Korea toughens criminal actions on patent and industrial secret breach

2019.07.04 15:10:50

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Anyone found to have intentionally abused patents or leaked confidential business information in Korea will be subject to pay up damages tripling the financial harms under the revised patent act.

The Korean Intellectual Property Office (KIPO) on Thursday disclosed revisions to the patent law and unfair competition prevention and trade secret protection act effective from July 9.

Until now, the median value of compensation amount in a patent infringement lawsuit in Korea was only 60 million won ($51,299), which is only one-ninth of that of the United States’ 6.57 billion won.

The patent office expected that the enforcement of punitive compensation system for damages will break the vicious cycle of intellectual property infringement and create an environment where intellectual property receives proper treatment in the market.

In addition to introducing punitive compensation system, the patent office said there will be another layer of protection on intellectual property as royalty approval standard on infringement of patents has been changed from “nonexclusive” to “reasonable” license fee.

The patent office said that the basic rate for royalty which is currently set at in between 2 and 5 percent will be increased to up to 13 percent which is equal to that of the U.S. The rate, which had been set based on existing royalty contract of the same industry, will now be judged by the court based on discretionary power even without other reference data.

Those that infringe patent rights, meanwhile, will also be imposed violation presenting duty, which requires infringers to reveal their infringement actions in detail.

Criminal punishment on disclosing confidential business information will also be enhanced, the office said. A former employee of a company with confidential information, for example, that decline to delete or return related information back to the company will be criminally punished. Those that leak confidential information inside the country will be sentenced from five to 10 years while outside the country 10 to 15 years. The penalty ceiling has also been raised from 50 million won to 500 million won for leakage inside the country and from 100 million won to 1.5 billion won outside the country.

By Won Ho-sup and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]