6 Startups, "Technology theft from large companies can't go on like this" Beginning solidarity with the Ministry of SMEs and Startups

On the 8th, the Ministry of SMEs and Startups held a meeting and presentation on ‘Measures to Strengthen Support for Technology Protection of Small and Medium Businesses’ at the Four Seasons Hotel in Gwanghwamun, Seoul.   The event was arranged to innovate the systems to protect the technology of small and medium-sized enterprises and startups, and to prepare measures to help companies affected by technology theft recover their businesses.   Officials from large and small businesses attended the meeting, including Vice Minister Joo Hyun Cho of the Ministry of SMEs and Startups, Vice President Noh Sung Park of Smartscore, CEO Ji Won Jung of Algocare, CEO Jong Wan Kim of RO&F, CEO Yu Hyung Kim of On Form, Executive Director Beom Soo Ye of KT, and Executive Director Mi Seon Ahn of POSCO E&C.   Vice President Noh Sung Park of Smartscore, who participated in the event as the representative of the affected companies, said, "If a dispute arises, startups must directly prove all facts, damages, and calculations of the amounts." He expressed regret by adding, “It is not easy to respond to the law from the standpoint of a startup, and there is a need to supplement this.”   Smartscore, a South Korean golf startup, previously claimed a case of technology theft by Kakao VX. It is said Kakao VX hacked its website about 800 times in the span of two years and copied the golf course operation and management solutions accumulated over the years to launch a similar service. Kakao VX acknowledged and apologized for unauthorized access, but claims it was an individual employee's deviation. Currently, Smartscore is in the process of criminal and civil lawsuits over the hacking incident.   Smartscore also reported Kakao VX to the Fair Trade Commission, saying Kakao VX committed unfair acts such as extorting customers through unreasonable unit price reduction and rebates.   Vice Minister Joo Hyun Cho of the Ministry of SMEs and Startups said, “While the eradication of technology theft has not been realized, technology theft from startups has recently become a social problem, and the frequency has increased as well.” She added, “This technology theft is a big problem as it takes away the ideas and growth potential of startups.”   The Ministry of SMEs and Startups presented measures to strengthen technology protection support for small businesses in three stages: △technology infringement prevention stage △dispute stage △recovery stage.   First, in order to prevent technology infringement, intensive support will be provided to startups through 1:1 matching methods such as signing confidentiality agreements, responding to patents, and securing transaction evidences. Technology infringement alerts will be given through market monitoring, focusing on the manufacturing sector. The right to request for prohibition or prevention of technology misappropriation to the court will be provided, and sanctions against technology infringement will be strengthened such as strengthening punitive damages from 3 to 5 times.   In the technical dispute stage, a pan-ministerial technology protection gateway, which is planned to start in earnest from 2024, will be established based on LLM (Large Language Model) so that affected companies can proceed with one-stop response and support systems—from application form provision to submission—for each ministry appropriate to the dispute situation. LLM refers to an AI-based natural language algorithm that provides human-like responses.   Furthermore, by 2024, business agreements will be signed with 19 district courts across the country to expand the transfer of the mediation system for court litigation cases and promote prompt dispute resolutions. Cooperation between ministries to eradicate technology theft will also be strengthened, such as joint application for administrative investigations by the Ministry of SMEs and Startups and the Korean Intellectual Property Office, request for investigation by the National Police Agency in case of failure to implement corrective recommendations, and strengthening cooperation with the National Intelligence Service to prevent overseas technology leakage.   In the recovery phase after a technical dispute, guarantee support up to a maximum of KRW 1 billion will be provided for business stabilization of the affected companies. A technical dispute recovery support center will be newly established to provide on-site support for various support projects such as warranty and technology transaction support through dedicated consultants.   In order to establish technology protection infrastructure, the technology protection legal system, which is currently divided into the win-win law and the technology protection law, will be integrated, and the ‘Small and Medium Business Technology Protection Act’ will be revised in its entirety to enhance the effectiveness of technology protection support measures. The Ministry of SMEs and Startups is also reviewing the establishment of an institution specializing in mediation and arbitration to secure expertise in dispute resolution and strengthen access to the mediation system.   Vice Minister Joo Hyun Cho of the Ministry of SMEs and Startups said, “We have prepared effective countermeasures by connecting and integrating the existing fragmented support industries through cooperation with relevant ministries. We will continue to work with small and medium-sized enterprises until a fair technology market is created in accordance with laws and principles by immediately reflecting the valuable opinions presented at today’s meeting, as well as deficiencies found after the implementation of the system.”    이동희 기자 (lee.donghee.ja@gmail.com)startups technology technology protection technology theft startups vice