South Korea is ramping up its efforts to prevent the leakage of intellectual property (IP) as concerns grow over the increasing incidence of technology theft, particularly in critical industries like semiconductors and display technology. The country’s Ministry of Economics and Finance outlined a series of new measures on Thursday to tighten security and safeguard national core technologies, following a string of recent technology leaks.
The announcement comes at a time when South Korea’s technological expertise has been rising globally, surpassing even China in key science and technology fields in 2022. However, this progress has made the country a target for those seeking to steal its technological innovations, both from within and abroad.
Alarming Incidents of Technology Leaks
In the past few years, South Korea’s patent office has reported a disturbing increase in attempts to leak technology overseas. According to the Ministry of Economics and Finance, there were 97 recorded attempts to steal technology, with 40 cases targeting semiconductors and 18 involving display technologies. Even more concerning is the revelation that 31 of these breaches were aimed at “national core technology,” considered vital to South Korea’s economic security.
The estimated damage from these incidents has been significant, amounting to ₩23 trillion ($16.8 billion). Over 60 percent of these breaches were attributed to insider actions, with many cases disguised under the pretext of personnel transfers, mergers, or acquisitions.
- 97 technology leakage attempts reported
- ₩23 trillion in estimated damage
- Over 60% of cases linked to insider actions
While external threats from hackers and foreign governments are always present, the insider risk has proven to be a significant challenge for South Korean authorities.
Insider Threats: A Growing Problem
South Korea’s Ministry of Economics and Finance expressed deep concern about the increasing number of technology leaks tied to insider actions. These actions often involve employees transferring proprietary knowledge to foreign firms under the guise of corporate mergers or personnel changes. In some cases, companies have withdrawn from the Korean market after transferring domestic technology to their overseas parent companies.
The most alarming recent example occurred last month when two former Samsung employees were arrested in South Korea on suspicion of stealing $3.2 billion worth of intellectual property (IP) with plans to start their own semiconductor company in China.
Despite these risks, many companies fail to take appropriate action when faced with IP theft. The Ministry’s data shows that nearly a third of companies do not pursue legal action against theft due to the high costs and time constraints. Even more troubling is that 55 percent of universities and public institutions lack dedicated research security personnel, making them vulnerable to such incidents.
Low Litigation Rates and Barriers to Justice
One of the key challenges in South Korea’s battle against technology leaks is the low rate of successful litigation in cases of IP theft. According to the Ministry, trade secret infringement cases have a much lower success rate compared to other civil cases. One major factor contributing to this is the difficulty in securing evidence. High researcher turnover rates and the complexity of tracking technology movements make it hard to build a compelling case in court.
Additionally, even when plaintiffs do win lawsuits, the damages awarded are often insufficient to cover the actual losses incurred. The Ministry noted that a lack of clear standards for calculating damages further complicates the situation, leaving many companies without adequate compensation.
To address these legal challenges, South Korea’s government is planning to bolster its legal framework around IP protection, introducing stronger penalties for those involved in technology leaks and making it easier for companies to pursue legal recourse.
New Measures to Combat Technology Theft
In response to the growing threat of technology leakage, South Korea has outlined a series of new measures designed to safeguard its technological assets. These measures include the introduction of a pre-emptive technology leakage prevention system that uses patent big data analysis and expert investigations to identify potential risk areas. The government will also enhance digital response systems and involve counterintelligence agencies to support these efforts.
- Patent big data analysis: By analyzing global technology trends and researcher information, the government hopes to proactively detect areas where technology leaks are likely to occur.
- Stronger civil and criminal penalties: Both brokers facilitating technology leaks and hackers involved in the theft of trade secrets will face harsher penalties.
- Support for companies and institutions: The government will provide consulting services and follow-up support to help companies, universities, and public enterprises strengthen their IP protection measures.
Additionally, South Korea is looking to other countries as examples. The Ministry cited the United States, China, Japan, and the European Union as nations that have implemented strong policies to curb technology theft and protect key technologies like quantum computing and semiconductor manufacturing.
A National Priority
The revenue generated by South Korea’s semiconductor giants, including Samsung and SK hynix, plays a critical role in the nation’s economy. As South Korea continues to advance in key industries, the protection of its intellectual property is becoming an increasingly urgent priority. These latest measures show a commitment from the government to stay ahead of evolving threats and ensure that South Korea’s technological achievements are protected from those who would seek to exploit them.
South Korea’s move to bolster its IP protection measures reflects a broader global trend, with governments recognizing that technology leakage is not just an economic issue but a matter of national security. For South Korea, a country leading in semiconductor and display technology, the stakes couldn’t be higher.