"From Power Abuse to Unauthorized Use"... Do You Know the Designer's Struggles?

Unfair Treatment Common in SME and Public Institution Requests
Annual Total Damage Estimated at 240 Billion KRW
Design Promotion Institute Operating Legal Advisory Group
"Eradicating Unfairness... Ensuring Designers' Rights"

"Do you think we won't meet next time? Do you think there will be no connection in any way?"

A, who runs a design specialty company, recently experienced unfair treatment and so-called 'gapjil' from a public institution. A received a design planning request from B, an employee of the public institution, but the trouble began because they started work without signing a contract. No, the mistake was trusting B completely from the start. B said, "Public institutions have complicated reporting and administrative procedures," and requested a planning proposal to submit for approval. The intention was to work with integrity, signing the contract and doing the work separately. B, who promised that "public institution contracts are 100% signed," later changed their words. A stated, "After delivering the planning proposal that took two months of effort, I was notified that no further work would proceed."

While A was preparing the proposal, B repeatedly said, "Please wait as there is a procedure for contract signing." However, after receiving the deliverables, B changed their mind and unilaterally decided not to sign the contract. B arrogantly shouted, "Do you think we won't meet next time?" and "Do you think there will be no connection in any way?" and showed an attitude that it was not a problem, saying, "This has been done like this in the past." A felt unfairness and helplessness, saying, "Do I have no choice but to submit and accept such unfairness?"

◆Unfair trade damage... "Need to improve perception of design work"= According to the 'Fair Trade Status Survey of Design Companies' released by the Korea Design Industry Association, the proportion of design specialty companies experiencing trade damage in 2021 was 22.7%, up 5 percentage points from the previous year.

By employee size, small companies with 10 or fewer employees had a relatively high damage experience rate of over 25%. The average damage amount that year was 96.7 million KRW, and the total industry damage amount was estimated at about 240 billion KRW. By damage type, 'unfair trade' related damage was the highest at 22.3%. The case experienced by A, who was unfairly treated and subjected to gapjil by a public institution, is also included in unfair trade.

Among detailed cases of unfair trade damage, 'excessive design direction changes and revisions (15.7%)' was the highest response for two consecutive years, followed by 'development demands unrelated to contract content (14.3%)'. The main dispute targets were 'small and medium enterprises (78%)' and 'government, local governments, and public institutions (50.7%)'. When asked why companies endure damage, the most common response was "considering the relationship with the client and disadvantages in re-contracting."

Kim Taebong, Secretary General of the Korea Design Industry Association, explained, "Design is not just about coming up with a brilliant idea, but a complex task that considers market research, user analysis, product productivity, convenience, and more." He added, "Design should not be simply regarded as 'a few pictures' and there is a need to raise awareness of how important design is in securing product competitiveness."

◆Free legal consultation support... "Guaranteeing designers' rights"= The Korea Institute of Design Promotion has been operating a legal advisory group composed of experts such as lawyers and patent attorneys since 2012 to prevent design damage. This year's budget for the design legal advisory group project is 250 million KRW, a 13.6% increase from the previous year. The project is carried out in cooperation with five design promotion institutions nationwide, the Design Industry Association, and the Korea Institute of Design Promotion's China office. Design companies can receive free legal consultation and advisory services necessary for management.

C, who runs a design specialty company in Daegu, received shocking news that a client had gone out of business. The logo and application design work requested by the company had already been completed. However, the client refused to pay the remaining balance, claiming the contract was canceled due to the closure. C spent nearly a year in litigation from February 2021 to receive the service fee. C said, "In the end, we reached an agreement through mediation and gave up a large amount." However, the defendant, the closed company, demanded the original design files, and C asked the legal advisory group whether there was an obligation to provide the original files. The advisor replied, "Considering that the defendant repeatedly claimed 'the contract was canceled,' since the contract was already terminated, C has no obligation to fulfill contractual duties and is not required to provide the original files."

To establish a fair design distribution environment, a standard design contract has also been developed. It clarifies the rights and obligations between service parties and uses the terms 'demand side' and 'supply side' instead of 'gap' and 'eul' to conclude contracts under equal conditions. By accessing the 'Comprehensive Information System for Design Fee Standards,' one can check wage rates by designer grade such as beginner, intermediate, and expert, and calculate appropriate wage rates. Yoon Sangheum, President of the Korea Institute of Design Promotion, said, "Through institutional support for resolving design disputes, a healthier design transaction ecosystem can be created," and added, "We will continue to strive to eradicate unfair trade practices in the design industry and build an environment where designers' rights are guaranteed."