The First Dispute Over 'Technology Leakage' in Electric Wire... Will It Face the 'Judgment of the Law'?

As investigative authorities have detected signs of the leakage of LS Cable & System's high-voltage submarine cable (HVDC) plant design technology and launched a full-scale investigation, industry attention is focused on what the outcome will be.

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According to legal and industry sources on the 13th, this is the first time a dispute has arisen over allegations of cable technology leakage. In the dispute status compiled by related agencies such as the National Intelligence Service, issues related to cables are grouped under 'electronics and electricity,' making it difficult to identify cable-specific disputes separately. There are no incidents from the cable industry in materials that collect major cases separately. According to the Supreme Court precedent search system, legal disputes related to cables are limited to patent infringement or subrogation claims for damages, and there are no cases involving technology leakage.

Accordingly, attention is focused on whether this case will proceed from the police investigation to prosecution by the prosecution and trial by the court, thus reaching the 'judgment of the law.' If it goes to trial, it is expected to be the first time a court ruling on cable technology leakage will be issued. It will likely serve as a 'guideline' for cable companies that have used similar construction methods on what circumstances can be considered technology leakage.

It has been reported that there was a perception that cables were far removed from 'technology leakage' compared to semiconductors and shipbuilding. This is because the methods of installing cables that carry electric power are similar among both domestic and global companies, and there have been no issues related to technology leakage for a long time. Companies have also tended to use the same construction methods for a long time without easily changing them. A representative example is that companies have been using ultra-high voltage cables made with cross-linked polyethylene (XLPE) insulation material for over 10 years. Developing new technology and obtaining patents was said to be very rare.

Including this case, there is an assessment that the atmosphere has recently changed. With the dawn of the artificial intelligence (AI) era, new technologies with high power consumption have emerged, and advanced countries’ power infrastructure is aging, creating conditions that could benefit the cable industry, leading to a significant increase in work volume. Competition among companies to secure projects has intensified. The spark of competition has naturally spread to the technology field. Companies have started to put effort into technology promotion, which they had not done before. The number of efforts to secure technology patents has also increased.

Technology competition exists both domestically and internationally, and the possibility of leakage exists in both. Although there are no representative cases of leakage overseas yet, there is a warning that it could occur in the future, so sufficient preparation is necessary. In 2019, the Ministry of Trade, Industry and Energy designated the 500 kV and above ultra-high voltage power cable systems held by LS Cable & System and Korea Cable as national core technologies, sealing off leakage channels at the source. At that time, concerns arose that Korea Cable’s ultra-high voltage power cable technology might be transferred to China, a latecomer in the cable market, due to the possibility of overseas sales including China, but the government successfully blocked it.

The technology leakage case under investigation by the police at LS Cable & System occurred domestically and is evaluated as evidence that cases of technology leakage due to competition among domestic companies will increase. LS Cable & System’s technology originated from the architectural office responsible for the architectural design of the HVDC plant. Architectural office A, which was booked by the Gyeonggi Southern Provincial Police Agency’s Industrial Technology Security Investigation Unit on charges including violation of the Unfair Competition Prevention Act, handled the architectural design of LS Cable & System’s HVDC plant from 2008 to 2022 and later participated in the construction of a competitor’s submarine cable Plant 1. The police suspect that this architectural office leaked submarine cable-related technologies secured during the design of LS Cable & System’s plant while designing the competitor’s plant. The police reportedly obtained related information in May, conducted a preliminary investigation, and recently launched a full investigation. It is also reported that raids were conducted on the architectural office and others.

Submarine cables are cables laid under the sea to transmit communication and electricity. HVDC refers to these cables operating at high voltage. The higher the voltage, the greater the amount of power that can be transmitted. Submarine cables have recently attracted attention as a new power supply source for offshore wind power generation. This is because they serve as a key device to supply clean energy obtained through offshore wind and tidal power to the land. In this regard, the United States is emerging as a land of opportunity. According to the global market research firm MarketandMarkets, the North American high-voltage cable market is expected to grow at an average annual rate of 5.7% until 2028.

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