Korea Fighting Chinese Company Espionage through Revisions to Unfair Competition Prevention & Trade Secrets Protection Act of Korea

Amendments to the Unfair Competition Prevention and Trade Secrets Protection Act of Korea (“Unfair Competition Prevention Act of Korea”) and the Patent Act of Korea are effective as of August 21, 2024. The Amendments, in short, impose harsher criminal, civil, and administrative penalties while increasing the availability of evidence in civil cases.

The Amendments to the Unfair Competition Prevention Act of Korea were implemented in reaction to the alleged theft of intellectual property by overseas companies and governments. The revisions were pushed for by Korean conglomerate victims of espionage from Chinese companies. The most notable case is the alleged selling of trade secrets by a Korean national working for one of the chip makers to a Chinese company in order to assist the Chinese company to establish a high-tech chip factory.

Along with these Amendments, the Supreme Court of Korea amended the sentencing guidelines for theft of intellectual property to a maximum of 12 years imprisonment from the present nine years for outbound infringers. While, the government amended the Judicial Police Service Act of Korea to give more powers to the Korean Intellectual Property Office to investigate infringement.

All companies should, immediately, implement compliance and reporting systems, do a complete IP Audit, and discuss with your legal counsel ways to develop, and preserve evidence for use by the Korean court system if and when necessary. With the increase in civil and criminal penalties for intellectual property violations, it is essential for companies to consider and understand how to implement a proactive defense via the legal system. For an article on Korea’s Trade Secrets see: Korea’s Trade Secret Law and How to Protect your Trade Secrets in Korea.

Main Revisions in 2024 to the Unfair Competition Prevention Act and Patent Act of Korea

1. Increase in Criminal Fines
   The maximum criminal fine is increased to three times the statutory maximum allowed under law to be imposed on an individual for violations of Korea’s unfair competition laws and for misappropriation of trade secrets in Korea.
2. Extension of Statute of Limitations in Criminal Matters
   The statute of limitation for violation of Korea’s unfair competition laws and for misappropriation of trade secrets in Korea was extended from five years to ten years.
3. Increased Administrative Fines by the Korean Intellectual Property Office
   Korean Intellectual Property Office (“KIPO”) is authorized to impose a fine of up to KRW 20,000,000 for non-compliance with a corrective order issued by the Commissioner of KIPO.
4. Increase in Punitive Damages in Civil Cases for Infringement of IP Rights
   Punitive Damages are increased to five times the actual damages for intentional and willful acts of infringement of patents, trade secrets, and other intellectual property rights.
5. Evidence in Civil Cases from KIPO
   Commissioner of KIPO must provide copies of records related to administrative investigations by KIPO unless the Commissioner has a legitimate reason to deny the request.

Clients and lawyers need to be more diligent in the protection of key company assets. The Korean government has become serious in the protection of IP rights and we, now, increasingly have a legal system that we can utilize to protect rights from violators. With adequate procedures, processes, and rules in place, a company can strategically, efficiently, and aggressively enforce IP rights. Sometimes a little offense is the best defense.

Schedule a consultation with an attorney at: Schedule a Call with an Attorney. For more articles on Korean Intellectual Property Law: please see our Korean Intellectual Property Law Archive.