The introduction of the Korean-style evidence disclosure system (K-Discovery), aimed at preventing technology theft from small and medium-sized enterprises, raises concerns that it could lead to the leakage of domestic trade secrets if applied to patent law. There are fears that foreign competitors or global patent trolls could exploit patent lawsuits to access internal documents of domestic companies.
According to the government and industry sources, a revision of the Act on Promotion of Cooperation between Large and Small Enterprises, which includes the implementation of K-Discovery, passed the National Assembly in January. The Korean Intellectual Property Office (KIPO) is now pushing for amendments to patent law to extend this system to general patent infringement lawsuits. The core of the proposal allows court-appointed experts to investigate infringement-related materials at the factories and offices of the parties involved in the lawsuit.
The government argues that this measure is necessary to protect companies suffering from technology infringement, as small businesses often struggle to secure evidence from their opponents. KIPO has reported that the success rate for plaintiffs in patent infringement lawsuits is only 11.1%.
However, industry representatives express concern that expanding this system to general patent lawsuits could provide foreign competitors or non-practicing entities (NPEs) with a means to obtain sensitive technical information from domestic firms. Key information regarding semiconductor manufacturing processes and equipment operations is difficult to discern from products alone. There is a risk that such materials could be included in the scope of investigations under the pretext of verifying patent infringement.
For instance, SK Hynix has faced numerous patent infringement lawsuits related to high-bandwidth memory (HBM) from U.S. NPEs throughout the year, raising the possibility that similar situations could arise domestically.
Documents revealed during domestic lawsuits could also be used in foreign litigation. A semiconductor industry insider stated, "While we understand the intention behind expanding the Korean-style discovery, there must be specific measures to restrict the use of materials obtained during investigations to prevent them from being diverted to foreign lawsuits, along with penalties for violations."
The costs associated with responding to lawsuits are also a concern. Companies must sift through vast amounts of internal documents to identify relevant materials and trade secrets. KIPO estimated that the cost for a single expert conducting an on-site investigation would be around 6 million won, but further empirical research on the costs of managing trade secrets is planned for the future.
KIPO maintains that investigations will be allowed under strict conditions and that access to reports containing trade secrets will be limited. In contrast, industry representatives argue that post-incident penalties will not be sufficient to recover leaked technology, emphasizing the need for robust protective measures.
Lawmakers also share these concerns. Representative Choi Soo-jin of the People Power Party has gathered information from KIPO and the Supreme Court's Administrative Office to assess the burden on companies and measures for technology protection. This issue is expected to be discussed during the National Assembly's audit of KIPO on the 13th.
Representative Choi stated, "I fully agree with the intention to assist patent holders who suffer from evidence imbalance and to support small businesses. However, it is prudent to first verify the on-ground outcomes of the cooperation law set to take effect in 2028 before discussing a full expansion of patent law."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.