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Jul 31, 2013

How to Protect Your IP and Enforce Your Trademark Rights in Korea

Please register all of your trademarks and other intellectual property in Korea.  Yes, your "international filing" is not good enough.  You must, before engaging in any additional consideration of doing business in Korea register your IP in Korea.  Don't even read further.  Contact us and we will happily advise a good patent/trademark agent to utilize.  No need to get a law firm to do this for you - the agents are, typically, adequate for most non-complex filings. 

After registering all your IP in Korea, please follow, at a minimum this simply advise.  
  1. Do a Comprehensive Intellectual Property Audit.  Form a team to audit all your intellectual property including your patents, trademarks, service marks, books, manuals, videos, software, know-how, and trade secrets.  The purpose of this Audit is to determine if all of your IP is registered and properly safeguarded.  This is discussed more at: Protecting Your Intellectual Property in Korea.  Register if you find additional IP.
  2. Educate Korean Customs
    A few professionals in Korea, including professionals at IPG, do presentations to Customs informing them of how to spot counterfeit products.  If you don't this good luck.  They are overburdened and are unlikely to be able to determine a decent fake from real a product.
  3. Engage Actively Customs and the Prosecution
    Speaks for itself.  If you are no on-the-ground in Korea, get a local company to assist.
  4.  Draft a Comprehensive Intellectual Property Protection Plans.
     If you don't have an IP department or have a IP department that is not up to the task in your company the inexpensive way to do this outsource the work.  Please consult with your in house attorney.  If you don't have an attorney, please get one.
  5. Track Importers of Counterfeit Products into Korea
    The Prosecution, generally, does a decent job.  However, often it is advisable to employ a professional to obtain the necessary information and present the information to the Prosecution and Customs.
  6. Actively Engage your Sales Channels
    So much information can be garnered from those that are competing against counterfeiters and pirates. 
  7. Integrate the office outside Korea with the Korean entity.  All too often the Korean branch is totally out of the loop and hence unaware of developments at the home office.
  8. Trade Secrets Matter.  I wrote an article on protecting trade secrets in Korea that may be found at: Protecting your Trade Secrets in Korea: Top 5 Things to Know Before Subjecting your Business to the Korean Market.
  9. Get Professional Assistance
    Speaks for itself.  If you don't have an experienced in house team of Korean-based international attorneys (and often even if you do), you need assistance from professionals in Korean IP law who have high-level contacts with the Prosecution and Customs and experience in building an IP protection scheme for your company.  

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

Jul 30, 2013

Korean Environmental Law: New Sanctions for Illegal Fishing

Korea has been criticized from domestic and local environmentalists for its fisheries law.  In reaction to criticism, the Korean government has amended the Water Fisheries Act to impose a maximum fine of three times the value of the catch.  In limited cases imprisonment is possible.   

The amended Water Fisheries Act of Korea, also, imposes the potential sanction of losing of a companies commercial fishing license if catches are not reported or are unreported.

Korean laws in the English language may be found at the website of the Korean Legislative Research Center.


IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

Jul 15, 2013

Establish a Company in Hong Kong when Entering the Chinese Market

As those of you who have read my blog over the past 6 or 7 years (I can’t even remember how long I have been writing it) you know that I have always been a big fan of Hong Kong. Ever since 1989 when I sailed into Hong Kong on U.S. Navy ship as a young U.S. Marine Officer I have been enthralled with the city.

While the dramatic beauty of Central and the sky scrapers overlooking Victoria Harbor against a backdrop of lush green mountains, the iconic Star Ferry and other attractions make it my favorite city in the world, it is the business climate and rule of law that make it the best place in the world to do business.

I have written about this in Hong Kong and the Rule of Law and Hong Kong Phooey and numerous other articles on the topic. I also advise my clients from all over the world on using Hong Kong as the only legal corporate structural platform for their entry into China and South East Asia. Well, we now have another reason to support Hong Kong as a market entry, financial and administrative center for China operations – regardless of the scope of business.

China’s State Administration of Taxation just announced a change in the rules governing the withholding tax that foreign investors pay on dividends repatriated from their share of investments in Chinese companies. Companies and shareholders based in countries outside Mainland China (such as the United Kingdom, Hong Kong and Singapore) that have double taxation agreements (DTAs) with China will only have to pay 5% in withholding tax on the dividends they receive from Chinese companies, instead of the usual 10% payable by companies and shareholders resident in countries without DTAs (U.S. and many EU companies).

Although the reduced rate has been available for several years Hong Kong holding companies did not meet the ‘substantial business activity’ requirement which has in effect been removed. So, now there is even more reason to use Hong Kong as the structural platform for you operations in China and beyond.

Posted by Frank Caruso, Chair China Practice Team at IPG.

