit loopholes in patents to maximize their own profits. A patent right can be held even if the invention is not directly implemented. A patent troll is a company that takes advantage of this to collect royalties from patent holders without practicing the patented invention. They find companies that practice their patented technology and demand high royalties through negotiations or collect huge compensation through litigation on the grounds of patent infringement. Patent trolls are difficult to challenge legally because they exercise their rights as patent holders, but they are contrary to the purpose of the patent system in that they hinder the use of patented inventions and increase barriers to entry for technology.
Patent trolls have negative aspects that hinder industrial development, but they cannot be simply condemned. Recently, the term NPE (Non-Practicing Entities) has emerged as a more refined term for patent trolls. This term highlights the positive aspects of patent trolls, which not only facilitate access to patents for small and medium-sized enterprises that previously had difficulty accessing patents as patent management companies, but also help inventors receive fair compensation through patent purchases, thereby playing a role in revitalizing patent transactions. As such, it can be said that patent trolls or NPE have both positive and negative effects. Therefore, it is important to develop systems and policies that emphasize their positive aspects. In fact, there are attempts to form a patent fund at the joint public-private level to seek proper compensation and protection for technology.
Through the examination of the public interest aspect of patents, it was confirmed that patents are not simply a system for protecting the rights of individual inventors. The patent system is a system that encourages the disclosure of advanced technologies by protecting the rights and providing fair compensation to individual inventors, thereby promoting technological advancement and contributing to industrial development. There are patent trolls that attack companies with patents or interfere with the use of technology, which can be seen as contrary to the purpose of the patent system, but this can be seen as a transitional aspect that occurs in the process of patents developing into a tangible property right, like tangible property, and becoming the subject of transactions, as a form of intellectual property. Therefore, it is desirable that the patent system develops in a way that appropriately balances the protection of the rights of inventors, the private interest, and the public interest in technological and industrial development within the larger framework of the patent system’s purpose. In this process, not only gradual improvement of laws and systems is necessary, but also a change in people’s perception that intangible assets such as patents should be protected as legitimate rights. This is because the patent system can only be properly established in a society and culture where patents are legitimately recognized as a right.
