Lee International

As part of the recent amendment to the Unfair Competition Prevention and Trade Secret Protection Act (the “UCPA”), which became effective as of April 21, 2021, punitive damages were introduced to provide compensation of up to three times of actual damages when the damages are incurred based on misappropriation of technical or business ideas of others in transactions.

The punitive damage was introduced to the UCPA as a remedy available in intentional infringement of others' business secrets in 2019. This revision of the UCPA expands the scope of punitive damages to be available for misappropriation of others’ technical or business ideas.

In addition, the revisions also provide provisions to impose corrective measures for misappropriation of others’ technical or business ideas. If the accused violator dos not follow the corrective measures, personal information of the violator, facts of the violation and details of corrective measures could be publicly announced in the Official Gazette. Meanwhile, there have been some concerns that the corrective measures may not be sufficiently effective as there are no other special sanctions even if they are not followed. However, the enforcement of the revised UCPA is expected to greatly enhance the effectiveness of corrective measures for misappropriation in the future.

Furthermore, even during an administrative investigation, if a party applies for mediation to the Intellectual Property Rights Dispute Resolution Committee, the administrative investigation can be suspended. When the mediation is successful, the administrative investigation will be terminated. It is expected that disputes between small business owners or small and medium-sized businesses/venture companies may be resolved early.

Lastly, this revision establishes a legal basis for the Korean Intellectual Property Office to establish a basic plan every five years and an annual plan for the prevention of unfair competition and protection of trade secrets. It is expected that advanced prevention activities as well as subsequent remedial measures such as punishment for technology leakage and compensation for damages will be strengthened.