Unfair Competition Prevention And Trade Secret Protection Act
UNFAIR COMPETITION 'PREVENTION AND TRADE SECRETPROTECTION ACI'
ActNo. 911, Promulgated 00 December 30, 1961 As last amended by Act No. 7289, December 31, 2004
TABLEOFCONTENTS
CHAPfER I : Generai Pmvisions
Article 1 Article 2
Purpose . Definitions .
CHAPTER n : Pmhibition of Unfair Competitive Acts
Article 3 Article 4 Article 5
Article 6 Article 7 Article 8 Article 9
Prohibited Use of National Flags and National Emblerns etc .. Injunction against Acts of Unfair Competition ..
Liability for Compensation of Damages from Acts of Unfair Competition .
Restoration of Reputation Harmed by Acts of Unfair Competition . Investigation of Unfair Competitive Acts etc .. Corrective Recommendation to Violations .. Hearings .
CHAPTER ID : Pmtection of Trade Secrets
Article lO Injunction against Infringement of Trade Secrets etc . Article Il Liability for Damages for Infringement of Trade Secrets .. Article 12 Restoration of Reputation of the Person Possessing Trade Secrets · Article 13 Exception for Bona Fide Persons . Article 14 Statute of Limitations ..
CHAPTER IV : Supplementary Pmvisions
Article 14bis Presumption etc. on the Amount of Damages . Article 14ter Submission of Materials .
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Unfair Competition Prevention And Trade Secret Protection Act
Artide 15 Relationship with Other Acts . Artide 16 Dclctcd .
Artide 17 Dclcgation or Authority .. Artide 18 Penai Provision .
Artide 18his Attcmptcd Crune .
Artide 18/L'!' Criminal Intent and Conspiracy · ·· ··..· ·..·..·..· Artide 19 Dual l.iahility .. Artide 20 Administrativc linc .
AI)I)F:NI)A ..
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Unfair Gompetition Prevention And Trade Secret Protection Act
CHAPfER I GENERA:L~PRQVISIQNS,
Article 1 Polpose
The purposeof this Act is to maintainorderly trade by preventing acts of unfair competi- tion such as improper use of domestically well-known trademarks and trade names, and bypreventing infringement of trade secrets.
Article 2 Definitions
The definitions of tenns used in this Act are as follows: (1) "Acts of unfair competition" means any of the following acts.
(i) an act of causingconfusion with another person's goods byusing signs identicaI or similar to another person's name, trade name, trademark, container or package of goods orany other sign widely known in the Republic of Korea as an indication of goods, or by selling, distributing, importing or exporting goods with such signs; (ii)an act of causing confusion with another person's commerciaI facilities or activities by using signs identical or similar to another person's name, trade name, emblem or any other sign widely known in the Republic of Korea as an indication of commerce; (iii) in addition to the act of causing confusionprovided in subparagraph (a) or (b) of this Article, an act of doing damage to distinctiveness or reputation attached to another person's sign by using the sign identical or similar to another person's name, trade name, trademark, container or package of goods; or any other sign widely known in the Republic of Korea as an indication of goods or commerce, or by selling, distributing, importing or exporting goods with such signs, without due cause as prescribed by Presidential Decree for instance noncommercial use; (iv) an act of causing confusion about the source of origin by falsely marking the source of origin on goods or in an advertisement, on the trade documents communicated to the public or in communications, or by selling, distributing, importing orexporting goods falsely marked with the source of origin; (v) an act of making a mark on goods, advertisements, trade documents communicated to the public or in communications, or selling, distributing, importing or exporting goods marked with a mark that would mislead the public into believing that the pIace of pro- duction, manufacture or processing is different from the actual pIace of production, man- ufacture or processing; (vi) an act of falsely assuming another person's goods, or an act of making a mark or advertising in at information useful for business activities that are not publicly known, has independent economie value, and has been maintained and managed as secrets through considerable efforts; or
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Unfair Competition Prevention And Trade Secret Protection Act
(vii) an al: I or using a Irademark that is identica) or similar lo a tradcmark rcgistcrcd
in an)' contracting state to the Paris Convention l'or the Protcction or Industriai Propcrty
(rclcrrcd to as "thc Paris Convention") or contracting state lo the Tradcmark l.aw Trcatv by a person who is or was an agent or a represcntativc or thc owncr or the tradcmark.
within thc onc-ycar pcriod before the date on which thc ad was carricd out, and including acts of selling, distributing, importing or exporting goods with such marks without due
cause.
