Eradicating Technology Theft in Small and Medium Enterprises... Courts Can Request Prohibition and Prevention

Amendment to the Win-Win Cooperation Act Passed at Cabinet Meeting on the 10th
Ministry of SMEs and Startups to Promote Publicity and Education by Enforcement Date

Small and medium-sized enterprises (SMEs) will be able to file injunctions with the court to prohibit or prevent unfair technology theft damages or potential damages in consignment and subcontracting transactions.

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The Ministry of SMEs and Startups announced that the partial amendment to the "Act on the Promotion of Mutual Cooperation between Large Enterprises and SMEs," which includes this provision, passed the Cabinet meeting on the 10th.

So far, the Ministry of SMEs and Startups has strengthened post-remedial measures against the misuse of technical data arising from consignment and subcontracting transactions by revising the Mutual Cooperation Act, including enhancing the punitive damages system to reflect actual damages and improving the court's authority to request data submission to support damage proof. The punitive damages cap is up to five times the damages.

However, under the current law, subcontracting companies that have suffered or may suffer damages due to unfair misuse of technical data in consignment and subcontracting transactions have no means to file injunctions to prevent the spread of damages. As a result, subcontracting companies could not take separate remedial measures to prevent damage spread until administrative actions by the Ministry of SMEs and Startups or court rulings on damages were made when damage occurred due to misuse of technical data.

With the introduction of the injunction right, subcontracting companies experiencing damages can directly request the court to prohibit or prevent the violation of the law. In addition, when filing for prohibition or prevention with the court, they can also request necessary additional measures such as disposal of objects that caused the "misuse of technical data" or removal of provided equipment.

Kim Woo-soon, Director of Technology Innovation Policy at the Ministry of SMEs and Startups, said, "With the introduction of the injunction right through this legal amendment, along with post-remedial measures such as punitive damages, we expect to minimize potential disadvantages caused by technology theft by early blocking the spread of damages." He added, "We will promote various publicity and education targeting SME industries and organizations to ensure that SMEs recognize and actively utilize the newly introduced injunction system in the field, coinciding with the full enforcement of the law on December 11."