Korea to toughen penalties for chip technology, IP theft
The government will strengthen punishment against individuals who steal semiconductor and other industrial technology secrets from local companies. This decision comes as more people are being apprehended for engaging in such activities on behalf of Chinese and other foreign firms, the Ministry of Trade, Industry and Energy said Tuesday.
The ministry sent the revised Act on Prevention of Divulgence and Protection of Industrial Technology to the National Assembly for approval last November. After it is approved by the Assembly, there will be a sixmonth grace period during which the act’s ordinances will be revised. The act will then go into full effect.
Under the revised law, the penalties for leaking the country’s intellectual property to foreign companies will be significantly increased. The current maximum penalty of 1.5 billion won ($1.1 million) will be raised to a maximum of 6.5 billion won for the country’s key technologies, and a maximum of 3 billion won for lower-level technologies.
For those ordered to make financial restitutions to victims of IP crimes, the size of compensations will increase by three to five times.
The scope of the punitive measures has also expanded, with those acting as brokers in a theft now being liable to face charges. Authorities will also consider intent rather than purpose in criminal investigations.
Under the revised law, the ministry has included additional evaluation categories for approving mergers and acquisitions of Korean companies by foreign firms. These categories will assess the potential impact of the merger on the nation’s security and economy.
The need to revise the law was previously raised in forums, seminars and press conferences in 2022-23, which were hosted by lawmakers and companies or agencies regarding technologies purely developed inside Korea. After the ministry’s proposal for legal updates was passed by the Ministry of Government Legislation, the proposal went to the National Assembly last September.
“The revised law aims to prevent technology theft either by intention or mistake,” a ministry official said. “It’s a shield against cases in which foreign entities establish companies here to steal our technologies. It also prevents those unfamiliar with the law from unintentionally leaking the technologies overseas.”
The number of cases of theft of key technologies peaked last year at 23, the highest since 2019. These incidents occurred across various industries, including semiconductors, displays, rechargeable batteries, and automobiles.
One of the more recent cases involved employees at Samsung Electronics. An official of Semes, a semiconductor and display equipment manufacturer under Samsung Electronics, and three other employees, were arrested last month for sharing the company’s latest semiconductor surface cleaning equipment technology with PNC Process System of China. The theft, according to prosecutors, caused irreparable damage to the country’s semiconductor industry including financial damages of 210 billion won to Semes.
Both the arrested official and his younger brother, who previously headed Semes, face the same charge. One of them was sentenced by an appellate court early last month to a prison term of 10 years.
In another case, police last month requested an arrest warrant for a former Samsung Electronics researcher who leaked data related to the company’s exclusive 20 nanometer DRAM technologies in 2014 to CHJS in China. Among the leaked data were 700 blueprints showing how the Korean firm made its semiconductors.
A professor at the Korea Advanced Institute of Science and Technology (KAIST) said that the revised law has strengthened punitive measures as the original law sometimes ended up acquitting suspects due to insufficient legal grounds.