(viii) an act or rcgistcring, possessing, translcrring or using a domain name by an unlawlul
holdcr l'or any 01' thc following purposcs where the dornain name is idcntical or similar lo another person's narne, tradc name, trademark or other mark widely recognized in
the Repuhlic 01' Korea: (a) sclling or assigning a rnark. such as a trademark, to an lawful holder or a third
party;
(b) preventing a lawful holder from registering or using a domain name;
(c) obtaining any commerciai interests;
(ix) an act of transferring, assigning, exhibiting, importing or exporting goods whose
shape (referred to as the form, image, color, gloss or any combination of these, including
the shape of any test product or product introduction) has been copied from the goods
produced by another person. However, this provision does not apply to either of the
following acts :
(a) an act of transferring, assigning, exhibiting, importing or exporting goods whose
shape has been copied from other goods more than three years after the date on which
the shape of the other goods was completed, such as when the prototype was produced;
(b) an act of transferring, assigning, exhibiting, importing or exporting goods whose
shape has been copied from other goods that are identical to the goods ordinarily pro-
duced by another person (or from other goods whose function or utility is identical
or similar to the goods ordinarily produced by another person);
(2) "Trade secret" means information, including a production method, sale method, useful
technical or business information for business activity, that is not known publicly, is the
subject of considerable effort to maintain its secrecy and has independent economie value.
(3) "Infringement of trade secrets" means any of the following:
(i) acquiring trade secrets by theft, deception, coercion or other improper means (referred
to as "an aet of improper acquisition"), or subsequently using or disclosing the improperly
acquired trade secrets (including informing any specific person of the trade seeret while
under a duty to maintain secrecy);
(ii) acquiring trade secrets or using or disclosing them with the knowledge that an aet
of improper acquisition of the trade secrets has occurred or when the lack of such knowl-
edge was caused by gross negligence;
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UnfairCompetition Prevention And Trade Secret Protection Act
(iii) after trade secrets havebeen acquired, using or disclosing the them with knowledge -t1Tat-an-"act ofimproper-acquisition-ef-the.;trade~secret"s~has·eccurreder··when4he-laok of such knowledge was caused by gross negligence; (iv) using or disclosing trade secrets to obtain improperbenefits or todamagethe .owner of the trade secrets while under a contractual or other duty to maintain secrecy of the trade secrets; (v) acquiring trade secrets, or usingor discIosing them with the knowledge that the trade secrets have been disclosed in the manner provided in subparagraph (iv) of this ArticIe or when gross negligence wasthe cause of the disclosureor the lack of such knowledge; (vi) after acquiring trade secrets, using or disclosing them with the knowledge that they had been discIosed in a manner provided in subparagraph (iv) ,of this Article, or when grossnegligence was the cause ofthe disc1osureorthe lackofsuch knowledge,
(4) "Domain name" means a number, a letter, or a sign, or any combination of these, that fans under an Internet address composed of numbers.
CHAPrER n PROlDBmON OF UNFAIR COMPETITIVE xcrs
Article 3 Prohibited Use of National Flags and National Emblemsetc.
(1) A person may not use as a trademark a symbol that is identical or similar to the national flag, emblem or other insignia of any contracting state to the Paris Convention, a member of the World Trade Organization, or contracting state to the Trademark Law Treaty, a mark of an international organization unless authorized by the State or interna- tional organization concerned.
