KFTC Fines Hanse Mobility 420 Million Won for 'Stealing a Subcontractor's Technology'

Steals a subcontractor's intangible know-how and patents it
First-ever sanctions for technology misappropriation through prototype reverse engineering

Hanse Mobility Co., Ltd., an auto parts manufacturer, was sanctioned by the Korea Fair Trade Commission for unauthorized analysis of a subcontractor's prototype to steal technical information and patenting it solely under its own name.

The KFTC said on the 2nd that it had decided to issue a corrective order to Hanse Mobility and impose a fine of 420 million won. The company commissioned K, a subcontractor, to develop drive shaft parts for automobiles. Over a period of more than two years, K submitted more than 1,600 parts samples and 28 heat-treatment inspection reports to Hanse Mobility. During this process, Hanse Mobility sought to switch to a new supplier, D, to reduce its procurement costs, among other reasons. When D's samples repeatedly fell short of the buyer's requirements, Hanse Mobility secretly compared and analyzed prototypes from K and D.

Hanse Mobility determined that the key factor behind the difference in strength between the two products was the core hardness value identified by K, and applied that data to D's prototype, resolving the quality issue at once. Furthermore, in February 2020, without consulting K, it applied for a patent solely under its own name covering technology within a range virtually identical to the values derived by K, and completed registration in July of the following year.

The KFTC emphasized that this was the first case in which it recognized that intangible "information" and know-how that can be discovered by analyzing or testing prototypes qualify as technical data under the Subcontracting Act, and imposed sanctions accordingly, extending beyond tangible materials such as documents and drawings. The KFTC said, "We have imposed severe sanctions on a mid-sized company, acting as the principal contractor, for reverse-engineering a small subcontractor's technical data and prototypes without authorization during a subcontracting transaction and applying for and registering a patent solely under its own name." It added that it would continue to closely monitor unfair technology theft targeting small and medium-sized businesses.

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