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IP Newsletter | Summer/Fall 2016
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PATENT
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Industrial Technology Act Amended to Provide Higher Penalties
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After several years of deliberation by the National Assembly, an amendment to the law governing industrial technology leakage was recently passed which now provides for significantly higher criminal and monetary penalties. The Act on Prevention of Divulgence and Protection of Industrial Technology (the "Industrial Technology Act") which was amended (the "Amendment") on March 29, 2016 and took effect from June 30, 2016, reflects the government's growing concern over the potential impact of domestic and foreign leakage of industrial technology.
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Previously, the Industrial Technology Act provided that any person who leaked industrial technology could be punished by imprisonment of up to 5 years or a fine of up to KRW 500 million (approx. USD 450,000), and any person who leaked such industrial technology to use, or cause it to be used, in a foreign country could be punished by imprisonment of up to 10 years or a fine of up to KRW 1 billion (approx. USD 0.9 million). The Amendment now significantly increases the maximum legal penalties to imprisonment of up to 7 years or a fine of up to KRW 700 million (approx. USD 630,000) for domestic leakage, and imprisonment of up to 15 years or a fine of up to KRW 1.5 billion (approx. USD 1.35 million) for foreign leakage, as summarized in the table below.
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Previous Law |
Amended Law |
| Leakage leading to or intent for foreign use |
Up to 10 years imprisonment or up to KRW 1 billion fine |
Up to 15 years imprisonment or up to KRW 1.5 billion fine |
| Leakage lacking actual foreign use or intent for foreign use |
Up to 5 years imprisonment or up to KRW 500 million fine |
Up to 7 years imprisonment or up to KRW 700 million fine |
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Under the Industrial Technology Act, an exporter of information that falls within National Core Technology1 is required to (i) report the export to the Minister of Trade, Industry and Energy ("MOTIE") if the information resulted from R&D without government funding or (ii) obtain approval for export from MOTIE if the information resulted from R&D supported by government funding.
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The strengthened penalties apply to the unapproved export of National Core Technology developed with government R&D funding. In case of non-government funded National Core Technology, if it is exported without reporting, MOTIE may enforce certain measures such as ordering exports to be stopped. Violations of MOTIE's order will cause the strengthened penalties to apply.
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The strengthened penalties are in line with the recent trend towards higher protection of trade secrets by the Korean government. For example, the government recently announced plans (i) to expand the scope of National Core Technology to include the fields of robotics, energy, steel and shipbuilding; (ii) to increase the damages amounts; and (iii) to introduce punitive damages in trade secret civil actions.
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National Core Technology includes specific categories of technologies in the fields of Electrical and Electronics, Automobile, Steel, Shipbuilding, Atomic Power, Information Technology, Space Technology and Biotechnology.
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If you have any questions regarding this article, please contact:
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For more information, please visit our website: www.ip.kimchang.com
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