From catch-up to frontier: The utility model as a learning device to escape the middle-income trap
The second-tier patent system, known as utility models (UMs), has been considered a tool for supporting technological learning in catching-up economies. UMs often impose lower inventive step requirements than patents, making them accessible to inventors with limited capacity. However, the mechanisms by which the UM system supports the catch-up process and the system's long-term impact in the post-catch-up period remain underexplored. We address this gap by empirically examining how and under which conditions the UM system can create synergies with catch-up strategies and influence the emerging industrial structure in the post-catch-up phase. Drawing on the literature on catch-up and intellectual property rights (IPR), we argue that catch-up strategies that prioritize imitative and adaptive learning in short-cycle technologies can be complemented by the UM system, supporting the development of indigenous capabilities to produce high-impact frontier technologies and internalize their value-added. Using South Korea as a case study, we present two key findings: First, the country's post-catch-up frontier technologies (US patents) are more impactful when they build on active learning experiences encoded in domestic UMs. Second, UM-reliant frontier technologies contribute to value internalization (local value-added relative to foreign value-added). Our findings extend the literature on the role of different types of IPR in various stages of development and inform policy discussions on how UMs can be used to support capability building in developing countries.