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IP Newsletter | Fall 2018
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PATENT
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KIPO Begins Policing "Idea Theft" Unfair Competition
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The latest amendment to the Unfair Competition Prevention and Trade Secret Protection Act ("UCPA") took effect on July 18, 2018, and introduces a new provision prohibiting unfair competition in connection with "idea theft," or unfair use of the ideas of another that were acquired as part of a business negotiation or transaction. The purpose of the amendment is to provide additional protection for creative business ideas that may not be easy to protect as typical intellectual property such as patents, copyrights, or trademarks.
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The amendment contemplates situations where a smaller business or individual with a new business idea enters negotiations with a larger business to commercialize the idea, and may be required to disclose the idea to the larger business, thus risking losing control of the idea. The potential unfair uses covered by this provision include uses of the ideas of another for one's own business or for a third party's business, as well as providing such information to a third party for their use. However, there is no violation if the person accused of obtaining the idea had previous knowledge of the idea from another source, or if the idea was already widely known in the relevant business field.
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Violation of this new provision can result in civil or administrative liability, but not in criminal liability or penalties for now. Pursuant to this amendment, the enforcement decree to the UCPA was also amended effective September 18, 2018, and expressly grants the Korean Intellectual Property Office (KIPO) the power to investigate violations, adds specific procedures for investigation (e.g., document production, interrogation, site visit, etc.), and grants power to KIPO to order corrective measures. The Judicial Police Squad under KIPO has already expanded its scope of IP enforcement activities to include investigations into idea theft.
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The new provision is primarily designed to help smaller companies who are often required to disclose their business ideas when negotiating with other (often larger) companies for purposes of negotiating some form of business collaboration, and who may find it difficult to adequately protect such ideas under existing IP, trade secrets, or contract law. The government clearly hopes that these additional avenues for enforcement by KIPO will improve protection for the creative ideas of smaller Korean companies and thereby spur greater innovation in the Korean economy. On the other hand, larger corporations are well advised to use caution when receiving business ideas or proposals from smaller businesses during the course of negotiations or business discussions, to avoid unnecessary challenges from smaller businesses in reliance upon the new amendment. |
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For more information, please visit our website: www.ip.kimchang.com
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