The Ministry of Trade, Industry and Energy (the “MOTIE”) held its 43rd Industrial Technology Protection Committee (the “Committee”) on May 30, 2023 and announced a draft amendment to the Act on Prevention of Divulgence and Protection of Industrial Technology (the “Industrial Technology Act” or “ITA”). The draft amendment seeks to expand the scope of application of the ITA to better manage national core technologies (“NCTs”) and includes a proposed change to the export review process of NCTs that simplifies the process for exporting NCTs with a lower risk of technology divulgence in order to ease the burden on companies with such technologies.

1.   Broader Application of the ITA and Simpler Process for Certain NCTs
 

The draft amendment, by expanding the scope of application of the ITA, seeks to bring under the ambit of the law several grey areas that have avoided the law’s application due to the lack of specific provisions or clear interpretation. 
 

The draft amendment to the ITA includes provisions that mandate the protection of NCTs by granting the Government the power to order companies to file for NCT determination and by obligating entities holding NCTs to register them. Additionally, the Government may attach conditions to the export of NCTs in both approval and declaration cases (currently conditions may be attached only in approval cases) and may later conduct audits on the implementation of those conditions. The scope of punishment for technology divulgence has been expanded by lowering the requisite intent of the offender from a deliberate act to an intentional act. In terms of punishable acts, the draft amendment has added the introduction, arrangement, and solicitation of technology divulgence. Additionally, compulsory enforcement fines may be imposed in case a party liable for unlawful M&A fails to comply with the order for restoration to the original state.  

The draft amendment will likely be submitted to the National Assembly this year (legislation announcement by July – regulatory review by October – approval by the president by November). The detailed language of the draft amendment is yet to be made public. More information on the specifics will roll out during the remaining legislative process.
 

2.   Proposed Amendment of Review Process of NCT Export
 

The MOTIE seeks to ease the burden on the companies intending to export NCTs with lower risk of technology divulgence by improving the review process. The relevant MOTIE notice (Industrial Technology Protection Guide) will be amended by July 2023.

• Annual blanket review system for overseas approval of finished drugs: When exporting technology for finished drugs for overseas approval purposes, the technical data for overseas approval may receive prior blanket approval annually. At the time of the actual export, the export review period may be shortened with a review by an expert committee.

• Annual blanket review system for joint research with overseas subsidiaries: In case of joint R&D between a domestic institution and an overseas institution (subsidiary) wholly owned by the domestic institution, the joint R&D project may be subject to prior blanket approval annually, followed by ex-post report, to shorten the time spent on review.

• Written review for export in response to discovery in overseas patent dispute: In case of exporting technical materials due to overseas patent disputes, such as an ITC lawsuit in the US involving discovery, the export review period may be shortened by prioritizing written review over in-person review.

• Export of technology under a non-exclusive license: Export of technology under a non-exclusive license or the transfer of only the technical information already disclosed in a patent application is exempt from export review.
   

The MOTIE is engaged in active discussions to improve relevant laws and regulations beyond the draft amendment to the ITA. As such, companies should keep an eye on future developments in this area. 

[Korean Version]