Reported LGU+ for Unauthorized Data Use
Watcha "Launching Same Service as LGU+ WatchaPedia"
LGU+ Denies "Never Used Watcha Data"
Native online video service (OTT) provider Watcha has reported LG Uplus to the Korean Intellectual Property Office (KIPO) on suspicion of unauthorized use of its data.
On the 12th, Watcha announced that it had reported LG Uplus to KIPO for violating the Act on the Prevention of Unfair Competition and Protection of Trade Secrets (hereinafter referred to as the Unfair Competition Prevention Act).
According to Watcha, LG Uplus signed a database (DB) supply contract with Watcha in January 2018 to receive data from Watcha’s content recommendation and evaluation service, 'WatchaPedia.' This contract restricts the use of data, including star ratings and comment information, exclusively to U+ Mobile TV, U+ Movie Subscription, and IPTV services.
However, Watcha claims that LG Uplus violated the contractual usage scope by improperly using the data for a new service called U+tv Moa and launched a service identical to WatchaPedia.
Watcha also alleges that from July 2022 to May of last year, LG Uplus acquired Watcha’s core technology, vast amounts of data, service operation know-how, trade secrets, and ideas free of charge and has been using them in its own services.
Watcha stated, "LG Uplus is strengthening U+tv Moa and its own OTT based on the technology and service operation know-how it illicitly obtained under the guise of investment. It has been confirmed that they used the data beyond the scope of the signed DB contract for new services, which constitutes a violation of the law."
They added, "We will clarify the matter through an investigation by KIPO, which specializes in data and intellectual property rights and related disputes, and resist the bad practice of large corporations exploiting intellectual property rights of small and medium-sized startup companies under the pretext of investment."
Park Hee-kyung, a lawyer at the Kyungcheong Foundation supporting Watcha’s administrative report, said, "With the amendment of the Unfair Competition Prevention Act, it is now possible to respond to new types of unfair competition acts such as idea and data infringement that were not protected under existing laws. We hope this administrative investigation will serve as a starting point to properly recognize the importance and value of intangible assets."
LG Uplus responded, "U+tv Moa did not use Watcha’s data at all, and we have never obtained recommendation technology from Watcha. We do not use collected star rating information for recommendation services, and star ratings themselves are not unique to Watcha."
Meanwhile, Watcha had reported LG Uplus to the Fair Trade Commission (FTC) in October last year for technology theft. The FTC decided not to initiate an investigation in November last year, citing no evidence that LG Uplus launched a similar product using the technology provided by Watcha. LG Uplus launched the 'U+tv Moa' service in December last year, the month following the FTC’s decision not to investigate.
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