"From LS Cable's Blueprints to Equipment Leaks"...Taihan Cable Executives Referred to Prosecutors

Taihan Cable Faces Allegations of Leaking Submarine Cable Plant Design
Police Conclude After Three-Year Investigation: "Allegations Substantiated"
Factory Layout Leak Confirmed, Similarities in Equipment Structure Also Found

The police, who have been investigating allegations for three years that Taihan Cable leaked LS Cable's subsea cable technology—LS Cable being the number one company in the domestic cable industry—have concluded that trade secrets were unfairly acquired. The main issue in this case was whether the core factory layout for subsea cable production had been leaked. During the investigation, the police determined that even key equipment, such as the turntable (a facility for winding, storing, and withdrawing cables), showed a high degree of similarity.

Is it know-how or not... Police acknowledge the charges after three years

Overview of Taihan Cable’s Dangjin Cable Factory. Taihan Cable

The Industrial Technology Security Investigation Unit of the Gyeonggi Nambu Provincial Police Agency referred a total of 13 individuals—including four executives and employees from Taihan Cable, seven associates from Gaon Architects & Engineers, and two employees from the equipment manufacturer SFA—along with the respective corporations, for violation of the Unfair Competition Prevention Act on May 28.

Executive A and others from Taihan Cable are accused of unfairly acquiring and incorporating trade secrets such as the internal facility layout of LS Cable's factory into their designs during the construction of the Subsea Cable Plant 1 in Dangjin, Chungcheongnam-do from 2022 to 2023.

Taihan Cable has been suspected of leaking the internal facility layout and design layout of LS Cable's Donghae Plant 3 during the construction of its Dangjin Subsea Cable Plant 1. LS Cable maintains that the design layout of a subsea cable factory constitutes unique know-how. This is because subtle differences in the distance, angle, and tension control between facilities can determine product yield. The building's design also changes depending on how the equipment is installed, including the height of the structure.

Some argue that the facility layout is simply the result of process order or efficient workflow. Taihan Cable also maintains that the facility arrangement does not constitute any particular know-how. In other words, for something to be recognized as a trade secret, it must meet criteria such as providing a competitive economic advantage and being unknown to the public (non-public information).

Similarity found from factory layout to core equipment

Panoramic view of LS Cable's Donghae Plant. LS Cable

LS Cable developed the world's fourth ultra-high voltage subsea cable in 2007 and completed Korea's first dedicated subsea cable factory in 2009. LS Cable commissioned Gaon Architects & Engineers to design and construct Donghae Plants 1 through 4. Later, Gaon Architects & Engineers entered into a contract with its competitor, Taihan Cable, and began designing their factory.

The police determined that Taihan Cable's plant had a far greater degree of similarity to LS Cable's plant than mere reference. Even fine details such as the building's height and level differences were reportedly nearly identical. During four rounds of compulsory investigation, many internal documents from LS Cable were reportedly found within Taihan Cable.

In the course of the investigation, it was also confirmed that not only the factory layout but also the structure of core equipment such as the vertical accumulator and turntable overlapped. In the cable industry, the method of winding, storing, or withdrawing cables is managed as know-how. This is because depending on the curvature or method, the conductor can be damaged or the cable can become twisted.

The vertical accumulator is a key piece of equipment that determines the quality of the cable insulation layer and is considered a central facility in manufacturing. The turntable is a storage and transport device that winds the produced cable for storage or unwinds it under constant tension for installation prior to shipment. The police also found identical characteristics in the structure and placement of this equipment.

Taihan Cable: "We did not use LS Cable's trade secrets"

Gyeonggi Nambu Provincial Police Agency. Yonhap News Agency

Given that both companies are leading the domestic cable industry and have been competing over subsea cable technology, which is considered a core future technology, a fierce legal battle is expected in this case. After the police raided Taihan Cable in July 2024, LS Cable issued a statement claiming, "Taihan Cable contacted Gaon Architects & Engineers first and repeatedly requested design services, and the contract amount was reportedly more than twice that of LS Cable."

Taihan Cable maintains that the information at issue cannot be considered a trade secret. The company has repeatedly argued, "It is not true that we repeatedly requested designs from Gaon Architects & Engineers first, and we do not know the contract amount of our competitor." They also stated, "We produced and installed subsea cable equipment through specialized companies." Gaon Architects & Engineers and others have also reportedly denied the allegations, asserting that the information in question does not constitute a secret.

A police official stated, "We have determined that the charges are valid and have referred the case for prosecution."

Meanwhile, Taihan Cable reiterated its denial of the allegations in a statement released that day, saying, "The referral is merely the initial judgment of the investigative agency, and it does not confirm any illegality or responsibility," and "At no point during the construction of Subsea Cable Plant 1 did we use, instruct, or conspire to use another company's trade secrets." Addressing claims of similarity in structure and facility arrangement, the company stated, "The factory was built after comprehensively considering our own business plans, site conditions, equipment specifications, and logistics flow," and "Given the characteristics of production processes, it is common for certain process flows or facility arrangements to appear across the industry, and this alone does not constitute use of a particular company's trade secrets."

This content was produced with the assistance of AI translation services.