SOUTH KOREA Law and Practice Contributed by: Hwansung Park, Eunwoo (Vera) Lee, Hankil D. Kang and Jung Heo, Lee & Ko
owner maintains the right to claim both injunctive relief and damages, judicial precedent limits the duration of the right to injunctive relief. Courts generally hold that this right may only be exercised for the amount of time it would take for a competitor to acquire the information through legitimate means, such as inde- pendent development or reverse engineering. Once this period lapses, the owner is restricted to seeking only monetary damages. Furthermore, although a trade secret may be pro- tected from unauthorised disclosure, it loses its “non- public” status if it becomes generally accessible to the public, regardless of whether the initial leakage was accidental. However, the non-public status is not lost if the information is disclosed only to a limited group of individuals who are under a contractual or legal Owners of trade secrets possess the right to seek injunctive relief and compensatory damages against infringers. Recognising the inherent difficulty in prov- ing the exact extent of financial loss, UCPA incorpo- rates specific provisions to estimate damages, such as deeming the infringer’s profits as the owner’s loss or calculating based on reasonable royalty rates. Fur- thermore, in cases of intentional infringement, the Act allows for punitive damages of up to five times the actual proven loss, serving as a strong deterrent against wilful misappropriation. UCPA also includes provisions for criminal penal- ties regarding the infringement of trade secrets. For domestic misappropriation, infringers face up to ten years in prison or fines of up to KRW500 million. If the secret is leaked abroad, the penalties escalate sig- nificantly to up to 15 years in prison or fines of up to KRW1.5 billion. These enhanced penalties, alongside quintuple (5x) punitive damages in civil cases, reflect the state’s commitment to deterring industrial espio- nage and protecting national economic security. Confidentiality Protection during Litigation In civil litigation involving trade secrets, parties may apply for a protective order to prevent the disclosure of confidential information, with violations subject to obligation to maintain its confidentiality. 5.5 Enforcement and Remedies Remedies
criminal penalties. However, the law stipulates that such protective orders cannot be issued regarding trade secrets that the alleged infringer has already obtained or possesses prior to the order. In practice, this creates a significant conflict between the need to specifically identify and describe the trade secrets for the purpose of litigation and the simultaneous require- ment to maintain their confidentiality. 6. Know-How 6.1 Definition and Legal Basis of Know-How There is no legislation in South Korea that indepen- dently defines or governs know-how. However, the Supreme Court has defined know-how as “secret technical knowledge, experience, or a collection thereof, which is necessary for the actual application and combination of various technologies that are use- ful for industrial purposes” (Supreme Court 93Nu364 Decision on 27 July 1993). In practice, know-how is generally regarded as protected under the broader concept of “trade secrets” as defined in UCPA. 6.2 Protectability Requirements and Scope Types of Information In Korea, it is generally understood that “know-how” refers to technical information such as technical pro- cesses, manufacturing methods, and algorithms. However, legal scholars argue that business-related information, such as customer lists, should also be included within the scope of know-how. Requirements for Protection The protection of know-how in South Korea remains legally ambiguous due to the absence of specific stat- utes or definitive case law. Legal scholars generally view that for know-how to be protected, it must be useful for business operations, possess economic value, and, crucially, remain non-public. 6.3 Ownership, Creation and Employee Know-How As noted above, know-how is not protected under a separate Korean statute, so ownership during employment is not easy to determine. Related trade secret principles are the best reference point. In Korea, trade secrets are typically technical informa-
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