Enforcement of Revised ‘Unfair Competition Prevention Act’ and ‘Patent Act’ on August 21, 2024, including stronger measures to prevent technology theft
From August 21, 2024, the cap on punitive damages for technology theft is increased from three times to five times, and the Commissioner of the Korean Intellectual Property Office (KIPO) may issue correction orders for unfair competition behaviors such as theft of ideas. Failure to comply with such a correction order will result in a fine of up to 20 million won.
KIPO announced that the revised ‘Unfair Competition Prevention and Trade Secret Protection Act’ (the “Unfair Competition Prevention Act” hereinafter) and corresponding revisions to the ‘Patent Act’ will take effect on August 21, 2024.
1. Up to 5 times punitive damages for technology theft
In order to raise awareness of technology theft, including in relation to patent rights, trade secrets, and idea theft, the limit for punitive damages has been increased from three times to five times damages. This is a measure to break the vicious cycle in which a perception that 'copying technology is profitable', rather than developing technology and owning patents or trade secrets, has become commonplace, and in which victimized companies often abandon lawsuits because the amount of damages compensated is insufficient even if they win a suit.
2. Direct correction order by the Commissioner of KIPO for unfair competitive behavior such as idea theft
The KIPO Commissioner will directly issue correction orders for unfair competition behaviors such as idea theft in the process of technology transactions such as business proposals, bidding, and public offerings, as well as infringement of publicity rights by unauthorized use of names and portraits of celebrities.
Previously, KIPO could conduct administrative investigations in relation to unfair competition behaviors and issue corrective recommendations if violations were recognized. However, the corrective recommendations were literally only recommendations and were not enforceable, so there has been a limitation that it is difficult to prevent continuous unfair competition.
This revision is expected to overcome these limitations and secure the effectiveness of a corrective recommendation to quickly stop an ongoing technology theft. Failure to comply with a correction order from KIPO will subject the offender to a fine up to 20 million won.
3. Tripling of corporate fines and confiscation of infringing products and manufacturing facilities in the case of trade secret infringement
In order to control trade secret infringement and unfair competition by corporations, in consideration of the relatively high participation rate* of corporations in trade secret infringement crimes and unfair competition offenses, the fine for corporations will be increased to up to three times the fine imposed on individuals.
In addition, the law introduces a new provision that allows for the confiscation of not only trade secret infringing products but also their manufacturing facilities. This will preemptively prevent secondary damage caused by reproduction of infringing products.
4. Penalties for damaging or deleting trade secrets by hacking, etc.
The Act establishes provisions for behaviors of damaging, destroying, or altering trade secrets. The Unfair Competition Prevention Act will also make it possible to punish the destruction or deletion of trade secrets by hacking, etc., in addition to the scope of traditional trade secret infringement activities such as illegal acquisition, use, or leakage.
Those who damage or delete trade secrets for unlawful purposes will be punished more severely, including by imprisonment for up to 10 years or a fine of up to 500 million won.
<Main contents of the revised Unfair Competition Prevention Act>
< Main contents of the revised Patent Law >
[Source: KIPO]
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