Subcontractors Can Now File Direct Injunctions with Courts Against Technology Theft by Primary Contractors
Subcontracting Act Amendment Passes National Assembly Plenary Session
Direct Court Filing Allowed Without Going Through the Fair Trade Commission
Preemptive Relief Now Possible Instead of Post-Facto Sanctions
Subcontractors who suffer damages from technology theft or unfair subcontracting practices by primary contractors will now be able to file for injunctions directly with the court.
The Korea Fair Trade Commission announced on August 27 that an amendment to the Subcontracting Act containing these provisions has passed the National Assembly’s plenary session.
According to the amendment, subcontractors who have suffered or are at risk of suffering damages due to legal violations can now file for injunctions directly with the court, without first going through the Fair Trade Commission.
The scope of actions eligible for injunctions has been broadly recognized to include 12 types of conduct: demands for and misappropriation of technical data, setting unfair special terms, unfair determination of subcontract payments, forced purchases, unfair returns, unfair interference in management, and payment reductions, among others.
In particular, in cases of technology theft, the amendment allows for the disposal of goods produced as a result of the violation to be included in the injunction request. This is because, even if the court grants an injunction against the misappropriation of technology, damages may continue through goods or facilities already produced.
The amended provisions will take effect three months after promulgation, following procedures such as approval by the Cabinet Council.
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The Korea Fair Trade Commission stated, "Going forward, it will be possible to provide swift relief and prevent damages before post-facto administrative sanctions or compensation for damages. By supplementing the existing administrative sanctions of the Fair Trade Commission, subcontractors will be able to receive stronger protection."
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