The healthcare industry is closely watching the results of the technical dispute mediation applied by Algocare against Lotte Healthcare.
Algocare suspects that Lotte Healthcare had stolen its technology in developing Cazzle, the latter's nutrient dispenser.
According to the Ministry of SMEs and Startups and related industry officials on Thursday, Algocare applied for technical dispute mediation to the Ministry of SMEs and Startups last week.
In technical dispute mediation, an independent Dispute Mediation Committee -- consisting of experts from the private sector -- finds facts and helps the two parties make an amicable compromise and prompt dispute resolution.
Technical dispute mediation can shorten the resolution of a case compared to an official lawsuit, which usually takes two to three years.
According to industry watchers, the mediation team will be composed of three to five people, including a former presiding judge lawyer, this week at the earliest.
"After Algocare applied for mediation, Lotte Healthcare is requesting data and a position," a Ministry of SMEs and Startups official said. "We will help quickly confirm accurate facts."
The technical dispute mediation follows the Fair Trade Commission (FTC) launching a full-scale investigation into whether Lotte Healthcare stole Algocare's idea earlier this month.
Regarding this issue, the Korean Intellectual Property Office (KIPO) is also conducting a separate investigation.
Algocare stressed that the case might proceed to a criminal case.
"In the case of criminal proceedings, we do not have to file a separate lawsuit with the National Police Agency, but there are cases in which criminal charges are automatically filed if the mediations break down and we proceed with the lawsuit," an Algocare official told Korea Biomedical Review.
The dispute between the small-sized startup and the healthcare unit of retail giant Lotte regarding the origin of the nutritional supplement machine started after Algocare CEO Joung Ji-won raised such allegations on Jan. 18.
Joung said Lotte Healthcare obtained information about Algocare's "Nutrition Engine," a cartridge-type nutrient dispenser, and business strategy information, in a 2021 meeting with Algocare.
Algocare was established in November 2019 as a healthcare startup. The company won the Innovation Award at CES with Nutrition Engine and will release the product in March.