UNFAIR COMPETITION PREVENTION AND
BUSINESS SECRET PROTECTION ACT
Act No. 6421, Feb. 3, 2001
CHAPTER I GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to maintain the sound order in transactions by preventing acts of unfair competition, such as unfair use of domestically widely famous trademark, trade name, etc., of another person, and any act infringing on another person's trade secret.
Article 2 (Definitions)
For the purpose of this Act, the definitions of terms shall be as follows:
1. The term "act of unfair competition" means any of the following acts, regardless of the purpose thereof:
(a) Act causing confusion with the goods of another person by using such thing that is identical with or similar to a name, trade name, trademark, container or package of goods of another person or other mark identifying the goods of another person which is widely recognized in Korea, or by selling, distributing, importing or exporting goods incorporating such thing;
(b) Act causing confusion with another person's business facilities or activities by using such thing that is identical with or similar to a name, trade name, or emblem of another person or other mark identifying another person's business which is widely recognized in Korea;
(c) Other than the acts of causing confusion under items (a) and (b), an act damaging the identity of mark or the fame of another person, by using such thing that is identical with or similar to a name, trade name, trademark, or container and package of goods of another person, or other mark indicating another person's goods or business, which is widely recognized in Korea, without any justifiable grounds as prescribed by the Presidential Decree such as non-commercial uses, or by selling, distributing, importing or exporting goods incorporating such thing;
(d) Act causing misunderstanding as to the place of origin by placing a false mark of the place of origin on goods or through advertisement thereof or by means informative to the public, on any commercial document or communication, or by selling, distributing, importing or exporting goods bearing such false mark;
(e) Act placing on goods or through advertisement thereof or by means informative to the public, on any commercial document or communication, a mark that causes misunderstanding that the goods were produced or processed in an area other than the area where the goods were produced, manufactured or processed, or act selling, distributing, importing or exporting goods bearing such mark;
(f) Act falsely claiming as another person's goods, act advertising or placing on goods a mark that causes misunderstanding as to the quality, contents, manufacturing method, use or quantity of the goods, or act selling, distributing, importing or exporting goods using such method or mark; and
(g) An act that any agent or representative of a holder of the right to a trademark registered with any party to the Paris Convention for the Protection of Industrial Property (hereinafter referred to as the "Paris Convention"), with any member state of the World Trade Organization, or with any signatory state of the Trademark Law Treaty, or to a trademark similar thereto, or any person who had been an agent or representative of such holder within one year before the date of conducting the act in question, uses the trademark, without any justifiable grounds, on the goods identical with or similar to the designated goods of the relevant trademark, or an act that such agent or representative sells, distributes, exports, or imports the goods using the relevant trademark;
2. The term "trade secret" means any technical or business operational information useful for any production and sale methods and other business activities, which is not known to the public, has an independent economic value, and has been maintained in secret by considerable effort;
3. The term "act infringing on trade secret" means any of the following acts:
(a) Act obtaining any trade secret by a theft, fraud, threat or other unfair means (hereinafter referred to as an "act of unfair acquisition"), or act using or disclosing to the public (including the act informing to any specific person while maintaining confidentiality; hereinafter the same shall apply) the trade secret so obtained;
(b) Act obtaining any trade secret with the knowledge that any act of unfair acquisition was involved, or without such knowledge by gross negligence, or act using or disclosing to the public trade secret so obtained;
(c) Act using or disclosing to the public any trade secret with the knowledge that any act of unfair acquisition was involved, or without such knowledge by gross negligence, after obtaining the trade secret;
(d) Act using or disclosing to the public a trade secret by a person obliged to keep such trade secret confidential under contractual or other duty, with the intent to obtain any unfair benefit or to inflict any loss on the owner of such trade secret;
(e) Act obtaining any trade secret with the knowledge that it is disclosed to the public in such manner as provided in item (d) above or that such disclosure act was involved, or without such knowledge by gross negligence, or act using or disclosing to the public the trade secret so obtained; and
(f) Act using any trade secret or disclosing it to the public with knowing the fact that it is disclosed to the public in such manner as provided in item (d) or the fact that such disclosing act was involved, or without knowing such fact by gross negligence, after obtaining the trade secret.
CHAPTER II PROHIBITION, ETC. OF ACTS OF UNFAIR COMPETITION
Article 3 (Prohibition of Use of National Flag, Emblem, etc.)