(2) A person may not use as a trademark a symbol that is identical or similar to any indication of inspection or certification of the government of any contracting state to the Paris Convention, a member of the World Trade Organization or contracting state to the Trademark Law Treaty unless authorized by the government of the state concemed.
Article 4 Injunction against Acts of Unfair Competition
(I) A person whose business interest is injured or threatened by an act of unfair competi- tion may seek a court injunction or preventive order against a person who engages in the act of unfair competition.
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Unfair Competition Prevention And Trade Secret Protection Act
(2) Whcn a person St:t:KS lcgal action undcr paragraph (I) 01' this Article, the person may rcqucst thc dcstruction 01' the goods that prornotc thc ad 01' unfair compctition. thc rcmoval 01' thc Iacilitics used during the act, the canccllation 01' thc domain namc registration and any other rneasures neccssary.
Article ::; Liability for Cornpensation of nam~cs fmm Acts of Unfair Competition
A person who intcntionally or negligently causes damagc to anothcr person's business interest is liablc l'or compcnsation al' darnagcs. l lowcver, Artide 2(i)(c) 01' this Act onlv applies to intentional acts 01' unfair cornpctition
Article () Restorntion of Reputation Hanned by Acts of Unfair Competition
The court may order a person who intentionally or negligently damages the business reputation 01' a person by an act of unfair competition to take the necessary measures to restore the business reputation of the owner in lieu al' or in addition to compensation I(Jr damages undcr Article 5. However, under Article 2(i) 01' this Acl, this provision applies only to an intentional act 01' unfair competition.
Article 7 Investigation of Unfair Competitive Acts etc.
( I) Where the Commissioner of the Korean Intellectual Property Office considers that confirming an act 01' unfair competition under Article 2(i)(a) to (g) of this Act or a violation of Article 3 of this Act is necessary, the Commissioner may order public officials to enter a business or manufacturing facilities to examine related documents, books, prod- ucts and so on, or to collect the least amount of products necessary for testing and inspect- ing them.
(2) Public officials who conduct an examination under paragraph (1) of this Article shall present a certificate indicating their competence to relevant persons.
Article 8 Corrective Recommendation to Violations
Where the Commissioner of the Korean Intellectual Property Office considers that an aet of unfair competition as defined under Article 2(i)(a) to (g) of this Aet or an aet that violates Article 3 of this Aet has been committed by a person, the Commissioner may issue a eorrective reeommendation to the person to eease the aet or to remove or destroy the mark used in the aet within a specifie period not exeeeding thirty days.
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Un1air Competition Prevention And Trade Secret Protection Act
Article 9 Hearings
Where the Commissionerof the Korean lntellectual Property Office considers that issuing acorrective recommendation .provided under Article Bvof this Act .is .necessary, the Commissioner shall hear the position of the party concemed, interested persons or wit- nesses in accordance with the procedure prescribed by Presidential Decree.
CHAPTER m PROfECTION OF TRADE SECRETS
Article lO Injunction against Infringement of Trade Secrets etc.
(1) A person who possesses trade secrets may seek a court prohibition or preventive order against a person who infringes or is likely to infringe trade secrets, if the business interest of the person who possesses the trade secrets is damaged or is likely to be damaged by the infringement.
(2) lf a person who possesses trade secrets files a claim under paragraph (1) of this Article, the person may request the destruction of goods used in the infringement, the removal of facilities used in the infringement or any other measures necessary to prohibit or prevent the infringement.
Article 11 Liability for Damages for Infringement of Trade Secrets
A person who damages a person who possesses trade secrets through an intentional or negligent infringement of trade secrets is liable for compensation for the damages.
Anìcle 12 Restoration of Reputation of the Person Possessing Trade Secrets
For a person who damages the business reputation of a person possessing trade secrets through an intentional or negligent infringement of trade secrets, the person possessing the trade secrets may request the court for necessary measures to restore the business reputa- tion in lieu of or in addition to compensation for damages under Article Il of this Act.
