Ministry moves for stronger investigative right in tech infringement against SMEs

The Korean government will toughen probes into large firms infringing on the technologies of small and medium-sized enterprises, officials said Monday.

For this, the Ministry of SMEs and Startups announced it will move to revise regulations related to companies’ technology infringements to reinforce the investigative power.

Currently, authorities have to suspend an investigation on alleged technology infringement in certain cases, including when a business is temporarily closed or a lawsuit is filed between parties.

Under new regulations, the phrase “investigation is stopped” would be changed to “investigation can be stopped,” to allow the ministry to continue to investigate. The ministry cited past cases in which a company intentionally filed a lawsuit with the court to suspend a probe, and said the new rule will give the ministry greater discretion.

The revised laws will also make it difficult for large companies to reject on-site investigations related to technology infringement.

Currently, when a company refuses to be investigated, the ministry imposes a fine on the firm and suspends the probe for 60 days to await a response from the accused. In the future, the ministry will be able to continue the investigation even after the penalty is charged.

Since December 2018, more than 20 cases related to technology infringement have been reported to authorities, the ministry said. Two years ago, the SMEs Ministry implemented a revision of the Act on Support for Protection of Small and Medium Business Technology to be engaged in technology infringement cases directly.

Concerning technology violation cases, SMEs can report either SMEs or large companies to the ministry.

Of the around 20 reported cases, more than half were between SMEs and large companies while the other half were cases between SMEs. Investigations, however, were made mostly for cases between SMEs and large companies, the ministry said.

“The purpose of the administrative investigation is to resolve the unreasonable reality that small and medium-sized companies have to prove facts even though the perpetrator holds most of the evidence,” said Lee Dong-won, a chief at the ministry’s technology protection division, in a press briefing in March.

“The ministry will develop the system to help small and medium-sized enterprises having difficulty in proving their technologies despite infringement.”

By Shin Ji-hye (shinjh@heraldcorp.com)