Korens cleared in trade secrets dispute with SNT Motiv

South Korean auto parts manufacturer Korens and its affiliate Korens EM have been cleared of all charges in a years-long legal battle with larger rival SNT Motiv, after prosecutors found no evidence of wrongdoing in a case involving alleged trade secret theft and breach of trust.

In a ruling issued in late July, the Eastern Branch of the Busan District Prosecutors’ Office concluded that the companies had no criminal liability, reaffirming a similar decision made in October last year by the Busan Metropolitan Police.

The decision effectively closes a dispute that began in early 2022, when SNT Motiv publicly accused Korens and Korens EM of wrongfully acquiring its proprietary technologies and poaching personnel.

A DISPUTE SPARKED BY A PRESS RELEASE

In February 2022, SNT Motiv issued a press release alleging that the Korens firms violated trade secrets.   

Korens pushed back on the claim, saying the employees in question had resigned from SNT Motiv between three and five years prior – well before the issue was first raised.

Furthermore, SNT Motiv filed its formal complaint five months after going public with its accusations.  

“The inconsistent timeline suggests SNT Motiv sought to use legal action and media pressure to block its smaller rivals’ entry into a new market,” a Korens spokesperson said.

Korens also criticized SNT Motiv for failing to provide evidence to support its allegations, arguing that the lack of proof prolonged the investigation by nearly a year. The company said investigative authorities repeatedly requested additional material from SNT Motiv to substantiate its claims.

It further pointed out that SNT Motiv, as a defense contractor, is known to conduct thorough internal reviews before approving employee departures, making the risk of trade secret exposure unlikely.

It added that SNT Motiv had pursued similar legal actions against other companies, many of which were also dismissed without prosecution.

Former and current executives at SNT Motiv are now under investigation for allegedly filing a false accusation, a criminal offense under Korean law if proven.

Korens said that while protection of intellectual property is essential, such protections should not be weaponized by dominant firms to suppress emerging competitors.

“We suffered significant tangible and intangible damage during this period,” the company said in a statement, citing lost business opportunities and suspended development partnerships as consequences of reputational damage.

Write to Sookyung Seo at skseo@hankyung.com

Jennifer Nicholson-Breen edited this article.