Criminal penalties to be introduced for selling 'dead copy' products

South Korea

An important amendment to the Unfair Competition Prevention and Trade Secret Protection Act, which will take effect on July 18 2017, was recently published. Under the new amendment, infringers which violate the ‘dead copy’ provision of the act may be subject to imprisonment for up to three years or a fine of up to KRW30 million (approximately $24,000). In addition, the amendment permits the Korean Intellectual Property Office or local government offices to investigate potential dead copy violation cases on their own initiative, even in the absence of a complaint from a competitor.

Under the dead copy provision of the act, the act of selling, leasing, displaying for sale or lease or importing or exporting a product which imitates the appearance of another party's product (ie, the shape, pattern, colour or combination of such attributes) is prohibited as an unfair competitive act, provided that:

  • the imitation product is sold, leased, displayed for sale or lease or imported or exported within three years of the date when the original product was first created; and
  • the appearance of the imitation product is not common to products of the same type.

This provision came into effect on July 21 2004, and since then has played an important role in protecting unregistered designs in Korea, as there is no requirement that the original product design be famous or the product design be a source identifier (unlike other Unfair Competition Prevention and Trade Secret Protection Act or trademark causes of action). To date, many court decisions effectively put a stop to the manufacture and sale of dead copies in the context of product packaging, textiles, bedding, fashion products (eg, footwear, clothing and sunglasses), electronic devices (eg, fans) and other consumer goods. However, the provision previously allowed for only civil remedies, which have not been a sufficient deterrent in some cases, and also require a party to engage in costly civil litigation to enforce its rights.

By introducing criminal penalties for violation of the dead copy provision, this amendment will make it less arduous and less expensive, particularly for earlier market entrants to enforce their rights against knock-offs of their products.

Sung-Nam Kim and Angela Kim, Kim & Chang, Seoul

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