Watcha "Utilizing U+tvMoa and WatchaPedia Data"
LGU+ "Just Industry-Standard Common Technology"
Native online video service (OTT) provider Watcha has reported LG Uplus to the Korean Intellectual Property Office (KIPO) on charges of unauthorized use of its data and technology theft. Amid ongoing conflicts since last year, LG Uplus has denied the allegations, stating that it used technology commonly employed in the industry.
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). Once the case is received by KIPO, it reviews the allegations through requests for document submissions and, if necessary, conducts on-site inspections of the accused party’s business premises. In this case, if the violation is confirmed through administrative investigation, KIPO may issue corrective recommendations and orders, impose fines, and if the company fails to comply with KIPO’s recommendations, KIPO may publicly disclose the violation.
The key issue is whether LG Uplus used Watcha’s data without authorization. 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 comments, exclusively to U+ Mobile TV, U+ Movie Monthly Subscription, and IPTV services.
However, Watcha claims that LG Uplus violated the contract’s usage scope by improperly using the data for its new service, U+tv Moa, and launched a service identical to WatchaPedia. Furthermore, Watcha alleges that from July 2022 to May last year, LG Uplus acquired Watcha’s core technology, data, service operation know-how, trade secrets, and ideas free of charge and used them in its own services.
For example, the process and wording for writing comments after watching a movie on U+tv Moa, the content linkage system, and the order of information exposure are identical to those of WatchaPedia. Watcha stated, "LG Uplus is strengthening U+tv Moa and its own OTT based on the technology and service operation know-how stolen under the pretense 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."
Watcha views this case as a significant turning point in judging unfair competition related to data. The Unfair Competition Prevention Act was amended in 2018 and 2022 to include 'unfair use of ideas' and 'data infringement acts' as types of unfair competition. Park Hee-kyung, a lawyer from the Kyungcheong Foundation supporting Watcha’s administrative report, added, "With the amendments to the Unfair Competition Prevention Act, it is now possible to respond to new types of violations 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."
On the other hand, LG Uplus denied the allegations, stating that it used functions and designs commonly used in the industry. LG Uplus said, "U+tv Moa did not use any Watcha data, nor did we obtain recommendation technology from Watcha. We do not use collected star rating information for recommendation services, and star ratings themselves are not unique to Watcha." LG Uplus also noted that Watcha’s objections filed with the Fair Trade Commission and the Ministry of SMEs and Startups were respectively dismissed without investigation and closed.
Watcha had reported LG Uplus to the Fair Trade Commission in October last year and to the Ministry of SMEs and Startups in November, alleging technology theft. Regarding the report to the Ministry of SMEs and Startups, Watcha stated, "Due to LG Uplus’s insincere submission of materials, a substantive investigation was deemed difficult," and requested case closure. LG Uplus responded by calling the allegations "groundless slander." LG Uplus’s 'U+tv Moa' service was launched in December last year.
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