[Alpha Biz= Paul Lee] Seoul, April 22, 2025 — The Supreme Court of South Korea has upheld a ruling confirming that LS Mtron, an affiliate of LS Group, unlawfully misappropriated core manufacturing technology from a subcontractor and registered it as its own patent. The court also confirmed that a portion of the technology was transferred to LS Mtron’s Chinese subsidiary without authorization.
The subcontractor, referred to as Company A, developed an innovative mold processing technique for automotive hose components as part of a government-backed R&D project with LS Mtron between 2011 and 2012. The project received approximately KRW 678 million (USD 500,000) in public-private funding.
However, LS Mtron later demanded confidential technical documents from Company A and used them to file a patent under its own name, excluding the original developer. The court ruled that this constituted unauthorized use of proprietary technology. The rights to the patent were later transferred to Cooper Standard Automotive & Industrial, a company created by LS Mtron through a business spin-off in 2018.
In a related decision, the Fair Trade Commission imposed a KRW 1.386 billion (approx. USD 1 million) fine on Cooper Standard. The Supreme Court fully upheld the fine, marking one of the largest penalties ever imposed in a technology misappropriation case in South Korea.
Company A, once a promising SME with annual revenues of KRW 4 billion, was unable to recover from the financial damage and closed its business in 2022. The company received only KRW 280 million in compensation, far less than the damage incurred.
This case highlights ongoing concerns about unfair practices and technology theft faced by SMEs in their dealings with large corporations. According to government data, 88% of technology leakage cases in South Korea from 2019 to 2024 involved SME victims.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
