As of August 21, 2024, the recent amendment to the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter referred to as the "UCPA") has taken effect, granting the Commissioner of the Korean Intellectual Property Office (KIPO) the authority to directly issue corrective orders against violators. 

Under amended Article 8 of the UCPA, the Commissioner is empowered to directly address issues such as the misappropriation of ideas in technology transactions (including business proposals, bidding, contest entries, etc.) and unfair competition acts such as an unauthorized use of a celebrity's name or likeness, which infringes on the right of publicity. The Commissioner may set a period of up to 30 days for the violator to cease the violation, remove or modify the mark, take preventive measures against recurrence, or implement other necessary corrective actions. In addition, the Commissioner may publicly announce the details of the violation and the fact that the violator does not comply with the corrective recommendation or corrective order.

Previously, the KIPO could conduct administrative investigations into acts of unfair competition and issue recommendations for correction if a violation was identified. However, these recommendations were merely advisory and lacked enforceability.

Under the amended UCPA, the KIPO now has the authority to issue both corrective orders and corrective recommendations following an administrative investigation. The KIPO Commissioner may initiate such an investigation into potential acts of unfair competition or legal violations based on a submitted report. Anyone who becomes aware of facts relating to acts of unfair competition under Article 2(i) (except for subclauses (h) and (m) thereof) of the UCPA or violations under Articles 3, 3bis(1) and (2) may report these facts to the Commissioner of the KIPO. If it is necessary to verify an act of unfair competition or legal violation, and verification through other means is difficult, the Commissioner of the KIPO may authorize relevant public officials (hereinafter referred to as “investigators”) to enter business or manufacturing premises to examine relevant materials or products or collect a sample amount of products required for examination. Prior to conducting such an on-site investigation, the Commissioner is required to send the person subjected to investigation a document detailing the purpose, location, duration and scope of the investigation, the name and position of the investigator, required materials, penalties for refusal of investigation, and other pertinent information. In the event of refusal, the KIPO may impose an administrative fine of up to 20 million KRW under amended Article 20 of the UCPA. During the investigation process, the investigators may request the submission of materials, the attendance of individuals, seek expert advice, or hear statements, in accordance with the relevant regulations under the Enforcement Decree of the UCPA. If expert advice is needed, investigators may convene an advisory panel composed of professionals in relevant fields, such as experts, lawyers, patent attorneys, professors, or KIPO examiners and trial judges, to seek their opinions.

According to the draft guidelines for direct corrective orders, if the investigators conclude that acts of unfair competition or legal violations have occurred, the Commissioner of the KIPO may take the following: 

(i) orders or recommendations for action, such as the removal or modification of marks, or procedural corrections (e.g., requiring the party to cure procedural defects such as a lack of consent); 

(ii) orders or recommendations for inaction, such as ceasing ongoing violations, or prohibiting future violations; and 

(iii) supplementary orders or recommendations, which may include requiring the party to submit periodic reports on their implementation, appointing a third party or KIPO staff to inspect materials related to the corrective actions, or mandating that records be kept for a specified period to facilitate future inspections. These examples are not exhaustive, and the Commissioner may issue additional orders or recommendations as needed to prevent recurrence and ensure fair trade practices.

Before issuing a corrective recommendation, corrective order, or public announcement, the Commissioner of the KIPO is required to provide an opportunity for the involved parties, interested persons, or witnesses to make a statement, as stipulated under amended Article 9 of the UCPA. In accordance with amended Article 3 the Enforcement Decree of the UCPA, the Commissioner must provide a written notice at least 10 days prior to the scheduled date for hearing opinions to the involved parties, interested persons, or their representatives. This notice would allow them an opportunity to present their opinions. The notified parties may attend at a hearing at a designated place and time to present their opinions or submit their opinions in writing.

The recent amendment is expected to address the limitations of the previous UCPA and enhance the effectiveness of administrative remedies, allowing for prompt action against ongoing technology misappropriation. Under amended Article 20 of the UCPA, if a violator fails to comply with KIPO's corrective order without a justifiable reason, they may be subject to an administrative fine of up to 20 million KRW. Prior to imposing the fine, the KIPO Commissioner must issue a notice of proposed fine either by registered mail or directly to the violator, allowing them an opportunity to submit their opinion beforehand. 

Since the KIPO Commissioner’s order is administrative, the violator, of course, retains the right to file an administrative appeal against the Commissioner’s corrective order or notice of fine with the Administrative Appeals Tribunal, or alternatively, may directly file a cancellation lawsuit with the Administrative Court without going through an administrative appeal.

Furthermore, the amended UCPA also introduces new provisions to penalize individuals who damage or destroy another person's trade secrets. 

Specifically, under Article 18(3) of the UCPA, individuals who damage, destroy, or delete another person’s trade secrets for improper purposes may face a prison term of up to 10 years or a fine of up to 500 million KRW.