Recent Supreme Court cases have shed light on the requirements for right holders to seek redress under the “catch-all” provision of the Unfair Competition Prevention and Trade Secret Protection Act (the “UCPA”).

Article 2 (1) (k) of the UCPA includes within the definition of unfair competition any “act of infringing another person’s economic interest by using an outcome or other results produced by the person through considerable efforts and investment to benefit the infringer’s own business without permission of the right holder, in a manner that contravenes fair trade practice or competition order.”  This “catch-all” unfair competition provision was introduced in 2013 in order to address various patterns of unfair competition that have emerged due to changes in technology and other factors but that had not clearly been covered by the pre-2013 provisions, which set forth an exhaustive list of specific types of acts of unfair competition.  However, there has been criticism from some quarters that the requirements of this provision are vague, and that lower court rulings on this issue have lacked consistency. 

The Supreme Court’s decisions in Case No. 2019Ma6525 rendered on March 26, 2020 (“Case 1”) and No. 2016Da6525 rendered on September 21, 2016 (“Case 2”) have set forth criteria for determining what is an act of infringing another person’s economic interest under this provision, as follows.

• “Outcome or other results” may include tangible and intangible items, as well as new types of results.  In evaluating another person’s economic interest in an outcome and other results, one must consider reputation, economic value, ability to attract customers attached to the outcome, and market share and competitiveness of the outcome in the relevant business field.

• Whether an outcome or other results were produced “through considerable efforts and investment” is determined on a case by case basis, and requires review of the substance and degree of investment or efforts made by the person in light of the practice and circumstances of the field concerned.  For the economic interest to be deemed infringed by the infringer’s unauthorized use of the outcome, such economic interest must not be in the public domain.

• Using for its own business without consent of the right holder “in a manner that contravenes fair trade practice or competition order” is determined by taking into account the following elements: (i) current and future competitive relations between the rights holder and infringing party, (ii) fairness in view of the commercial practices and competitive order in the industry field relevant to the outcome claimed by the right holder, (iii) the likelihood of the “outcome or results” being replaced by infringing goods/services in the market, (iv) how widely known the infringed goods/services are to consumers or traders, and (v) the likelihood of confusion by consumers or traders.

In Case 1, a magazine publisher printed and sold a photo book containing photographs of BTS, the global boy band phenomenon, without their or their label’s permission.  The Supreme Court ruled that the magazine publisher was in violation of the catch-all provision, because (i) the name and photographs of the boy band and its members had acquired a substantial level of consumer appeal, which was a result of considerable efforts and investment by their label, and (ii) the publisher went beyond the ordinary scope of merely providing information, and instead mass produced a photo book using BTS’s pictures without the artists’ or label’s consent and without any compensation.  Therefore, the publisher took advantage of another person’s achievements in contravention of fair business practices and competition order.

In Case 2, the defendant, who operates virtual indoor golf (“screen golf”) facilities, was accused of improperly using the names, topography, scenery, landscape elements and installations of the plaintiff’s golf courses by transforming them into 3D videos for use in its screen golf facilities without authorization or compensation.  The Supreme Court held that the defendant violated the catch-all provision of the UCPA, because (i) the overall designs of the plaintiff’s golf course were protected by copyright, and the golf courses themselves were a result of the plaintiff’s considerable investment and efforts; and (ii) the defendant’s screen golf operations competed with the plaintiff’s golf courses. 

By establishing specific criteria for applying the catch-all provision, the Supreme Court’s recent rulings will likely improve the consistency of court judgments dealing with this provision.  Going forward, rights holders should have a better basis to determine whether to actively seek remedies through the catch-all provision if conventional remedies under intellectual property law are unavailable.