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National Assembly Legislation

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  • Unfair Competition Prevention and Trade Secret Protection Act
    • Competent Ministry : Korean Intellectual Property Office
    • Advance Publication of Legislation : 2021-07-06
    • Opinion Submission Deadline : 2021-07-20
Reasons for Proposal

Reason for proposal

The current Act prescribes that, if legal interest equivalent to intellectual property right such as business secret is infringed by unfair competition action, etc., the person whose business profit is infringed by the corresponding action (hereinafter referred to as sufferer) may request for indemnification for damage caused by such infringement action and, in relation to this matter, the court may consider the business profit of the infringer (hereinafter referred to as infringer) as damage to the sufferer when calculating the damage.

For the calculation of damage, it is pointed out that the sufferer shall prove the profit of the infringer; since it is almost impossible for the sufferer to prove the damage with the acquisition of major information such as business secrets possessed by the infringer and to show it in the trial process, however, the system should be improved so that the burden of proof is adequately distributed.

Meanwhile, the damage calculation system against the infringement of patent right was improved with the amendment of the Patent Act in 2016, i.e., the court’s order of appraisal, liability of the party for explanation, expanded subjects and range for data submission order to the infringer, etc. The current Act handles similar areas but does not follow systematic changes; as a result, practical remedy of the damaged party is more difficult compared with the patent right infringement lawsuit in legal action.

Therefore, rapid and accurate calculation of damage is sought by assigning liability to the infringer to explain about the appraisal for the calculation of damage caused by infringement. Likewise, effective protection of the right of the sufferer is sought by improving the practical effect of data submission order with the expansion of subjects and range of data submission order of evidence possessed by the infringer and with the application of punishment in case of noncompliance with the court’s evidence submission order.

 

Main content

 

A. Proof of infringement action is included in the range of the court’s submission order in a business profit infringement lawsuit caused by unfair competition action or business secret infringement action (Article 14-3.1 of the draft).

B. A confidential review procedure system is adopted for preview by judges in order to determine the rationality of reason for noncompliance with the evidence submission order (Establishment of Article 14-3.2 of the draft).

C. Liability for submission of even business secrets is assigned if necessary for proof of damage or calculation of damage and, in case of noncompliance with the court’s evidence submission order, assertion by the other party is accepted as the truth in order to relieve the burden of proof of the design right owner, etc. (Establishment of Articles 14-3.3 through 14-3.5).

D. When the court orders appraisal to calculate the damage caused by unfair competition action or business secret infringement action, the party shall explain about the matters needed for the appraiser for the appraisal (Establishment of Article 14-8 of the draft).

Major Provisions

Articles 14-3 and 14-8 of the draft

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