Breach of Business Ethics?
An allegation was made that “a VR service launched for the first time in the world” by KT Corp (Chairman, Hwang Chang-gyu), the Korean telecommunication giant, with great fanfare, was reportedly stolen from a young venture start-up.
The allegation sis giving a shock to the industry as KT has been named as the best company for win-win growth management over the past three years. However, the allegation that KT stole the patented technology from the venture start-up is fueling the anger of those running down KT for KT’s business morality.
In May this year, KT launched an IPTV service based on virtual reality technology. The service offers play-based learning contents where a child’s image moves and dances with popular characters in videos on the TV. KT widely publicized that the service was the first of its kind in the world at the time. However, there was a controversy arising from the allegation that KT had stolen the patented technology.
According to YTN, a Korean news agency, on September 5, the CEO of a venture company claimed that his company developed the technology in 2012 and patented it. In May of this year, one year later, an IPTV service was launched by KT. He argues that the IP TV service is a copycat version of the venture start-up’s proposal to KT.
According to him, he had met with KT officials to explain the concept of the service after 2012. After registering a formal patent of the technology in 2015, his company delivered a technical proposal to KT and discussed it with KT officials. But last year, out of the blue, KT halted the deliberation with his company, citing reasons such as expenses.
The CEO of the venture start-up claimed, "KT stole directions of contents planning, which we set, and even main copies we created when we made the proposal to KT."
KT refuted his claim, saying that even though it was true that KT received the proposal and reviewed it but they did not infringe on the patent right. KT claimed that they had developed a proprietary technology in advance to prepare for the service and they received a patent on a separate technology around the same time.
In the IT industry, it is pointed out that large companies’ practices of stealing creative ideas from venture start-ups took place again. "We can claim that this case is an unfair competition now that KT stole what others achieved by investing a lot of cost and efforts," an attorney said.