Welcome to the 'Republic of Fakes'

Forgeries and patent infringement are rampant in South Korea -- sometimes to a shocking degree.

By Michael Fitzpatrick, contributor

"Creativity is great, but plagiarism is faster." -- Ken Ndaru, author

FORTUNE -- Some off the notorious copy-cating prevalent in the tech industry was highlighted on August 25 when a US court ruled S. Korean giant Samsung had ripped off Apple's designs. The most damning evidence: an internal memo from Samsung's head of mobile communications JK Shin in which he suggested to his team, "Let's make something like the iPhone."

Truth is, however, that both China and South Korea have of late garnered a reputation for some spectacularly brass-necked imitations and attempts at fakery or plagiarism. "My country is such a joke sometimes I call it the Republic of Forgery," says Seoul-based author and critic Kim Kyung-Sook. "That's after Woo Suk Hwang, [caught falsifying research on cloning] and all the fake luxury watches and fashion you see even worn by celebrities here."

Certain parties in Asia seem to revel in the chutzpah that is often accessory after the fake. China has chains of bogus Apple (AAPL) shops, phony Ferraris (a steal at just $10,000 US) and even once boasted a Potemkin multinational -- a working facsimile of Japan's NEC. The Korean peninsular has been no slouch either -- delivering fake Starbucks (SBUX), "Starpreya," and possibly even a fake Kim Jong-il. (A Japanese university professor claimed that Bill Clinton met a phony Kim in 2009.) The tiny country perched on a peninsula that sticks out of the Chinese continent like a swollen appendix might even be the first for simulated good looks. About 62% of South Korean women have had plastic surgery according to some figures.

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With such a reputation for playing fast and loose with vérité it is no surprise the country is awash with IP and copyright disputes. Samsung alone has roughly 50 patent suits ongoing nationwide. While there are scores of quarrels globally over alleged South Korean infringement of patents and copyrights despite the country being signed to numerous international IP treaties. According to the Korean Intellectual Property Office (KIPO) the number of patent lawsuits involving domestic and foreign companies in the country has nearly doubled from 154 cases in 2009 to 278 cases in 2011.

Some South Koreans blame aggressive patent enforcers unlovingly referred to as patent trolls. The figures, they say, point to foreign companies filing against domestic firms far outnumbering those by Korean firms suing foreign entities. In the last three years over three-quarters of the total number of lawsuits have been brought by outsiders says KIPO.

On the counterfeiting side South Korea confiscated 57,005 fraudulent goods domestically last year compared to just 5,363 in 2006. KIPO states on its website that it and the Korea Intellectual Property Protection Association are getting serious about crackdowns. Although offenders have said they are usually back in business after paying a fine. Counterfeiting in the country still very much persists says Kenneth L. Port professor of law at the Intellectual Property Institute in Minnesota. "Korea has been a long-term problem for selling knock-off goods, particularly those from Japan," he says.

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South Korea has been a member of the WTO since 1995 and signed up to several anti-counterfeiting trade agreements. Still, problems persist. "If the agreements have the intended consequences, South Korea knocking-off products should slow or stop," argues Port. "The brakes should have been applied." KIPO and S. Korean authorities did not responded to requests for comment. A recent report where a long-standing Japanese jeans maker, Evisu, lost to a South Korean rip-off scammer because of a technicality does not inspire confidence.

Why so many forgeries? It might have something to do with South Korea's education system says Tariq Hussain author of "Diamond Dilemma: Shaping Korea for the 21st Century." "The education system is the cradle of cheating and bribery, one of Korea's biggest diseases," he explains. "Titles count for a lot in Korea, academic titles even more. So given this excessive focus on such titles, there is an incentive to, well, bend the rules, or even cheat. And occasionally these things are uncovered and lead to the demise of the person involved." Plagiarism in all sectors of eduction is rife he adds.

There is no more vivid case study than that of the high-flying South Korea professor, Hwang Woo-suk. He was spectacularly undone for manipulating cloning experiments in 2005. Currently, two more Seoul National University academics are being accused of falsifying stem cell research in papers submitted to international journals.

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Of course, the country has a rich history of innovation. Koreans claim the first modern metal movable printing presses debuted in the Hermit Kingdom in 1230 AD, centuries before Gutenberg. The claim is that the superior South Korean metal working needed for the new tech made its way to Europe, thus making the West the first to mimic a game-changing technology. (History records no ensuing patent suit, however.)

Posted in: Samsung, South Korea