Article 13 Exception for Bona Fide Persons
(1) Articles lO and 12 of this Act do not apply to an act by a person who has properly acquired trade secrets through a transaction or uses or disclosesthe trade secrets within the scope of the rights the person has properly acquired through the transaction.
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Unfair Competition Prevention And Trade Secret Protection Act
(2) Thc phrase "a pcrson \\ ho has properly acquircd tradc sccrets" in paragraph (I) or this Artide mcans a pcrson who has acquircd trade sccrcts without thc knowledge unti without gross ncgligcncc that the trade secrets were improperly disclosed or that an act or improper acquisition or or irnproper disclosure or thc trade sccrcts occurred WhL'Il acquired under Article 2(iii)(c) or (I) or this Act.
Articl l' 14 Stature of Limitations
Whcn an infringcmcnt or trade sccrets continucs, thc right to rcqucst thc prohibition or prcvcntion or thc infringement or trade secrets undcr Article I O( I) or this Act expires unless the right is cxercised within three years 01' the date 01' actual knowledge that thc husiness interest or thc person possessing the trade secrets was damagcd or threatened to be damaged by an infringing person and 01' the actual knowledgc of the infringing person's identity. The same applies il' tcn years have elapsed after the date on which the act 01' infringement first occurred.
CHAPTER IV SUPPLEMENTARY PROVISIONS
Article 14his Presumption etc. on the Amount of Damages
( l) Where a person whose business interests have been infringed by an act of unfair competition or infringement of trade secrets claims compensation for damages under Article 5 or Article Il of this Act, damages may be calculated as the transferred amount multiplied by the presumed profit per unit that the person whose business interests have been infringed might have obtained in the absence of infringement during the period in which the infringer transferred the infringing product. However, the compensation rnay not exceed an amount calculated as follows: the estimated profit per unit multiplied by the number of articles that the trademark right owner or licensee could have produced subtracted by the number of units actually sold. If a person whose business interests have been infringed was unable to sell the product for reasons other than unfair competi- tion or trade secret infringement, a sum calculated according to the number of articles subject to the reasons must be deducted.
(2) Where a person whose business interests have been infiinged by an aet of unfair competi- tion or infringement of trade secrets c1aims compensation for damages under Articles 5 or 11 of this Acl, the profits gained by the infringer through the infringement are presumed to be the amount of damages suffered by the person whose business interests were infringed.
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Unfair Competition Prevention And Trade Secret Protection Act
(3) Where aperson whosebusiness interests have been infringed by an act of unfair competition.or.Jnfringement.of...tI:ade_sectets.claims...compensation.ioLdam.ag.e.s-ll1lder Artiele 5 or Article Il of this Act, the person may claim as damages the amount of money that the person would normally be entitled to receive for using a mark applied to goods if the mark was the object of an act of unfair competition, or for using trade secrets that were the object of an act of unfair competition, or for using trade secrets that were the object of the infringement.
(4) Where the amount of actual damages caused by an act of unfair competition or infringement of trade secrets exceeds the amount referred to in paragraph (3) of this Artiele, the excess amount may also be clairned as compensation for damages. When awarding damages, the court may consider whether the person who caused the infringement was willful or grossly negligent.
(5) Notwithstanding paragraphs (1) to (4) of this Artiele, in litigation related to an act of unfair competition or infringement of trade secrets where the court, owing to the nature of the case, recognizes the difficulty of proving the amount of damage that has occurred, the court may determine a reasonable amount after examining the evidence and reviewing all the arguments.
Article 14ter Submission of Materials
In litigation related to the infringement of business interests through an act of unfair competition or infringement of trade secrets, the court may, upon the request of either party, order the other party to submit materials necessary for the assessment of damages caused by the infringement, unless the person possessing the materials has a justifiable reason for refusing to submit them
Article 15 Relationship with Other Acts
(l) If any provision of Articles 2 to 6 and 18(3) of this Act is inconsistent with the Patent Act, the Utility Model Act, the IndustriaI Design Protection Act or the Trademark Act, this Act does not apply.
