44% of SMEs Suffering Technology Theft "No Separate Action Taken Due to Difficulty in Proof"

Lee Young, Minister of SMEs and Startups, is speaking at the Startup Technology Theft Prevention and Recovery Inter-Party Council held at the National Assembly on June 7.

More than 40% of small and medium-sized enterprises (SMEs) with patent application experience did not take any separate action even after suffering from technology theft, as it is difficult to prove the damage.

The Korea Federation of SMEs recently announced on the 20th the results of a "Policy Demand Survey to Eradicate Technology Theft" conducted on 300 SMEs with patent application experience over the past three years. This survey was conducted to understand the actual conditions of technology theft, which has recently emerged as a social issue for SMEs, and to gather opinions from the SME sector on policies to eradicate technology theft.

The survey results showed that more than one in ten SMEs (10.7%) holding patents had experienced technology theft. Among the affected companies, 43.8% responded that they "did not take any separate action." The most common reason, cited by 78.6%, was "difficulty in proving the fact of technology theft damage."

When asked about the most necessary policy for damage recovery, 7 out of 10 companies with damage experience chose "government support for proving technology theft damage" (70.6%). "Strengthening punitive damages" (23.5%) followed.

Regarding the reason why the "order to submit materials to the opposing party" provision, introduced in 2021 under the Subcontracting Act to support proving technology theft damage, is not well utilized, the most common response (53%) was "to use the system, the damaged company must specify the materials and apply to the court, but it is difficult to specify accurately because the offending company holds the materials."

As part of improving the damage proof support system, 88% of SMEs responded that the recently proposed "court order system for the Fair Trade Commission to submit materials during civil litigation" is "necessary" (19% very necessary, 69% necessary). The reasons included "substantial damage relief by using materials already secured by administrative agencies as evidence in litigation" (61.4%), "early resolution of disputes" (22.3%), and "realistic compensation through evidence securing" (16.3%).

Meanwhile, regarding the level of criminal punishment for technology theft, 89.3% of SMEs expressed "dissatisfaction" (18.3% very dissatisfied, 71% dissatisfied). The reasons cited were "light punishment due to difficulty in estimating the scale of damage" (52.2%) and "lenient punishment compared to the level of damage because it is a first offense" (25.4%).

Yang Chan-hoe, Head of the Innovation Growth Division at the Korea Federation of SMEs, stated, "Many SMEs do not take action because it is difficult to prove damage even if their technology is stolen, so the actual scale of damage is likely much larger than the statistical figures." He added, "Since both the National Assembly and the government currently empathize with technology theft damage, we hope that prompt and practical damage relief measures, such as introducing an order for administrative agencies to submit materials during civil litigation, will be established."

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