The theft of technologies from small and medium-sized enterprises is one of the unfair practices by large companies that undermine Korea’s economy, and small and medium-sized enterprises whose technologies are infringed are facing a serious threat to their growth and survival.

In particular, relatively weaker small and medium-sized enterprises do not take follow-up action due to potential deal losses with large companies or a lack of ability to prove such theft, even though their technologies are taken away.

Although various measures have been prepared to root out technology theft, the harm to small and medium-sized enterprises from technology theft still continues, and many say that the system needs to be fundamentally improved to eradicate technology theft.

In this regard, this Act aims to strengthen remedies for small and medium-sized enterprise victims and eradicate technology theft in an effort to promote shared growth for both large and small companies by preparing the basis to define technology misappropriation, mandate non-disclosure agreements, divide the burden of proof, and introduce a documentation submission order system.

Details

A. Define technology misappropriation, and prohibit commissioning enterprises from misappropriating any technology (Articles 2, subparagraph 12 and 25 (3) newly inserted)

B. In the event that a commissioned enterprise provides a commissioning enterprise with technical data that should not be misappropriated, mandate a non-disclosure agreement to prevent technology misappropriation (Article 21-2 newly inserted)

C. When a commissioned enterprise proves that it has been damaged by technology misuse, require the commissioning enterprise to prove that it has not misappropriated technology (Article 25-2 (2) newly inserted)

D. If the applicable enterprise does not respond within the implementation period to an improvement request made after a periodic investigation of technology misappropriation, consider a request for dispute resolution to have been made (Article 27 (1))

E. Hold commissioning enterprises liable for compensating for damages no more than three times the harm caused by violating a prohibition of technology misappropriation (Article 40-2 (2))

F. Introduce a documentation submission order system that allows the court to order the submission of materials from the applicable party to alleviate the burden of proof for victim enterprises (Article 40-3 newly inserted)

G. Impose administrative fines of up to 10 million on those who do not sign a non-disclosure agreement under Article 21-2 (1) and those who do not provide written documents under Article 25 (2) (Articles  43 (2) 2 and 3 newly inserted)

Define the signing of non-disclosure agreements (Article 21-2), things to comply with (Article 25), burden of proof of commissioning enterprises (Article 25-2), submission of materials (Article 40), liability for damages (Article 40-2), and submission of lawsuit materials (Article 40-3)