Assemblyman Shin Jeong-hoon Proposes Legislation to Prevent Technology Theft from Small and Medium Enterprises

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Shin Jeong-hoon, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee (Jeonnam Naju·Hwasun, Democratic Party), announced on the 23rd that he has proposed the "Small and Medium Enterprise Technology Theft Prevention Act" (Partial Amendment to the Act on Support for Protection of Small and Medium Enterprise Technology) to supplement the effectiveness of the administrative investigation system for technology infringement of small and medium enterprises.

The amendment stipulates that if the infringer who possesses materials related to technology infringement refuses to submit the materials due to trade secrets or other reasons, the infringer and the reporter must prove the legitimacy of the refusal to submit materials through three rounds of questions and answers.

If a legitimate reason for refusal to submit materials is not demonstrated even after the Q&A, a compliance penalty amounting to 0.3% of the average daily sales can be imposed.

It also includes provisions to operate a "Technology Infringement Response Advisory Group" composed of lawyers, patent attorneys, and others, thereby enhancing the binding force of the advisory and ensuring the fairness and expertise of the advisory group.

The current "Administrative Investigation System for Technology Infringement of Small and Medium Enterprises" was introduced to protect small and medium enterprises that give up lawsuits due to the burden of proving damage and costs despite technology infringement damage, but questions have been raised about the effectiveness of the system because the infringer cannot be forced to investigate.

In fact, according to the 2016 Small and Medium Enterprise Technology Protection Status Survey, the biggest reason small and medium enterprises that suffered technology leakage damage do not take action is the difficulty of proving the leakage.

Rep. Shin Jeong-hoon emphasized, "Since the technology protection capability of small and medium enterprises remains at about 70% compared to large companies, it is difficult to reveal the damage without the help of the system when damage occurs," and added, "We must enhance the effectiveness of the current administrative investigation system to protect small and medium enterprises from technology infringement and actively support responses when damage occurs."