This blog post examines the conceptual differences between patents and know-how, explores the pros and cons of each protection method, and discusses their application as technology protection strategies.
As technology advances, the value of intellectual property rights has increased daily. Among these, patents possess such formidable power that they can determine a company’s survival. Article 1 of the Patent Act states that the purpose of the Patent Act is “to promote the development of technology and contribute to industrial advancement by protecting and encouraging inventions and promoting their utilization.” A closer examination of this provision reveals that the purpose of the Patent Act is divided into two aspects: the private interest of protecting inventions and the public interest of promoting technological advancement and contributing to industrial development through the utilization of inventions. At first glance, one might think that patents, by granting exclusive rights through registration to prevent others from freely using the inventor’s invention, serve only private interests. However, as explicitly stated in the legal provisions, patents actually possess a strong public interest aspect. This becomes clear when considering the conditions for obtaining a patent.
When an inventor creates a technology, two approaches can be considered for its protection. One is obtaining a patent registration, and the other is protecting it as know-how. Know-how refers to utilizing a technology without disclosing it to others, much like a trade secret; the most representative example is the Coca-Cola manufacturing method. The key difference between patents and know-how lies in disclosure and legal protection. While know-how offers the advantage of utilizing technology without disclosure, it lacks legal protection against infringement. The question then arises: which is better for protecting technology? There is no definitive answer; it is a matter of the inventor’s choice. However, from a purely public interest perspective, the answer is patents. Reviewing the preceding discussion, the public interest aspect of patents stems from their difference with know-how: disclosure. Even if a new technology is invented, if it remains undisclosed, others cannot utilize it. Consequently, the creation of more advanced technologies from it becomes less likely than when the technology is disclosed. Thus, the public benefit of patents manifests through the disclosure of technology. Ultimately, a patent can be viewed as a right granted in exchange for disclosing the technology.
So, what kind of invention can be patented? Article 2, Paragraph 1 of the Patent Act states, ‘An invention means a creation of a technical idea utilizing natural laws, which is highly advanced.’ Simplifying this, we can understand that highly advanced technology following natural laws can be registered as a patent. Here, since natural laws generally apply to common technology, we must focus on the word “highly advanced.” Looking up “highly advanced” in the dictionary reveals it means “of a very high level or degree.” This implies the technology must be advanced or developed. Article 29(2) of the Patent Act explicitly states: “If, prior to the patent application, a person skilled in the art could have easily arrived at the invention based on existing inventions, the invention shall not be registrable.” This means inventions that do not advance beyond existing inventions cannot be registered. Considering that patent rights are granted as compensation for disclosure and that the purpose of patents is to promote technological advancement and contribute to industrial development, it is only natural that only inventions possessing inventive step can be patented. This is because it is difficult to expect any technological or industrial advancement from the disclosure of an invention that does not represent an advancement over existing inventions.
Thus, a patent can be described as the right obtained in exchange for disclosure of an invention possessing inventive step. However, there is a prerequisite to consider before judging inventive step: the invention must be novel, meaning it did not previously exist. It is self-evident that even if a technology seeking patent protection represents an improvement over other technologies, it cannot obtain the patent right granted in exchange for disclosure if it is merely an existing, already disclosed technology. The Patent Act explicitly states this in Article 29(1), declaring that technology already publicly known or used cannot be registered as a patent. In summary, only inventions that are both novel and inventive can be registered as patents in exchange for disclosure. Inventors can protect their inventions through patents, while others can utilize disclosed inventions, thereby promoting technological and industrial advancement through the patent system.
Patents have faithfully fulfilled their function alongside industrial development, enabling systematic technological advancement. However, as with any law or system, loopholes exist. Groups began exploiting these patent loopholes to maximize their own profits. Patent rights can be held even if the holder does not directly implement the invention. Patent trolls are companies negatively labeled for exploiting this advantage: they acquire patents from rights holders without implementing the patented inventions themselves, then collect royalties. They seek out companies implementing their patented technologies, demanding high royalties through negotiations under the pretext of patent infringement or pursuing massive compensation through lawsuits. Patent trolls are technically exercising their rights as patent holders, making it difficult to challenge them legally. However, they hinder the utilization of patented inventions and raise barriers to technological entry, which runs counter to the purpose of the patent system.
While patent trolls possess these negative aspects that impede industrial development, they cannot be simply condemned outright. Recently, the term NPE (Non-Practicing Entities) has emerged as a more neutral alternative to “patent troll.” This term highlights their positive role: as patent management companies, they facilitate patent access for SMEs that previously struggled to obtain patents, help inventors receive fair compensation through patent purchases, and stimulate patent transactions. Thus, patent trolls or NPEs can be seen as possessing both positive and negative functions simultaneously. Therefore, it is crucial to develop systems and policies that emphasize their positive aspects. Indeed, there are ongoing attempts at the public-private joint level to establish patent funds to explore proper compensation and protection measures for technology.
Through examining the public interest aspect of patents, we confirm that patents are not merely a system for protecting the rights of individual inventors. The patent system is precisely the mechanism that, by granting individual inventors protection of their rights and fair compensation, induces the disclosure of advanced technologies, thereby promoting technological development and contributing to industrial progress. While patent trolls exist who use patents as weapons to attack companies or hinder technology utilization, which can be seen as contrary to the purpose of the patent system, this can be viewed as a transitional aspect arising during the stage where patents, as a form of intellectual property, are evolving into a definite right, like tangible property rights, that can be traded. Therefore, it is desirable for the patent system to evolve by appropriately balancing the private interest of protecting inventors’ rights with the public interest of technological and industrial advancement within the broader framework of the system’s purpose, while resolving issues that arise along the way. This process requires not only the gradual improvement of laws and systems but also a shift in public perception, recognizing that intangible assets like patents deserve protection as legitimate rights. Only within a society and culture that legitimately recognizes patents as a right can the patent system be properly established.
