Korea’s royalty payments top $3 bil. in 5 months

By Kim Jae-won

Staff reporter

The nation's overseas payments in royalties and license fees for foreign patents and intellectual property rights reached $3.17 billion in the first five months of the year, up 50.1 percent from the same period last year, according to the Bank of Korea (BOK) data released Thursday.

During the period, Korean companies earned $1.29 billion in royalties paid by foreign firms, resulting in a deficit of $1.88 billion, it added.

The balance tracks the nation's cross-border expenses and income for using patents and copyrights as well as brand royalties. As a rise in overseas patent payments resulted from the economic rebound, the deficit cannot be seen as solely negative, the central bank added.

"Most companies pay overseas royalties in tandem with their sales. An increase in such payments comes as the reviving economy is making corporate earnings rise, pushing up the sales," Lee Hee-sun, an economist at the BOK, said.

"Parts for electronics products, including mobile phones, are the main technologies for which Korean companies pay loyalties."

By country, the U.S. was the top recipient of royalties from Korea, followed by Japan.

Korea is a key exporter of electronic goods particularly mobile phones to the U.S. market.

The Korean economy grew 2.1 percent in the first quarter from the previous one on strong consumer spending and a surge in exports. The government revised upward its 2010 economic growth forecast to 5.8 percent from an earlier estimate of 5 percent.