Controversy is brewing that Lotte Healthcare, an affiliate of Lotte Group, copied items from startup Algocare. Algocare disclosed the damage and is currently preparing a lawsuit. In the midst of this, even the Department of Small and Medium Enterprises has started to review whether Lotte Healthcare is infringing on its technology.
Healthcare startup Algocare claims Lotte Healthcare acquired business strategy information about nutrient distributors at a meeting in 2021 and stole it.
Jeong Ji-won, CEO of Algocare, claimed, “Lotte Healthcare learned about the cartridge-type nutrient dispenser ‘Nutrition Engine’ and business strategy in a meeting with Algocare, and then brought it to launch a product called ‘Kazzle.'”
According to CEO Jeong, Algocare received proposals for investment and business cooperation from Lotte Ventures and Lotte Healthcare for about two months from September to October 2021, and shared information about products and business strategies being developed with Lotte Healthcare. In October of the same year, when the investment discussion in Algocare was suspended, Lotte Healthcare released a nutrient distributor product, Cassel, similar to Algocare.
Lotte Healthcare recently unveiled Kazzle at CES 2023, the world’s largest consumer electronics and IT exhibition held in Las Vegas, USA.
CEO Chung claims that Lotte Healthcare has stolen ideas such as the core of its products, such as the structure and principle of the cartridge, and the concept of the distributor.
He also predicted future court battles. This is because Lotte Healthcare’s act of copying its core ideas and business model exactly one year after the investment discussion meeting is legally and socially serious. CEO Jeong said, “We are taking legal action as it is deemed to be in violation of the Fair Trade Act and the Unfair Competition Prevention Act.”
In this regard, Lotte Healthcare directly rejected Algocare’s claim by issuing a statement saying, “Theft is not true at all.”
Lotte Healthcare said, “From the time of reviewing the new business, we already had an idea for selling functional health food subdivided based on a customized health management platform.”
When both sides’ arguments showed no signs of abating, they eventually went into the mid-term division. Regarding this case, the Ministry of Small and Medium Businesses and Startups expressed its intention to make efforts to achieve mediation when the victim company applies for an administrative investigation into technology infringement and technology dispute mediation, and plans to support the cost of litigation if that mediation is not successful.
An official from the Ministry of Small and Medium Businesses and Startups said, “To identify the case, we are directly visiting the victim company and reviewing the evidence presented.”
Reporter Kim Jeong-woo enyou@hankyung.com
