The Unfair Competition Prevention and Trade Secret Protection Act ("UCPA") was amended on April 17, 2018, and takes effect from July 18, 2018 ("Amendment" or "Amended UCPA"). The Amendment explicitly targets the protection of trade dress and ideas, thereby further strengthening the protection of intellectual property rights in these areas.
1. Strengthened Protection of Trade Dress
Until the Amendment, the UCPA had no provisions explicitly protecting business interiors and exteriors (also known as "trade dress"), including, for example, business methods, signs and sign posts. As such, interiors and exteriors of certain business owners - in particular, small and medium sized businesses - that had become widely known to ordinary consumers as a result of significant time and investment, were not protected from misappropriation by other businesses. This resulted in substantial damages to the original owners of the trade dress, and Korean courts seeking to provide trade dress protection had to resort to the catch-all provision of UCPA Art. 2(1)(j) (now Art. 2(1)(k) in the Amended UCPA), which protects outcomes achieved through substantial investment or effort.
The Amended UCPA now explicitly provides for trade dress protection in two ways: first, the scope of protected business marks under UCPA Art. 2(1)(b) has been broadened to include "methods of providing goods and services or overall business exteriors, including, but not limited to, signs, exteriors, and interiors", thereby making it clear that trade dress is protected as a business mark under the Amended UCPA; and, second, the anti-dilution provisions of UCPA Art. 2(1)(c) now expressly include "marks indicating a person's business, including, without limitation, methods of providing goods and services or overall business exteriors, including, but not limited to, signs, exteriors, and interiors", thereby expressly protecting trade dress from acts that may dilute the distinctiveness of certain businesses.
2. New Statutory Provision regarding Misappropriation of Creative Ideas
Since the adoption of the catch-all provision of Art. 2(1)(j) of the UCPA, in 2013, there has been ongoing discussion among legal scholars and jurists about providing protection for creative ideas; Korean courts rendered decisions holding that creative ideas may be protected under the catch-all provision in certain circumstances, on the basis that such ideas are the outcome of significant time and investment. In practice, however, it was still difficult to protect creative ideas unless such ideas were registered as patents or relevant parties had entered into agreements governing the use of the ideas-at-issue, due to the lack of an explicit statutory provision to provide such protection.
Legal circles thus strongly criticized the lack of effective remedies against the misappropriation of creative ideas; it was argued that these ideas possessed economic value warranting protection, and such value could be proven through deal negotiations, biddings and other contests, even if the ideas may not yet have materialized into thriving businesses.
The Amendment now addresses these criticisms through an amended Art. 2(1)(j). Specifically, the amended Art. 2(1)(j) states that "misappropriation by a party for its own, or a third party's, use and business interest, of another party's commercial or technical ideas that possess economic value - which may be evidenced through deal negotiations and processes, e.g., such as business proposals, biddings, and contests - in breach of the original purpose for the disclosure of those ideas" shall be deemed an unfair trade practice. Liability for such alleged misappropriation is avoided, however, if one can prove that the ideas were already known by the receiving party prior to the disclosure, or widely known in the relevant industry.
Further, the Amended UCPA authorizes the Commissioner of the Korean Intellectual Property Office ("KIPO") to investigate or impose corrective orders against such misappropriation (Articles 7 and 8 of the Amended UCPA). However, the Amended UPCA has no provision for criminal liability for misappropriation.
Once the Amendment takes effect, creative ideas possessing an economic value will be protected from misappropriation even without an express agreement between the relevant parties. As a result, any misappropriation of another's creative ideas will be actively and legally enforced and corporate disputes regarding misappropriation are likely to substantially increase.
※ Lee & Ko's IP Practice Group has significant experience and expertise in IP cases and disputes involving unfair trade practices and trade secret misappropriation, as well as representing and defending corporate IP rights, seeking remedies against infringement, and responding to infringement claims. Lee & Ko is uniquely positioned to provide client-centered advice and services for such legal issues and disputes.
Un Ho Kim
Vera Eun Woo Lee