[2020 National Audit] "Measures Needed to Protect Companies from Technology Theft"

Assemblyman Kim Kyung-man: "Only 9 Administrative Actions Out of 97 Fair Trade Commission Technology Misappropriation Cases"

Kim Kyung-man, Member of the Democratic Party of Korea. Photo by Office of Rep. Kim

[Asia Economy Reporter Moon Hyewon] # Small and medium-sized enterprise A is a fintech startup that conceived fintech technology for credit card payments between credit card members and registered a patent. Large corporation B requested an explanation of the patented technology from SME A, then designated a similar service as a regulatory sandbox and began offering it as a paid service.

# Large corporation B stole SME A’s source code and other materials, delivered them under the name of large corporation B, engaged in price undercutting during mass production, provided technical data to competitors, and produced the same product.

Although the government has prepared various measures to eradicate technology theft from SMEs, many companies still report damages. The functions of the Fair Trade Commission and the Ministry of SMEs and Startups to prevent, punish, and remedy technology theft remain insufficient, highlighting the urgent need for institutional improvements.

According to data submitted by the Fair Trade Commission and the Ministry of SMEs and Startups to Kim Kyungman, a member of the National Assembly’s Industry, Trade, Energy, SMEs and Startups Committee from the Democratic Party, the Fair Trade Commission handled a total of 97 cases of technology misappropriation in the past five years, but only 9 cases received administrative measures such as corrective orders or fines. Cases where fact verification was difficult, the materials did not qualify as technology data, or the transactions were not subcontracting led to the termination of the review process (33 cases), or cases where the review did not start (39 cases) totaled 72 cases, accounting for 74% of all cases.

The Ministry of SMEs and Startups’ SME Technology Dispute Mediation and Arbitration Committee, established on January 22, 2015, received a total of 122 mediation requests. Among these, 109 cases were closed and 13 are ongoing. However, among the 109 closed cases, 36 mediations failed, and 48 cases were suspended due to litigation, lack of materials, or inability to mediate, totaling 84 cases, which accounts for a staggering 77%.

Assemblyman Kim said, “It is urgent to improve laws and systems that can alleviate the burden of proof for technology theft victim companies, introduce a data submission order system, and cover blind spots in the Fair Trade Commission’s handling of technology misappropriation cases,” and added, “Since SMEs lack the time and cost to endure lengthy dispute procedures such as lawsuits against large corporations with enormous capital, special measures must be prepared to expand cost support for victim companies and enhance the speed of mediation procedures.”

This content was produced with the assistance of AI translation services.