Lotte Healthcare, a prominent South Korean conglomerate, has recently come into conflict with the government over allegations that it stole technology from a local startup named Algocare.
Both companies displayed pill dispensing machines at the 2023 Consumer Electronics Show (CES) in Las Vegas earlier this month.
According to the news report citing the Ministry of SMEs and Startups, the ministry sent a technology theft investigator and a lawyer to Algocare as soon as it became aware of Lotte Healthcare’s alleged stealing of the startup’s pill dispenser technology.
The article stated, “If the victim asks us for arbitration, we will mediate the dispute as soon as possible. We will finance the victim to take legal action if arbitration fails to resolve the issue.”
The allegations stem from an online statement by Algocare, in which the startup claims Lotte Healthcare displayed an imitation of Algocare’s Nutrition Engine nutrient dispenser at CES.
Algocare had previously won an innovation award for the dispenser, which is set to launch in March.
According to Joung Ji-won, CEO of Algocare, Lotte Healthcare used information gathered at meetings between the two companies from September to October 2021 to develop its product.
The two companies had decided not to partner after those meetings.
Joung, a lawyer turned entrepreneur, also submitted specifications of both companies’ products and voice recordings of her phone conversations with Lotte Healthcare’s executive general manager as evidence of the alleged technology theft.
Algocare then filed a lawsuit against Lotte Healthcare for violating the Fair Trade Act and the Unfair Competition Prevention Act.
Lotte Healthcare has denied the allegations, stating in a press release that its Fillkey product is a smart pill dispenser that uses a different mechanism and can dispense various types of pills, regardless of their shape and size.
The company also said that after the end of talks with Algocare in October 2021, it decided to produce its dispenser and entrusted a subsidiary of Lotte Group, Canon Korea, with the project.
The matter is still ongoing, and seeing how it is resolved will be interesting.
It reminds companies of the importance of respecting intellectual property and not engaging in unethical practices.