Trade Secrets Law in South Korea
In South Korea, the primary legal framework for protecting trade secrets is the Unfair Competition Prevention and Trade Secret Protection Act (UCPA). This Act defines a trade secret as information—including production methods, sales methods, or other technical or business information useful for business activities—that is not publicly known, is managed as a secret, and holds independent economic value .
⚖️ Legal Protections
1. Civil Remedies
Injunctions: Trade secret holders can seek court orders to prevent or cease the infringement of their trade secrets.
Damages: Victims of trade secret misappropriation can claim compensation for actual damages suffered, and in cases of intentional infringement, punitive damages may be awarded, potentially up to five times the actual damages .
Restoration of Reputation: Courts may order measures to restore the business reputation of the trade secret holder if harmed by the infringement .
2. Criminal Sanctions
Penalties: Individuals found guilty of trade secret misappropriation may face imprisonment or fines. For example, penalties can include imprisonment with labor for up to three years or fines up to 30 million KRW for certain offenses .
Corporate Liability: Corporations can also be held liable, with potential fines up to three times higher than those for individuals, and the statute of limitations for corporate infringements has been extended from five to ten years .
3. Administrative Measures
Corrective Orders: The Commissioner of the Korean Intellectual Property Office (KIPO) can issue corrective recommendations to cease acts of unfair competition or remove infringing marks within a specified period .
Investigation Powers: KIPO has the authority to investigate unfair competitive acts, including entering business or manufacturing facilities to examine related documents and collect necessary products for testing .
🔐 Protection Criteria
To qualify for protection, information must meet the following criteria:
Secrecy: The information must not be publicly known and must be managed as a secret.
Economic Value: The information must have independent economic value.
Reasonable Efforts: The holder must have taken reasonable steps to maintain its secrecy.
The 2019 amendment to the UCPA relaxed the requirement from "reasonable efforts" to simply "managed as a secret," broadening the scope of protection .
🛡️ Best Practices for Protection
To safeguard trade secrets, businesses should:
Implement Confidentiality Agreements: Use Non-Disclosure Agreements (NDAs) with employees, contractors, and partners.
Restrict Access: Limit access to sensitive information on a need-to-know basis.
Secure Storage: Utilize physical and digital security measures, such as locked cabinets and encrypted files.
Employee Training: Conduct regular training sessions to educate staff about the importance of maintaining confidentiality.
Mark Confidential Information: Clearly label documents and files containing trade secrets as "confidential."
📌 Summary Table
| Aspect | Details |
|---|---|
| Legal Framework | Unfair Competition Prevention and Trade Secret Protection Act (UCPA) |
| Definition of Trade Secret | Information not publicly known, managed as a secret, with economic value |
| Civil Remedies | Injunctions, damages (including punitive damages), restoration of reputation |
| Criminal Sanctions | Imprisonment, fines; extended statute of limitations for corporations |
| Administrative Measures | Corrective orders, investigation powers by KIPO |
| Protection Criteria | Secrecy, economic value, reasonable efforts (relaxed to "managed as a secret") |
| Best Practices | NDAs, access restrictions, secure storage, employee training, labeling |
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