CONTENTS
- 1. Unfair Competition Prevention and Trade Secret Protection Act | Requirements for a Trade Secret
- - Non-Public Availability
- - Economic Usefulness
- - Confidentiality Management
- 2. Unfair Competition Prevention and Trade Secret Protection Act | Types of Trade Secrets
- 3. Unfair Competition Prevention and Trade Secret Protection Act | Punishment Standards
- - Level of Punishment
- - Sentencing Criteria
- 4. Trade Secret Protection Act | If You Are a Suspect?
- - Establishing the Facts
- - Preparing the Defense
- - Settlement With the Victim
- 5. Trade Secret Protection Act | If You Are a Victim?
- - Criminal Complaint
- - Civil Procedure
- 6. Trade Secret Protection Act | If It Is Difficult to Respond on Your Own?
1. Unfair Competition Prevention and Trade Secret Protection Act | Requirements for a Trade Secret
A trade secret under the Unfair Competition Prevention and Trade Secret Protection Act means information that is not publicly known, has economic value, and is managed as a secret.
For information to constitute a trade secret, it must satisfy all of the requirements of non-public availability, economic usefulness, and secret management.
Non-Public Availability
Non-public availability means a state in which the information is not publicly known.
This refers to a case in which the information is not published in disclosed publications or the like, is kept secret, and cannot be obtained by an ordinary person except through the person who holds it.
However, providing the information to a person who bears a duty of confidentiality does not impair the requirement of non-public availability.
Economic Usefulness
Economic usefulness means that the information must have technical or managerial value.
This is recognized when a competitive advantage can be gained through the information, or when considerable cost or effort is required to acquire or develop it.
Confidentiality Management
Confidentiality management means that the information must be maintained and managed as a secret.
To this end, the information must be in a state where it is objectively recognizable as being managed as a secret, through measures such as marking or giving notice that the information is confidential, restricting who may access it and the methods of access, and imposing confidentiality obligations.
2. Unfair Competition Prevention and Trade Secret Protection Act | Types of Trade Secrets
A trade secret is an important element that must be protected, as it can be regarded as a driving force capable of growing a company's competitiveness.
Trade secrets include the following types.
▶ Types of Trade Secrets
2. A company's proprietary management practices managed as secrets
3. Technical information such as design drawings of products and facilities and product production methods
4. Management information such as customer lists, key plans, and administrative information
Where such trade secrets are divulged internally, or leaked by departed employees, a legal dispute may arise.
To prevent this, various preventive measures are taken in advance, such as preparing nondisclosure agreements or setting a period during which reemployment in the same industry is prohibited.
If a company files a complaint for a violation of the Unfair Competition Prevention and Trade Secret Protection Act and you become subject to an investigation by an investigative agency, you may be subject to criminal punishment.
3. Unfair Competition Prevention and Trade Secret Protection Act | Punishment Standards
If a complaint is filed for a violation of the Unfair Competition Prevention and Trade Secret Protection Act, the offender is punished under the Unfair Competition Prevention and Trade Secret Protection Act.
The 2024 amendment to the Unfair Competition Prevention and Trade Secret Protection Act strengthened criminal punishment by extending the statute of limitations for prosecution of a corporation to 10 years, and raising the upper limit of the fine by up to three times.
In addition, civil liability was also strengthened, so that in the case of a willful infringement, punitive damages of up to five times the amount of the loss are now possible.
For trade secret infringement to be established, the following requirements must be satisfied.
▶ Requirements for Establishment
2. Removing a trade secret outside a designated location without authorization
3. Acquiring a trade secret by theft, deception, threat, or other improper means
4. Continuing to retain a trade secret after being requested by the trade secret holder to delete it
Level of Punishment
Article 18 of the Unfair Competition Prevention and Trade Secret Protection Act | A person shall be punished by imprisonment with labor for not more than 10 years or by a fine not exceeding 500 million won.
