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Amendments Strengthening Protection of Rights Holders Under the Trade Secret Protection Act and Patent Act

2024.03.06

Amendments to the Act on the Prevention of Unfair Competition and Protection of Trade Secrets and the Patent Act (collectively, the “Amendments”), which were passed by the National Assembly earlier this year and were promulgated on February 20, 2024, will come into force on August 21, 2024.

As previously reported in our newsletter of January 2024 (Link), the Amendments will (i) strengthen criminal penalties for unfair competition crimes and misappropriation of trade secrets, as well as impose enhanced penalties against corporations (e.g., up to three times the statutory maximum that can be imposed against an individual, and extend the statute of limitations from the current five years to ten years); (ii) establish a strong punitive damages system that allows punitive damages of up to five times the actual damages for intentional infringement of patents or exclusive licenses, theft of ideas, or misappropriation of trade secrets; and (iii) grant the Commissioner of the Korean Intellectual Property Office (“KIPO”) the authority to issue corrective orders for unfair competition violations.

Once implemented, the Amendments are expected to facilitate more effective prevention and legal measures against the infringement of intellectual property rights overall, which may lead to more proactive enforcement of intellectual property rights in the future.

In particular, the Amendments will grant the Commissioner of the KIPO stronger enforcement authority against acts of unfair competition. Previously, the Commissioner of the KIPO could issue “corrective recommendations” against acts of unfair competition, but such recommendations lacked enforcement power and thus were not very effective against ongoing acts of unfair competition. In contrast, the Amendments give the Commissioner of the KIPO the authority to issue corrective orders and impose fines of up to KRW 20 million for non-compliance. Accordingly, it is anticipated that the KIPO will take more assertive administrative actions against individuals or entities that engage in acts of unfair competition.

In addition, the Amendments will resolve the difficulty of using the results of administrative investigations as evidence in civil litigation. Specifically, the Amendments allow parties in civil actions to request access to and obtain copies of material in related administrative investigations of the KIPO. In the past, acts of unfair competition, such as the theft of ideas, had been especially difficult to prove during civil litigation because most of the evidence tended to remain under the control of the alleged misappropriating party. When the Amendments are implemented, it will be possible to use evidence from an administrative investigation in a civil action for injunction, damages, and the like.

Therefore, following the Amendments, rights holders may proactively consider taking advantage of the corrective order system of the KIPO and utilize evidence collected through the procedure before commencing a civil action.

 

[Korean Version]

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