Showcasing a National Experience: Means to Facilitate the Protection and Use of Software in Korea Colombo, May 30, 2007 Lee, Kyoung-Hwa Korea Software Copyright Committee(SOCOP)

I.1. The Status of Software Industry in Korea Internet Mobile Network Wireless LAN Gateway Internet Service (1999~2001) Mobile Service (2002~2004) Ubiquitous Service (2005~2007) Embedded SW as Key Driving Engines Paradigm Shift in Technology * Source : KIPA

Growth of Software Industry SW Piracy Rate Losses($M) * Source : 2006 BSA/IDC Global SW Piracy Study (released May 2007) Status of Software Piracy Production ($B) Export ($100M) ,601 7, ,556 No. of SW Companies I.2. The Status of Software Industry in Korea Korean SW Share in Global Market (%) SW Value Added Share in GDP (%) * Source : KIPA

I.3. Koreas Approach to Software Industry IPR Registration IPR Dispute Mediation Public Awareness Campaign Illegal Piracy Crackdown SW Industry Promotion SW IPR Protection Marketing Strategy Development Skilled Workforce Training Strategic Software Promotion Overseas Market Expansion

II.1. Software Industry Promotion Marketing Strategy Development 2006 Holding a Global IT Service Provider Promoting Domestic Package SW Company Elevating Quality Competitiveness No. of Top 100 Global Companies No. of SW Sales $10M Club Companies Domestic Package SW Market Share (%) No. of CMMI Certified Companies No. of GS Certified Companies 2 (03) Public Demand Creation : e-Government Projects, u-Projects Overseas Market : Export Consulting, Overseas Market Expansion Quality Innovation : Building Infrastructure for Quality Test, Developing Systems for Quality Certification * Source : KIPA

II.2. Software Industry Promotion Strategic Software Promotion Embedded SW Opensource SW Market Size ($B) Q Linux Application Rate for Central Government Organizations (%) Linux Share in Server Market (%) Annual Increase of 19.6% Building Infrastructure for Industry : Nurturing Skilled Workforce (OSS: 2,607, ESW: 1,513) R&D Investment: Domestic Embedded SW (Qplus), OSS Platform (Booyo) Development Market Application: NEIS, e-Administration, National Defense SW * Source : KIPA

IPR Dispute Mediation IPR Registration Public Awareness Campaign III. Software IPR Protection Illegal Piracy Crackdown IV IPR Legislation V III II I

III.1. Dispute Mediation Mediation Why Mediation? Mediation facilitates the amicable resolution of IPR disputes with assistance of mediation panel consisting of three specialists who represents the legal, academic, and industrial sectors No. of Dispute Mediation Takes on average 50 days Low cost compared to a lawsuit Protects trade secrets Effects as court settlement when parties accept the mediation Resolution Rate (%) No. of Dispute Mediation 31.3

III.1.1. Software Appraisal Appraisal Subject to Appraisal Appraisal provides decisive evidence of IPR violation rendered by the appraisal experts pool and appraisal software (exeyes) upon request of mediation parties, courts and prosecutors No. of Appraisal SW reproduction Completion of SW development SW development cost Other documents & database

III.1.2. Mediation Case Compensation for Damages Caused by Infringement of Game Program Copyright Developer A was working for Company X and, after leaving the company, A developed the similar game program, which he currently operates through Company Ys website. X alleged that A illegally sneaked the source code of X for his professional use. X applied for mediation to demand compensation for damages caused by the infringement of their program copyright During the mediation, a cross-check of both parties was made. X admitted that there had been no illegal copy of the source code. An amicable agreement was made since X committed not to raise any further questions in this matter Since game program is a complex copyrighted work in nature, the Mediation panel advised to be cautious with copyright infringement

III.1.3. Appraisal Case Developer A is employed by Company X and developed the e- Learning Program as assigned by X. During the development, A leaked the program under development and established Company Y in secret After completion of the program, A left X and started a business in Y on the basis of the same program. After realizing this, X sued Y for copying its program and the district prosecutors office applied to SOCOP for an appraisal of the similarities The programs were found to be similar after the appraisal Appraisal of Similarities in e-Learning Programs

Registration Registration verifies the origins of programs and explains transfers regarding the ownership of the copyright III.2. Software Registration No. of SW registration Registration Effects Presumption of the creation date Verification of the creation Presumption of negligence on the part of the infringer Defense against the third party

Online Registration Online registration launched in 2004, and have gradually increased its share in the whole registrations III.2.1. Online Software Registration No. of On/Offline Registration (57.5) 2601 (39.5) 4849 (51.8) 4046 (42.5) 4516 (48.2) No. of Offline (%) No. of Online (%) 6540 (60.5)

Escrow Escrow guarantees the safe use of software by depositing the source code with the SOCOP The user can use the software with stability even when the right holder is troubled with bankruptcy, natural disasters, loss or damage to the source code III.2.2. Software Escrow User Right Holder SOCOP No. of SW Escrow SW Escrow Agreement Escrow Package License Agreement Release Escrow Package

III.3 Public Awareness Campaign Discounted Software Sales Public Education SW companies made special software offers of up to 40% discount for the Hello! SW Copyright event to public, especially SMEs in Korea SW Academy Visiting Edu. 4 (86) 20 (2,010) 5 (180) 50 (6,717) 5 (163) 159 (68,655) 4 (112) 33 (4,885) 2006 No. of Classes (No. of Students)

III.3.1. Public Awareness Campaign Posters

III.3.2. Public Awareness Campaign TV Commercial Flash Animation

III.4. Software Piracy Crackdown Standing Inspection Team Inspection Activities SIT Members SIT Raids 32 1, , , ,514 Standing Inspection Team (SIT) under the Ministry of Information and Communication has been granted special police powers in 2003 to ensure the effectiveness of inspection, and conducts inspection against software piracy

Self-Inspection Tools Software Asset Management Consulting III.4.1. Software Piracy Inspection To understand the actual conditions of SW use and ownership Reduce the total cost of ownership (TCO) through the systematic management of SW assets Free self-Inspection software (inspector 3.1) * 29,830 Distributed (2004 ~ 2006) Network-based inspection (net inspector)

Online Monitoring Standing monitoring against illegal file-sharing service through online (P2P, Web Storage etc.) III.4.2. Online Piracy Crackdown No. of Online Monitoring SW Piracy Report Center

III.5 IPR Legislation Reinforced IPR Legislation The 10 th Amendment of Computer Program Protection Act (CPPA) was made for prompt and effective enforcement against online software piracy * The amended CPPA is effective from April 5, 2007 Corrective recommendation against Online Service Providers illegal distribution of copyrighted works (CPPA, Art. 34.3) Reinforced criminal penalty up to 5 years imprisonment or a 50 million won ($50,000) fine * Habitual criminals : up to 7 years imprisonment or a 70 million won ($70,000) fine (CPPA, Art. 46)

III.5.1. IPR Legislation The Republic of Korea and the United States concluded a free trade agreement on April 1, 2007 that will provide high-level standards for protection and enforcement of IPR Protection of rights over temporary copies Extended terms of protection for copyright * life of the author plus 70 years Strengthened protection for technological protection measure Reinforced liabilities of online service providers KORUS Free Trade Agreement

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