[Patent Talk] After Algocare, Now Sling... Is There No Solution to the Ongoing Technology Misappropriation Controversies?

Following the technology misappropriation controversy between Algocare and Lotte Healthcare, an idea plagiarism controversy has now arisen between Sling and Visang Edu. Lotte Healthcare put its investment on hold after an investment meeting with Algocare but then developed a nutritional supplement dispenser similar to Algocare's, and Visang Edu applied to its own app an interface similar to the split-screen layout of Sling's college entrance exam (CSAT) study app. These issues can be viewed from the standpoint of business ethics or morality, but setting aside who is right or wrong, let us look at the legal issues involved.

First, there is the issue of trade secret misappropriation. To be protected as a trade secret, information must satisfy three requirements: it must not be publicly known, it must have economic value, and it must be kept secret. Therefore, even if a non-disclosure agreement (NDA) has been signed to prove that the information was kept secret, it may not be protected as a trade secret if the technology was already publicly known or has no economic value.

Second, there is the issue of unfair competition. In addition to trade secret misappropriation, the Unfair Competition Prevention Act prohibits as acts of unfair competition any acts that infringe another person's economic interests in a manner contrary to fair commercial practices or competitive order. Even where no trade secret has been misappropriated, closely imitating another party's technology may constitute an act of unfair competition.

Third, there is the issue of intellectual property infringement. Where a patent right or design right exists, an imitating technology may be found to infringe it, depending on how the scope of the right is interpreted.

In the Algocare case, the key issues in dispute appear to be trade secret misappropriation and unfair competition, while in the Sling case they are unfair competition and design right infringement. Lotte Healthcare and Visang Edu will need to prove that they merely used widely known technology, while Algocare and Sling will need to prove the existence of proprietary technology with independent economic value.

Is there a solution? Unfortunately, there is no clear-cut one. Whether a technology is already publicly known and free for anyone to use, or incorporates proprietary elements that make it protectable at least under the Unfair Competition Prevention Act, ....