Amended Unfair Competition Prevention Act passes National Assembly, targeting new forms of trade secret theft
South Korea has established a legal basis for punishing a broader range of trade secret theft, from recruitment brokers who facilitate leaks to hackers who steal proprietary information.
The Korea Intellectual Property Office announced Friday that an amendment to the Unfair Competition Prevention and Trade Secret Protection Act had passed the National Assembly. The revised law allows authorities to sanction those who introduce, broker or solicit trade secret infringement, explicitly designates hacking as a prohibited method of obtaining trade secrets, and enables prosecution of anyone who uses or discloses trade secrets acquired through illicit means.
The first change targets job-placement schemes tied to trade secret leaks. In technology theft cases, companies' key personnel are frequently recruited away to competitors, and brokers posing as headhunters have been known to play an active role in facilitating those leaks.
Until now, however, no direct legal basis existed to sanction such brokering activity. Applying criminal incitement or aiding-and-abetting charges was also difficult, leaving prosecutors to pursue offenders only under the Employment Security Act for operating an unlicensed placement service — a charge unrelated to the trade secret leak itself.
The amendment classifies the introduction, brokering and solicitation of trade secret infringement as a distinct category of violation. Brokers who arrange job moves premised on leaking trade secrets can now face civil remedies — including injunctions and damages — as well as whistleblower reward provisions and criminal penalties.
The second change clarifies the legal basis for sanctioning trade secret theft carried out through hacking. Current law centers on traditional methods of misappropriation such as theft, fraud and coercion, and critics had long argued that cyber attacks needed to be addressed more explicitly.
The amendment names hacking as a prohibited method of obtaining trade secrets, making it unambiguous in statute that acquiring another party's trade secrets through a cyber attack constitutes an infringement and is subject to criminal punishment.
The third change removes a burden of proof that had shielded those who misused illicitly obtained secrets. Previously, even when someone had acquired a trade secret through improper means and then used or disclosed it, prosecutors still had to separately prove that the person acted with intent to gain an unfair advantage or cause harm to the trade secret holder. Under the amendment, using or disclosing a trade secret obtained through improper means is punishable without that additional showing of illicit purpose.
"Trade secret infringement is becoming increasingly sophisticated — through the organized brokering of key personnel transfers and the theft of information via hacking, followed by its use and distribution," said Kim Yong-seon, commissioner of the Korea Intellectual Property Office. "We expect this amendment to allow us to regulate the entire chain of technology theft crimes more thoroughly, from the preparatory stage through acquisition, use and disclosure."
kwonhl@heraldcorp.com