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

Jul 11, 2013

Is Korea Still an Immature Democracy and Why does it Matter for your Business?

No matter which direction the electorate turns, the choices seem to be disintegrating with each passing day.

The presumptive first woman president, conservative Park Geun-hye, has watched her chances for election fall just short of going down in flames. First, there were the corruption scandals among her campaign organizers that did a brilliant job of reminding folks that Ms. Park comes along with all the sordid baggage of the conservative camp. Then her belated apology to the victims of her father’s excessive abuses of power as president, which came across as too late and too cynical as a means to prop up her sagging polls numbers. And now, there is the least-expected development - major infighting in her campaign, as a result of Ms. Park trying to widen her appeal to the anti-Park family Jeolla region.

During the recent holidays and at a relative’s wedding, I talked with my in-laws, who have generally supported the opposition camp even though they hail from arch-conservative Daegu. They are ardent Ahn Cheol-soo supporters. When I asked them about whether Ahn was truly qualified to serve as president given his absolute zero experience in government and politics, I was told that Ahn is very intelligent and that they expected him to surround himself with equally intelligent advisers.

Okay, I said, but can Ahn beat Park if Moon Jae-in is also running? Of course not, was the reply, but Moon will certainly join up with Ahn in order to beat Park; or in a worst case, Ahn will join forces with Moon.

I responded that both Ahn and Moon are exceptionally intelligent men, but no one has really tested their emotional intelligence. High IQs are often dwarfed by giant-sized egos. If this was a game of chicken to see who would succumb first and offer to join forces, we would have major blood on the highway. And so far, my dire forecast seems to be fulfilling itself.

The fundamental problem, however, may not be the individual psychologies of these leading candidates. The underlying problem is the relative immaturity of Korean democracy that lacks strong political platforms on which candidates stand and for which they volunteer to support. Instead, we have strong personalities that form cliques with lesser politicians. And surrounding these cliques are many hopeful hangers-on who have much to lose should their candidate bow out and support another candidate.

These low-profile power groups place huge amounts of pressure on their candidates that often preclude the politicians from being adequately flexible enough to do the right thing for overall good of the country, or to risk taking turns holding power, by chancing deals where this year’s dominate candidate will support the subordinate candidate during the next major election.

In some ways, one may say that the candidates are figureheads for large vested interest groups that may not actually be all that different on policies but fiercely competitive to gain power. Picture if you can, a three-team rugby match with scrums made up from three teams. The primary difference is one cannot easily see the whole team but only the team captains in these scrums.

Sadly, most of the electorate would very much like to see a change from the current administration of corrupt conservatives who overly favor chaebol and seem incapable to adequately serve the rest of society - regardless of their actual intentions. At the same time, the so-called progressives are proving to be remarkably unreliable and possibly implausible.

But right now, the electoral choices look much less appealing than they did even a month ago. The only person who has proven to be universally popular in Korea these days is, of course, Psy. I joked with my in-laws that perhaps he should run for president. The more I quipped about this outrageous idea, the more practical it seemed, much to my surprise and dismay. But consider the following:

First, Psy does not have a cadre of hangers-on, expecting political spoils. Sure, some want to share in the current limelight. But Psy is not closely affiliated with any political camp.

Second, Psy has as much experience in governance as Ahn Chol-soo. The two men share rock star-like fame. But if only because fame is more recent, Psy seems to be handling his popularity better, recognizing that while his global recognition is well earned, his fame is also a bit of a fluke.

Third, across political lines and generations, Psy is someone that almost everyone in Korea is proud of.

Fourth, Psy has proven exceptional leadership around the world in motivating hundreds of thousands of people to do the horse dance.

Fifth, if elected, we could have one of the most amazing North-South summits. Kim Jong-un is about the same age, size and build as Psy - and has only a year or two more of political experience. What we could be witnessing would portend the future of a unified Korea. Eventually we may even see a “cool” walk-off on live television. We could see who has the better moves, postures and body language - with and without sun glasses.

While I’m not genuinely sincere about a Psy presidential candidacy, we need to also look at where are today. If the election were to be held today, we might expect low voter turnout with the conservatives retaining power as those who desire stability are more likely to turn out in greater numbers than the disheartened idealists who are looking for genuine change in governance.

But it is still a long, long while in political time until the December elections, so matters could very well turn upside down quite unexpectedly. Perhaps Psy entering the fray on one level or another is just what this election needs.

* The author is a Senior Adviser to IPG. The article appeared in the Korea Joonang Daily on October 16, 2012.

Sean Hayes may be contacted at:

Sean Hayes is co-chair of the Korea Practice Team for one of the leading international law firms. He is the only non-Korean to have worked as an attorney for the Korean court system (Constitutional Court of Korea).
IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.