An amendment (the “Amendment”) to the Unfair Competition Prevention and Trade Secret Protection Act (the “UCPA”) was passed by the National Assembly on November 11, 2021, which prohibits the unfair use of data and unauthorized use of distinctive signs (e.g., portraits and names) of celebrities as “unfair competitive acts.” The provision prohibiting unauthorized use of data will take effect on April 20, 2022, and the provision prohibiting unauthorized use of distinctive signs such as portrait and name of celebrities will take effect on June 8, 2022.

The importance of data, which is the basis of the digital era such as the Fourth Industrial Revolution and artificial intelligence, has been growing day by day, and new economic value is being created by utilizing big data, but the use and distribution of high-quality data have been hindered due to the lack of legal protections for such data.  In addition, while the production and sale of illegal products using celebrities’ portraits and names have increased and became more diverse, there are limits under current laws to protect celebrities’ property rights and consumers from being damaged from such activities.  The Amendment seeks to establish sound trade order and protect consumers from unfair damages by regulating these acts as potential unfair competitive acts.

The key contents of the Amendment are as follows:

1.   Misuse of Data (newly inserted as Article 2 (1) (k))

The data protected by the UCPA is defined as “technical or business information provided to a specific person or a large number of specific persons for business, accumulated and managed in a substantial amount by electronic means, and not managed as confidential” as defined in Article 2(1) of the Framework Act on the Promotion of Data Industry and Promotion of Utilization, and the UCPA sets forth the following four types of specifically prohibited acts:

i. Acquiring data by theft, deceit, unlawful access, or any other improper means, or using or disclosing such data without access authority;

ii. Using, disclosing, or providing to a third party, data for the purpose of gaining unjust profit or inflicting damage on a data holder by a person who has access to the data in accordance with a contractual relationship with the data holder;

iii. Acquiring data or using or disclosing such data with knowledge of the involvement of (i) or (ii); and

iv. Circumventing technical protective measures for data.

Where a person’s data is misused, that person can file a civil claim for injunction and damages.  The Amendment further provides that a person circumventing technical protective measures for data as described in (iv) may be subject to criminal punishment.
 

2.   Unauthorized Use of Distinctive Signs, Including Portrait and Name of a Celebrity (newly inserted as Article 2 (1) (l))

The Amendment newly adds the act of infringing another person’s economic interests by using a celebrity’s portrait, name, voice, signature, or other identifiable signs for one’s own business without permission in a manner contrary to fair commercial practices or competition order as potential unfair competition.

Significantly, the Amendment defines the unlawful use of data to include not only the direct act of unlawfully acquiring, using, and disclosing data, but also the act of acquiring, using, and disclosing data with knowledge that such unlawful acts were involved in the data’s acquisition, disclosure or use.  Caution is essential to ensure that any data acquired or used is lawfully available.  In addition, an amendment to the Copyright Act to expressly state a right of publicity has been proposed but is still pending before the National Assembly, so the Amendment is expected to be actively utilized for now to protect celebrities’ portraits from unauthorized use.

As we have seen an increase of disputes relating to the so-called “performance theft” provision after its addition to the UCPA as a new type of unfair competitive act, we expect there will be increased disputes relating to the unlawful use of data (item (k)) and the unauthorized use of distinctive signs such as portraits and names of celebrities (item (l)) as well.

It should be noted that the Amendment uses fairly vague or abstract terminology to describe the prohibited “acts,” such as “unfair means,” “unfair profits,” and “methods contrary to fair commercial practices or competition order.”  Therefore, to avoid disputes relating to potentially covered acts, increased vigilance will be necessary until clearer precedents regarding the interpretation of these provisions have been established.