SME Sector Urges Eradication of Technology Theft... Calls for Passage of 'Subcontracting Act' Amendment

Korea Federation of SMEs to Issue Statement on the 6th

The small and medium-sized enterprises (SME) sector has urged the National Assembly to promptly pass the amendment to the ‘Act on the Fairness of Subcontract Transactions’ aimed at eradicating technology theft.

Last month on the 9th, the National Assembly plenary session. Photo by Hyunmin Kim kimhyun81@

The Korea Federation of SMEs stated in a press release on the 6th, “Acts of technology theft are a livelihood issue directly related to the survival of SMEs and a national-level issue connected to the overall innovation will of the industrial ecosystem.”

The Federation pointed out, “Technology theft, along with price-cutting on supply contracts, is a representative form of unfair practices by large corporations. Although the National Assembly and government have recognized the seriousness of this issue and strengthened measures against technology theft, such acts continue unabated.”

They continued, “From 2017 to 2021, the number of technology theft cases suffered by SMEs reached 280, with damages amounting to 282.7 billion KRW. Considering cases that have not surfaced, the actual damage is likely even more severe.”

The Federation also highlighted, “A bigger problem is the difficulty in providing relief to SMEs that have suffered damages. According to the Ministry of SMEs and Startups’ ‘2022 Survey on the Level of Technology Protection for SMEs,’ since 2011, there has been only one case where an SME won a damages lawsuit.”

They criticized, “It is extremely difficult for SMEs, whose technology has been stolen, to file a damages lawsuit against large corporations equipped with major law firms and in-house legal teams, prove the facts of technology theft and the amount of damages, and receive relief.”

The Federation stated, “Considering the current system where SMEs find it difficult to receive appropriate damages, it is urgent to introduce the damage estimation provisions from the ‘Patent Act’ into the Subcontracting Act and raise the cap on punitive damages from the current three times to five times.” They added, “Passing the amendment to the Subcontracting Act, which includes these key points, would be the minimum effort to correct the tilted playing field and create a fair trial environment.”