(1) Nothing identical with or similar to the national flag or emblem or other badges of a party to the Paris Convention, a member state of the World Trade Organization, or a signatory state of the Trademark Law Treaty, or a mark of any international organization, may be used as trademark: Provided, That this shall not apply in cases where such use is permitted by the state or international organization concerned.
(2) Nothing identical with or similar to any mark for a control or certification which is used by the government of a party to the Paris Convention, a member state of the World Trade Organization, or a signatory state of the Trademark Law Treaty, may be used as trademark: Provided, That this shall not apply in cases where such use is permitted by the government of the state concerned.
Article 4 (Claim for Prohibition of Act of Unfair Competition, Etc.)
(1) Any person who deems that his business profit is or might be infringed by any act of unfair competition, may file a claim before the court for its prohibition or prevention against a person committing or attempting to do it.
(2) The person as referred to in paragraph (1) may, in filing a claim as prescribed in paragraph (1), additionally make a claim for the destruction of any thing causing the act of unfair competition, removal of facilities offered for such act, or any measure required for its prohibition or prevention.
Article 5 (Liability for Damage Caused by Act of Unfair Competition)
Any person who infringes on another person's business profit and inflicts any damage on another such person by an act of unfair competition committed intentionally or negligently, shall be liable to compensate for said damage: Provided, That in case of subparagraph 1 (c) of Article 2, it shall be limited to the act of unfair competition committed on intent.
Article 6 (Restoration of Credit Lost by Act of Unfair Competition)
With respect to a person who intentionally or negligently causes damage to another person's business reputation by an act of unfair competition, the competent court may, upon request of another such person whose business profit is damaged by that act, give any order to take measures necessary for the restoration of the business reputation in addition to or in lieu of the compensation for said damage as prescribed in Article 5: Provided, That in any case as stated in subparagraph 1 (c) of Article 2, this shall be limited to the act of unfair competition by intention.
Article 7 (Investigation into Act of Unfair Competition, Etc.)
(1) Where the Commissioner of the Korean Industrial Property Office deems it necessary to confirm an act of unfair competition or a violation of the provisions of Article 3, he may have a relevant public official enter the business facilities or manufacturing facilities to investigate into the documents, books, or products concerned or collect and examine the minimum amount of products necessary for investigation.
(2) A public official who conducts investigation under paragraph (1) shall carry an identification proving his authority and show it to the person concerned.
Article 8 (Recommendation on Correction of Violations)
If the Commissioner of the Korean Industrial Property Office deems that there is an act of unfair competition as prescribed in subparagraph 1 of Article 2, or act contrary to the provisions of Article 3, he may make to the violator any recommendation necessary for correcting it, such as discontinuance of said act, removal or destruction of said mark and so forth, with a period not exceeding thirty days fixed.
Article 9 (Hearing of Opinion)
If it is deemed necessary for recommending the correction as prescribed in Article 8, the Commissioner of the Korean Industrial Property Office shall hear the opinion of the party concerned, interested person or reference person under the conditions as prescribed by the Presidential Decree.
CHAPTER III PROTECTION OF TRADE SECRET
Article 10 (Claim for Prohibition of Act Infringing on Trade Secret, Etc.)
(1) If any business profit is or might be infringed on by any act infringing on the trade secret, the person who holds said secret may file an claim before the court for prohibition or prevention of said act.
(2) The person holding the trade secret may, in filing a claim as referred to in paragraph (1), additionally claim the destruction of any thing causing the infringing act, removal of facilities offered for said act, or any measure required for its prohibition or prevention.
Article 11 (Liability for Damages Caused by Infringement on Trade Secret)
Any person who has inflicted any loss on a person holding a trade secret by infringing on any business profit through an act intentionally or negligently infringing on such trade secret, shall be liable to compensate such loss.
Article 12 (Restoration of Credit of Person Holding Trade Secret)
The court may, upon a request of a person holding a trade secret, order a person who has intentionally or negligently downgraded such business credit by any act infringing on said secret, to take any measure required for restoring such business credit, in addition to or in lieu of the compensation for damages as prescribed in Article 11.
Article 13 (Special Cases on Bona Fide Person)
(1) The provisions of Articles 10 through 12 shall not apply to any act that a person who has lawfully obtained a trade secret through a transaction, uses or discloses it to the public within the limit allowed owing to said transaction.
