Amendments to Unfair Competition Law recognise new types of anti-competitive acts

South Korea

In Korea, the Unfair Competition Prevention and Trade Secret Protection Act may be used to protect IP rights by preventing unfair methods of competition and the misappropriation of trade secrets. Recent amendments to the act have identified additional types of anti-competitive acts and introduced rewards for those who inform the authorities of such anti-competitive behaviour, among other things. The amendments were promulgated on July 30 2013 and will become effective on January 31 2014.  

First, the amendments will introduce a general ‘catch-all’ provision. Article 2(1) of the act defines the types of activities that are considered to be “acts of unfair competition”. Currently, the act lists nine specific activities that may give rise to an unfair competition claim. As a result, other unlawful activities that may be considered as acts of unfair competition, but do not fall within Article 2(1), remain unregulated under the act, despite their negative impact on fair business practices.

The recent amendments have added Article 2(1)(x), which prevents:

the act of infringing a person’s right to profit from that person’s product, which was the result of considerable effort and investment, without authorisation, through a method that contravenes fair commercial trade practice or the competitive order.”

The aim of this provision is to provide parties with appropriate means to prevent third parties from engaging in new types of unfair competition. All the civil remedies that are usually available under the act, including injunctive relief and damages, are available for this new claim, but it is not possible to bring a criminal action.

Second, monetary incentives will be introduced to encourage the report of anti-competitive acts. The commissioner of the Korean Intellectual Property Office may offer a reward for reporting a party that is causing confusion by using a sign that is identical or similar to another person’s name, trade name, trademark, container or packaging, or any other sign widely known in Korea as a source identifier. This monetary incentive applies only to cases involving registered trademarks.

The new amendments thus recognise the new types of unfair competition that are becoming more prevalent in the marketplace due to the advancement of technology. They also acknowledge that monetary incentives may be needed, in addition to traditional legal remedies, to prevent unfair competition effectively.

Nayoung Kim and Min Kyoung Jee, Kim & Chang, Seoul

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