(2) If any provision of Articles 2(i)(d) to (f), 3 to 6 and 18(3) of this Act is inconsistent with the Monopoly Regulation and Fair Trade Act, the Fair Trade and Advertising Act or the Criminal Act related to national f1ags and national emblems, this Act does not apply.
Article 16 Deleted
Article 17 Delegation of Authority
The authority of the Commissioner of the Korean Intellectual Property Office provided
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Unfair Competition Prevention And Trade Secret Protection Act
under this Act may be partly delegated to thc mayor or thc city or Scoul, mayors of the mctropol itan citics or the governors or the provinccs as prcscrihcd by Presidential Decrec.
Article l H Penai Provision
( I) Any pcrson who lise thc trade secret uscful to a cornpany in a Iorcign country or disclose the tradc sccret to a third party knowing it will be uscd in the Iorcign country l'or the purpose or obtaining improper benefits or darnaging thc cornpany is liable to imprisonment with labor not exceeding sevcn years or to a fine cxcecding twice of pecu- niary profit to not exceeding ten times or il.
(2) Any person who acquire or use the trade sccret useful to a cornpany or disclose the trade secret to a third party for the purpose of ohtaining improper benefits or damaging the company is liahle to imprisonment with labor not exceeding five years or to a fine exceeding twice or pecuniary profit to not exceeding ten times of il.
(3) A person falling under either of the following subparagraphs is liable to imprisonment with lahor not exceeding three years or to a fine not exceeding 30 million won: (i) a person who engages in an act of unfair competition under Article 2(i) (excluding (h) and (i)) of this Act; (ii) a person who, in violation of Article 3 of this Act, uses as a trademark a symbol that is identical or similar to the insignia or indication of the following:
(a) the national flag, national emblem or other insignia of any contracting state to the Paris Convention or a member of the World Trade Organization. (b) an indication of an International Organization; (c) an indication of inspection or certification of any contracting state to the Paris Convention, a member of the World Trade Organization or an indication of inspection or certification to Trademark Law Treaty.
(4) The imprisonment and fine referred to in paragraphs (1) and (2) of this Article may be imposed concurrently.
(5) Deleted
Article 18bis Attempted Crime
Any person who attempts to commit a crime under Article 18(l) and (2) of this Act may be punished.
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UnfairCompetitionPrevention And Trade Secret Protection Act
Article 18ter eliminai Intent and Conspiracy
(I) A person who intends or conspires to commit a crime under Artiele 18(I) is Iiable to imprisonrnent with labor not exceeding three years or a fine not exceeding 20 million won.
(2) A person who intends or conspires to commit a crime under Artiele 18(2) of this Act is liable to imprisonment with labor not exceeding two years or a fine not exceeding IO million won
Article 19 Dual Liability
Where a representative of a legai person or an agent, employee or any other employees of a legai or natural person violates Artiele 18(1) to (3) ofthis Act conceming the business of the legai or natural person, the penalty for fines under the relevant subparagraphs .of Artiele 18(3) of this Act must be imposed on the legai or naturalperson in addition to the violator.
Article 20 Administrative Fine
(1) A person who refuses, interferes with or evades investigation on the collection of products by a public official concemed under Article 7(1) of this Act is liable to an administrative fine not exceeding 20 million won.
(2) The Commissioner of the Korean Intellectual Property Officeshall impose and collect the administrative fine referred to in paragraph (I) of this Artiele as prescribed by Presidential Decree.
(3) A person who objects to the imposition of an adrninistrative fine under paragraph (2) of this Artiele may lodge a protest with the Commissioner of the Korean Intellectual Property Office within thirty days of being notified of the imposition.
(4) Upon receipt of a protest under paragraph (3) of this Article, the Commissioner of the Korean Intellectual Property Office shall immediately notify the competent court, which shall adjudicate the case of the administrative fine according to the Noncontentious Case Litigation Procedure Act.
