Easier Reporting of Technology Infringement for SMEs, Lower Litigation Burden

Resolution of the Cabinet Meeting on the Amendment to the Act on Support for Protection of Small and Medium Enterprise Technology

[Asia Economy Reporter Kim Cheol-hyun] The method for reporting administrative investigations of technology infringement by small and medium-sized enterprises (SMEs) is being expanded from paper-based to electronic documents, and a project to alleviate the legal cost burden for SMEs experiencing technology disputes will also be promoted.

The Ministry of SMEs and Startups (Minister Lee Young) announced that the partial amendment to the "Act on the Protection and Support of Small and Medium Enterprise Technology" (hereinafter referred to as the Technology Protection Act) was approved at the Cabinet meeting on the 11th. The main points of this amended law include expanding the reporting method for technology infringement by SMEs from paper to electronic documents and establishing the basis for promoting the "Technology Protection Policy Insurance Support Project," which supports legal costs incurred during SME technology disputes. It is scheduled to be implemented six months after promulgation.

First, the Ministry of SMEs and Startups (MSS) has prepared the legal basis to allow administrative investigation reports to be submitted electronically to enhance convenience and accessibility for SMEs in activating the technology infringement administrative investigation system. Until now, reports of technology infringement administrative investigations could only be submitted in writing, causing inconvenience for reporting companies and concerns about loss or misplacement of materials during submission. To address this, the MSS will open a dedicated email for electronic document submissions. Additionally, by early next year, a submission function for administrative investigations will be established within the "SME Technology Protection Fence" system, allowing applicants to submit investigation reports and related materials and check progress status. This will provide convenience in rapid case reception and information on action results, and is expected to significantly enhance the security management level of submitted materials.

Through the amendment of the Technology Protection Act, the basis for promoting the Technology Protection Policy Insurance Support Project was also established. This is to support SMEs in reducing financial burdens and stabilizing management by compensating legal costs through insurance in the event of technology disputes. According to the 2022 SME Technology Protection Status Survey by the Ministry of SMEs and Startups, 24% of SMEs that suffered technology infringement damage took 'no action,' and among them, about 50% cited 'time and legal cost burden' as the reason. Particularly, financially vulnerable SMEs often give up legal responses despite experiencing disputes due to concerns about prolonged disputes and legal cost burdens. The Technology Protection Policy Insurance Support Project is a program that supports SMEs in subscribing to insurance so that they can be compensated for legal costs and other expenses through insurance payments when unexpected technology disputes occur. Insured companies can prepare in advance for technology disputes and respond actively when disputes arise.

The Ministry of SMEs and Startups plans to continuously expand the coverage and compensation scope of the Technology Protection Policy Insurance and develop advanced measures to minimize blind spots in SME technology protection. No Jin-sang, head of the Technology Protection Division at the Ministry of SMEs and Startups, said, "We will minimize inconveniences for SMEs through convenience in administrative investigation reporting and strive to restore SME damages through effective investigations," adding, "We will strengthen promotion of the Technology Protection Policy Insurance and continuously improve products with insurance companies by reflecting the voices from SME sites to provide practical help to SMEs experiencing technology disputes."