※ Where a fine is imposed, if the amount equivalent to 10 times the property gain resulting from the violation exceeds 500 million won, a fine of not less than 2 times and not more than 10 times the gain shall be imposed. |
Sentencing Criteria
▶ Where there are circumstances particularly warranting consideration in the participation in or motive for the offense
▶ Where the trade secret was not disclosed externally and was recovered
▶ Where the offense was committed with willful negligence
▶ Diminished mental capacity
▶ Voluntary surrender, whistleblowing, or complete and voluntary disclosure of the full scope of an organized offense
▶ The victim's wish not to punish or recovery of the harm
▶ Passive participation
▶ Where the management of the trade secret was neglected
▶ Sincere reflection
▶ No prior criminal punishment
4. Trade Secret Protection Act | If You Are a Suspect?
When a person becomes a suspect on charges of violating the Unfair Competition Prevention and Trade Secret Protection Act, the statutory penalties are very heavy, and a civil claim for damages may also be filed by the company.
If an investigation is forthcoming, it is important to first carefully examine whether one's own conduct constitutes the trade secret infringement defined by law.
Establishing the Facts
You must accurately determine whether your conduct constitutes trade secret infringement and, if it does, to what degree.
It is important to gather relevant materials, secure evidence, and establish a response strategy.
Points to Note When Responding on Your Own
- Thoroughly secure evidence such as emails, messenger conversations, and work documents that can demonstrate your innocence
- Cooperate faithfully with the investigation and trial proceedings, and do not respond emotionally
- If necessary, promptly consult a legal expert
Preparing the Defense
During the trial, you should argue that your conduct does not constitute trade secret infringement, or that the degree of infringement is minor.
Points to Note When Responding on Your Own
- Prepare reasoning and materials that can support a denial of the infringement or its minor nature
- Become sufficiently familiar with the legal knowledge needed in preparing the defense
- Actively cooperate with the procedures required by the investigative authorities or the court
Settlement With the Victim
Through a settlement with the victim, civil liability can be resolved, and the level of criminal punishment can be reduced.
Points to Note When Responding on Your Own
- Put the settlement terms in writing to guard against later legal disputes
- Carefully keep the related evidence and documents even after the settlement
5. Trade Secret Protection Act | If You Are a Victim?
If you are a victim who has suffered harm from a violation of the Unfair Competition Prevention and Trade Secret Protection Act, a prompt and systematic response is most important.
You can demand severe punishment through a criminal complaint, and you can be compensated for the harm through a civil claim for damages.
In addition, where the infringing act continues or is likely to occur, you can request the court to prohibit and prevent it.
Criminal Complaint
For an act of trade secret infringement, you can file a criminal complaint with the investigative authorities and demand criminal punishment.
Points to Note When Responding on Your Own
- Secure all evidence related to the infringement, such as emails, messenger conversations, stored files, and CCTV footage
- In the complaint, specifically state the content of the infringement, the date and time of the infringement, who the infringer is, and the scale of the harm
- Participate faithfully in procedures such as the submission of evidence and witness examination during the trial
Civil Procedure
Where a business interest is infringed through intent or negligence and damage results, you can claim damages from the infringer.(Article 11 of the Unfair Competition Prevention and Trade Secret Protection Act)
In addition, where an infringing act has already occurred or there is a concern that it may occur, you can request the court to prohibit or prevent the act.(Article 10 of the Unfair Competition Prevention and Trade Secret Protection Act)
Points to Note When Responding on Your Own
- Secure evidence that can prove the scale of the damage, such as contracts, transaction records, and business records
- When drafting the claim for damages, describe the content of the harm specifically and clearly
- Prepare and submit the documents to be filed with the court accurately and within the deadline
6. Trade Secret Protection Act | If It Is Difficult to Respond on Your Own?
Drawing on data from a wide range of corporate criminal cases, this firm responds promptly and meticulously to the complex issues and varied situations of cases involving the Trade Secret Protection Act.
An emergency response system is operated, allowing for prompt handling of cases, and a task force of 1 to 20 criminal defense attorneys is formed to establish a strategy tailored to each matter before assisting the client.
If you are facing difficulties due to a case involving the Trade Secret Protection Act, please request assistance from this firm's criminal defense attorneys.
