The amendments to the Unfair Competition Prevention and Trade Secrets Protection Act (the “Unfair Competition Prevention Act”) and the Patent Act will soon come into force on August 21, 2024.
The main points of the amendments to the Unfair Competition Prevention Act and the Patent Act are as follows:
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(1) |
Increased criminal penalties: Criminal fines for unfair competition violations and trade secret misappropriation by corporations have been increased to up to three times the statutory maximum that can be imposed on an individual, and the statute of limitations for corporations has been extended from the current five years to ten years. |
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(2) |
Enhanced punitive damages: Punitive damages of up to five times the actual damages may be awarded for willful acts of infringement, including infringement of patents, breach of exclusive license rights, theft of ideas and misappropriation of trade secrets. |
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(3) |
Introduction of stronger administrative measures: A system for the issuance of corrective orders by the Commissioner of the Korean Intellectual Property Office (“KIPO”) has been established for acts of unfair competition, and a fine of up to KRW 20 million may be imposed for failure to comply with a corrective order. |
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(4) |
Increased availability of evidence in civil proceedings: It is now possible for parties to inspect and request copies of materials related to administrative investigations, and the Commissioner of KIPO cannot refuse a court’s request to provide records without a legitimate reason. |
These amendments are interpreted as part of the government’s overall efforts to deter technology leakage and acts of unfair competition, which have been causing significant damage to the industry recently. To this end, the government launched a government-wide joint technology leakage response team on November 8, 2023, and approved the KIPO Technology Police as a standing organization on February 27, 2024. Further, the government amended the Judicial Police Service Act on January 16, 2024 to expand the scope of KIPO investigations, which were previously limited to the illegal acquisition, use and disclosure of trade secrets, to include a full range of trade secret misappropriation offenses, including preparatory acts, conspiratorial acts and unlawful possession. In addition, on March 25, 2024, the Supreme Court Sentencing Commission enhanced sentencing guidelines for trade secret misappropriation and technology infringement offenses (e.g., imprisonment of up to 12 years, as opposed to the current nine years, for overseas leakage), and strengthened probation guidelines (applicable to cases prosecuted on or after July 1, 2024).
As civil and criminal penalties for intellectual property offenses increase, it will be all the more important for companies to establish and implement rigorous compliance systems throughout their operations. In addition, companies or individuals who are victims of intellectual property offenses or have concerns that their rights may have been infringed, should consider taking a more aggressive stance in enforcing their rights, as effective legal action is now more readily available.
