Korean Tech Giants Team Up Against Trade Secret Theft: Report

AH Samsung and LG logo 2

In short: Several of South Korea’s large smartphone and component manufacturers are now calling for greater government protections against IP and trade secret theft that they claim is perpetrated at large by Chinese companies. Speaking at the 3rd IP Strategy Forum: Strategies for Responding to Industrial Technology Disclosure from IP Perspective, Samsung Electronics, SK Hynix, LG Chemical, and several others allege that the current laws are simply not strong enough to prevent that from happening. Moreover, the group claims that mergers and partnerships are being used as ‘weapons’ in the thefts. Chinese companies are said to be utilizing those in order to gain access to business technology IP, supply chains, and human assets. Those are, in turn, being used to steal away the technologies and trade secrets in question.

Background: This isn’t the first time Chinese firms have been called out for stealing trade secrets or other technology. In fact, even the world’s second largest Android manufacturer, Huawei, has been accused of and paid out for related accusations in the past. However, claims relating to that variety of theft are notoriously difficult to prove in a court. Companies need to prove that a theft has occurred and that the secrets stolen were guarded with a reasonable amount of forethought and effort. After that, courts need to be shown exactly how much damage has been done and how that was calculated. The companies argue that those aspects of the current laws unduly burden the victim company and don’t protect companies during mergers or acquisitions. Since Chinese companies are gathering funds with the express goal of ‘leaching’ IP and trade secrets, the group asserts, that creates a serious problem compounded by weak laws for enforcing theft.

Impact: The group points to the US as a country from which guidelines for creating new laws could stem. In particular, the region’s merger and acquisition laws are much stronger than those they currently work with, the companies claim. Samsung takes things further by claiming that at least some of the problem could be solved by including ‘core technologies’ under Industrial Technology Protection Law. That would, it says, enable further government oversight on exported technologies and a direct investment from the authorities with regard to how those are protected.