(2) For the purpose of paragraph (1), the term "person who has lawfully obtained a trade secret" means a person who has obtain such secret without knowing, by no gross negligence, the fact that the trade secret is unfairly disclosed, or the fact any unfair obtaining or disclosing act was involved, at the time it is obtained as prescribed in subparagraph 3 (c) or (f) of Article 2.
Article 14 (Prescription)
The right to file a claim for prohibition or prevention of an act infringing on any trade secret as prescribed in Article 10 (1), shall be extinguished by prescription, if it is not exercised for three years after the person holding said secret comes to know the fact that in case where an act infringing on said secret continues, his business profit is or might be infringed by such act, and the person who has committed such act. This provision shall also apply in case where ten years have passed after such infringing act began.
CHAPTER IV SUPPLEMENTARY PROVISIONS
Article 14-2 (Presumption of Damages)
(1) Where a person whose business profit is infringed by an act of unfair competition or a violation of trade secrets requests compensation for damage under Article 5 or 11, if the person who infringes the profit transfers the goods causing the act of unfair competition or the act of infringing on trade secrets, the amount obtained by multiplying the transferred quantity of the relevant goods by the profit amount per unit quantity of the goods, which the person whose business profit is infringed would be able to sell unless there is the act of unfair competition or the act of infringing on trade secrets, may be made as the damages of the person whose business profit is infringed. In this case, the damages shall be limited to the amount obtained by multiplying the quantity, calculated by deducting the volume of actual sales from the volume of possible production by the person whose business profit is infringed, by the profit amount per unit quantity: Provided, That in case where the person whose business profit is infringed faces the situation under which he is unable to sell due to other reasons than the act of unfair competition or the act of infringing on trade secrets, the amount conforming to the unsold quantity due to other reasons than the act of unfair competition or the act of infringing on trade secrets, shall be deducted.
(2) Where a person whose business profit is infringed by an act of unfair competition or a violation of trade secrets requests compensation for damage under Article 5 or 11, if the person who infringes the profit gets any gain by such offense, the amount of such gain shall be presumed to be the amount of damage sustained by the person whose business profit is infringed.
(3) Where a person whose business profit is infringed by an act of unfair competition or an act of infringing on trade secrets requests compensation for damages under Article 5 or 11, he may request compensation for damages by considering the amount equivalent to that which he may usually receive for the use of a mark, such as a trademark, put on the goods, etc. subjected to the act of unfair competition or for the use of the trade secrets infringed, as the amount of damage which he sustains.
(4)Where the amount of damage which is sustained by an act of unfair competition or an act of infringing on trade secrets exceeds the amount under paragraph (3), the request for damages may be made even to the excess. In this case, if the offense against the business profit is committed with no intent or gross negligence, a court may take this into account in calculating the amount of damage.
(5) In case where it is extremely difficult to establish the facts to prove the amount of damage in view of the nature of relevant facts, while it is recognized that the damage has been incurred, in the lawsuit for the act of unfair competition or the act of infringing on trade secrets, a court may recognize a resonable amount of damage on the basis of the entire tenor of oral proceedings and the results of evidence investigations, notwithstanding paragraphs (1) through (4).
Article 14-3 (Submission of Data)
In a lawsuit alleging the infringement of business profits by an act of unfair competition or a violation of trade secrets, a court may, upon the request of a party, order the other party to submit such data as may be necessary to calculate the amount of damages incurred by the offense: Provided, That the same shall not apply where the holder of the data has a good reason for the refusal of the submission thereof.
Article 15 (Relation to Other Acts)
(1) If there are any provisions of the Patent Act, the Utility Model Act, the Design Act, or the Trademark Act which are different from those of Articles 2 through 6 and 18 (3) of this Act, such provisions shall preferentially apply.
(2) If there are any provisions of the national flag or emblem of the Monopoly Regulation and Fair Trade Act, the Act on Fair Indication and Advertisement, or the Criminal Act which are different from those of subparagraph 1 (d) through (f) of Article 2 and Articles 3 through 6 and 18 (3) of this Act, such provisions shall preferentially apply.