(5) Where no objection has been raised within the period prescribed in paragraph (3) of this Article and where the fine has not been paid, the Commissioner of the Korean Intellectual Property Officeshall collect the fine in accordance with the rules of collecting national taxes in arrears through the head of the competent tax office.
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Unfair Competition Prevention And Trade Secret Protection Acl
AHDENnUM <No. lH97, Dcccmbcr 11, 19H6·
This Acl cnters imo torce on January I, 19H7.
AnnENnlJM <No. 447H, Decernber 11. 1991>
Article l nate of Entry into Force
This Acl cntcrs into force within a year or its promulgation on a date determined by
Prcsidential Decree. (Presidential Decree No. 13781, which was signed on December 14, 1992, cnters into force on December 15, 1992.)
Article 2 Transitional Measures on the Infringernent of Trade Secrets before the
Enforcernent DI' this Acl Amended Articles lOto 12 and 18( 1)(iii) al' this Act do not apply to infringements 01' trade secrets before this Act enters into force. The same applies when a person who acquired or used a trade secret before this Act entered into force
uses the trade secret after this Act enters into force.
ADDENDUM (Arnendrnent or the Architecture Act and Other Acts Following the Change or the Names or the Govemment Ministries)
<No. 5454, December 13, 1997>
This Act enters into force on January I, 1998. (Proviso deleted.)
ADDENDUM <No. 5621, December 31, 1998>
Article 1 Date or Entry into Force
This Act enters into force on January l, 1999.
Article 2 Transitional Measures on PenaI Provisions
The previous provisions govern the application of penai provisions to acts that infringe
trade secrets before this Act enters into force.
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Unfair Competition Prevention And Trade Secret Protection Act
Article 3 Transitional Measures on Extinctive Prescription
Notwithstanding amended Article 14 of this Act, the previous provisions apply to the extinctive prescription of the right to discontinue or refrain an act of trade secret infringe- ment before this Act enters into force.
ADDENDUM (Fair Labeling and Advertising Act) <No. 5814, February 5, 1999>
Article 1 Date of Entry into Force
This Act enters into force on July 1, 1999.
AJ1icles 2 and 3 Deleted
Article 4 Amendrnent of Other Acts
(1) Deleted.
(2) The following provision under the Unfair Competition Prevention and Trade Secret Protection Act is amended as follows: In Article 15, "the Monopoly Regulation and Fair Trade Act" reads "the Monopoly Regulation and Fair Trade Act and Fair Labeling and Advertising Act".
Article 5 Deleted
ADDENDUM <No. 6421, February 3, 2001>
Article 1 Date of Entry into Force
This Act enters into force on July 1, 2001.
Article 2 Exception on Penai Provision
Notwithstanding Article 18(3) of this Act, a person who engages in an act of unfair competition under Article 2(1)(iii) and (vii) of this Act is only liable to the punishment under Article l 8(3) of this Act on or after December 3 l, 2001.
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Unfair Competition Prevention And Trade Secret Protection Act
ADI>F:NDUM <No. 7095, ./anuary 20, 2004>
Artide 1 Date or Entry into Force
This Acl cntcrs imo force xix months alter the date or promulgation.
Artide 2 Transitional Mcasures
Any person who violates Articlc 18( I) and (2) or this Act bclorc thc rcvisron of this
Acl cntcrs into force is subject to the prcvious provisions.
ADDF:NDlJM (Design Protection Act) <No. 7289, Dccernbcr J I, 2004>
Article 1 Date or Enti)' into Force
This Act cnters into force six months after the date of promulgation.
Articles 2 to 4 Delcted
Artide 5 Arnendrnent or Other Acts
( I) to (7) Deleted.
(8) The following provisions of the Unfair Competition Prevention and Trade Secret
Protection Act are amended as follows.
In Article 15( 1), "the Design [uij iang] Act" reads "the Design [dizain] Protection Act".
(9) to (17) Deleted.
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