‘Hidden Pain’ from Product Imitation... 44 Trillion Won in Damages Over the Past 5 Years

Provided by the Korean Intellectual Property Office

[Asia Economy (Daejeon) Reporter Jeong Il-woong] It has been found that companies suffer significant economic losses and distress when their carefully developed products are imitated by other companies. In most cases, these companies were reluctant to take action due to economic burdens.

On the 7th, the Korean Intellectual Property Office (KIPO) released the results of the "2021 Unfair Competition Act Survey," which quantified these issues. The survey was conducted by KDN Co., Ltd. from July 1 to August 12, targeting 1,250 companies and 1,000 consumers aged 20 and above. It asked about awareness and experiences related to unfair competition acts.

The results showed that 12.6% of companies had directly experienced or witnessed unfair competition acts.

The types of unfair competition acts experienced by companies (multiple responses allowed) included ▲production and sale of imitation products (86.2%) ▲unauthorized use of achievements gained through investment and effort (32.3%) ▲production and sale of counterfeit goods using unauthorized famous brand names (30.8%) ▲theft and imitation of economically valuable ideas (26.2%), among others.

Notably, companies participating in the survey reported experiencing approximately 390,000 cases of unfair competition acts directly or indirectly over the past five years, with estimated damages amounting to 44 trillion won.

However, few companies took action despite experiencing unfair competition. Cases where companies took no measures despite suffering damage accounted for 47.7% of all responses, with economic burdens such as litigation costs (67.7%) being the main reason for inaction.

The survey results from consumers showed similar trends. While 46% of all respondents reported experiencing consumer damage due to corporate unfair competition acts, 81.4% of those affected took no corresponding action.

The main types of unfair competition acts experienced by consumers included ▲false or misleading labeling of origin or producer, and false labeling of performance, quantity, or use (37.3%) ▲production and sale of imitation products (14.9%) ▲unauthorized use of famous brands to produce and sell counterfeit goods (13.4%) ▲theft and imitation of economically valuable ideas (11.6%) ▲unauthorized use of achievements created through significant investment and effort (5.8%).

Reasons for not reporting or taking legal action despite damage included lack of knowledge about procedures and methods (35.5%), perceived ineffectiveness due to weak penalties (29.4%), the behavior being widespread as a custom (24.5%), belief that it was not legally problematic (6.1%), and not considering the act wrong (4.5%).

Regarding this, Moon Sam-seop, Director of the Industrial Property Protection Cooperation Bureau at KIPO, stated, "Despite the enormous damage caused by unfair competition acts, many companies and consumers fail to respond. Reflecting this situation, KIPO will strengthen public relief measures such as administrative investigations or investigations by the special judicial police within KIPO instead of civil remedies, which impose significant economic burdens."

He added, "Currently, the Unfair Competition Prevention Act protects only competitors, but in the long term, we will improve related systems to include consumers as protected parties."

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