Ministry of SMEs Strengthens Measures to Eradicate Technology Theft and Ensure Fair Payment for Small Businesses

The 9th Meeting of the Win-Win Adjustment Committee
Discussion on Interagency Cooperation Measures to Eradicate Technology Theft
Applying Public Institutions to Delivery Payment Adjustment Negotiations... Promoting 'Getting Fair Value'

Minister Kwon Chil-seung of the Ministry of SMEs and Startups is delivering opening remarks at the 9th meeting of the Win-Win Coordination Committee. Photo by the Ministry of SMEs and Startups

[Asia Economy Reporter Kim Heeyoon] The Ministry of SMEs and Startups discussed measures to revitalize fair payment for delivery prices by small and medium enterprises (SMEs), following an interpretation that delivery price adjustment negotiations can also be applied to public institutions.

The Ministry of SMEs and Startups announced on the 27th that it held the 9th meeting of the Win-Win Adjustment Committee at the Foundation for Large, Small, and Medium Enterprises and Agriculture and Fisheries Cooperation in Guro-gu, Seoul.

At this meeting, five agenda items were deliberated: ▲strengthening technical investigation and consultation and revitalizing dispute mediation, ▲amendment of the Win-Win Cooperation Act and follow-up measures to eradicate technology theft, ▲legal interpretation results on the application of the delivery price adjustment negotiation system to public institutions, and ▲status of mediation and arbitration of unfair cases.

First, investigations and consultations on technology leakage and infringement cases, which require high-level technical and legal expertise, will be strengthened.

The Korean Intellectual Property Office (KIPO) will expand its technology police personnel and introduce a three-person investigation team system by technology field (chemistry, machinery, electricity). Additionally, a ‘Technical Consultation Working Council’ will be formed between KIPO and the Ministry of SMEs and Startups.

To reduce the burden on companies caused by intellectual property disputes focused on litigation and trials, related systems will also be improved, such as establishing legal grounds to switch from trials to mediation.

Specifically, if both parties agree, trial cases can be referred to the Industrial Property Dispute Mediation Committee, and when referred, the presiding trial officer can participate in the mediation committee.

Measures will be taken to preemptively block potential infringements on technologies owned by SMEs and to strengthen remedies for SMEs harmed by technology theft.

The Ministry of SMEs and Startups will amend the Win-Win Cooperation Act to mandate confidentiality agreements, introduce punitive damages (triple damages), and establish provisions to ease the burden of proof on subcontracted companies, with implementation starting in February next year.

At this Win-Win Adjustment Committee meeting, discussions were held on inter-agency cooperation measures for the efficient implementation of the amendments to the Win-Win Cooperation Act. Online and offline promotions and education targeting the public and companies will be conducted.

Furthermore, delivery price adjustment negotiations will be applied to public institutions as well. The delivery price adjustment negotiation system refers to the process where, if adjustments to delivery prices are necessary due to changes in supply costs such as material costs, subcontracted companies or cooperatives (including the Korea Federation of SMEs) apply for and negotiate delivery price adjustments with the contracting company.

Previously, there was controversy over whether public institutions could conduct delivery price adjustment negotiations only when the adjustment met the contract amount adjustment requirements under the National Contract Act after entering into supply-subcontract contracts with SMEs under the Win-Win Cooperation Act.

However, the Legal Interpretation Deliberation Committee of the Ministry of Government Legislation interpreted that even if the contract amount adjustment requirements under the National Contract Act are not met, delivery price adjustment negotiations can be conducted if the requirements under the Win-Win Cooperation Act are satisfied.

Accordingly, based on this legal interpretation that delivery price adjustment negotiations apply to public institutions, the Ministry of SMEs and Startups plans to promote explanatory sessions and other publicity activities on delivery price adjustment negotiations targeting SMEs trading with public institutions.

Minister Kwon Chilseung of the Ministry of SMEs and Startups said, “The Win-Win Adjustment Committee will do its best to help SMEs struggling due to technology theft and rising raw material prices so that large and small enterprises can coexist, embrace, and leap forward together.”

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