Article 16 Deleted. <by Act No. 5621, Dec. 31, 1998>
Article 17 (Delegation of Authority)
The authority of the Commissioner of the Korea Industrial Property Office, which is prescribed by this Act, may be delegated partially to the Special Metropolitan City Mayor, Metropolitan City Mayors, or Do governors, under the conditions as prescribed by the Presidential Decree.
Article 18 (Penal Provisions)
(1) Any person who falls under any of the following subparagraphs shall be punished by imprisonment not exceeding seven years or by a fine not exceeding one hundred million won:
1. An officer or employee of an enterprise who, without any justifiable reason, discloses a trade secret on technology useful to the enterprise to a third party, with the knowledge that the trade secret is or will be used in a foreign country; and
2. An ex-officer or employee of an enterprise who, with intent to gain any unfair profit or to inflict any loss on the enterprise, discloses a trade secret on technology useful to the enterprise to a third party, with the knowledge that the trade secret is or will be used in a foreign country, in violation of confidentiality obligation under contract or any similar arrangement.
(2) Any person who falls under any of the following subparagraphs shall be punished by imprisonment not exceeding five years or by a fine not exceeding fifty million won:
1. An officer or employee of an enterprise who discloses any trade secrets on technology useful to the enterprise to a third party, without any justifiable reasons; and
2. An ex-officer or employee of an enterprise who discloses any trade secrets on technology useful to such enterprise to a third party, with intent to gain any unfair profit or to inflict any loss on the enterprise, in violation of confidentiality obligation under contract or any similar arrangement.
(3) Any person who falls under any of the following subparagraphs shall be punished by imprisonment not exceeding three years or by a fine not exceeding thirty million won:
1. A person who commits an act of unfair competition under subparagraph 1 of Article 2; and
2. A person who uses as trademark, in violation of the provisions of Article 3, any one identical with or similar to the badges or marks falling under any of the following items:
(a) The national flag, emblem or other badges of a party to the Paris Convention, a member state of the World Trade Organization, or a signatory state of the Trademark Law Treaty;
(b) The mark of an international organization; and
(c) The mark for a control or certification which is used by the government of a party to the Paris Convention, a member state of the World Trade Organization, or a signatory state of the Trademark Law Treaty.
(4) The punishment of imprisonment and fine under paragraphs (1) and (2) shall be concurrently imposed.
(5) A public action against the offense referred to in paragraphs (1) and (2) shall be instituted only on the aggrieved person's complaint: Provided, That the same shall not apply where it is deemed necessary for national security or material public interests.
Article 19 (Joint Penal Provisions)
If a representative of a juristic person, or an agent, servant or other employee of a juristic person or individual commits an offense falling under Article 18 (3) in connection with the affairs of such juristic person or individual, a fine as prescribed in the same paragraph of the same Article shall be imposed on such juristic person or individual, in addition to punishment of the offender.
Article 20 (Fine for Negligence)
(1) A person who refuses, interferes with, or evades the investigation or collection by the relevant public official under Article 7 (1) shall be punished by a fine for negligence not exceeding twenty million won.
(2) The fine for negligence referred to in paragraph (1) shall be imposed and collected by the Commissioner of the Korea Industrial Property Office under the conditions prescribed by the Presidential Decree.
(3) A person who is dissatisfied with the disposition of a fine for negligence referred to in paragraph (2) may raise an objection to the Commissioner of the Korean Industrial Property Office within thirty (30) days after receiving the notice of the disposition.
(4) Where a person who is subject to the disposition of a fine for negligence referred to in paragraph (2) makes an objection under paragraph (3), the Commissioner of the Korean Industrial Property Office shall forthwith notify the competent court, which shall, upon receiving the notification, bring the case of the fine for negligence to trial under the Non-Litigation Case Procedure Act.
(5) If no objection is made and no fine for negligence is paid within the period referred to in paragraph (3), the fine shall be collected according to the example of procedures for collecting national taxes in arrears.
ADDENDA <Act No. 6421, Feb. 3, 2001>
(1) (Enforcement Date)
This Act shall enter into force on July 1, 2001.
(2) (Special Cases concerning Application of Penal Provisions)
With respect to the persons who have committed an act of unfair competition under the amendments to subparagraph 1 (c) and (g) of Article 2, notwithstanding the provisions of Article 18 (3), the penal provisions under the same Article and paragraph shall not be applicable until December 31, 2001.
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