Administrative

Trade Secrets Protection Act Lawyer

Trade Secrets Protection Act Lawyer | What counts as a trade secret, and what happens when one is taken

Summary

The Unfair Competition Prevention and Trade Secret Protection Act (부정경쟁방지 및 영업비밀보호에 관한 법률) protects technical or business information that a company keeps confidential and that has independent economic value from being used or disclosed without authorization. Disputes typically arise when an employee leaves for a competitor with internal data, or when a business partner uses shared information outside the agreed purpose. The same set of facts can trigger a civil injunction and damages claim and a separate criminal investigation, so both the company that lost the information and the person accused of taking it need to understand how "trade secret" is legally defined and how the burden of proof works.

Administrative · IP Governing law: Unfair Competition Prevention and Trade Secret Protection Act Civil injunction & damages Criminal misappropriation

Trade Secrets Protection Act | Civil claim and criminal case run on separate tracks

A single trade secret leak can produce a civil case (injunction, damages) filed by the company and, separately, a criminal investigation triggered by a complaint. They use different standards of proof and different remedies, and a person accused often has to respond to both at once.

Civil Track

When the holder wants the use stopped and compensated

Who files	The company/individual holding the trade secret
Standard of proof	Preponderance of evidence (civil)
Main remedies	Injunction, destruction, damages
Typical duration	Several months to 1–2+ years

Based on injunctions under 부정경쟁방지 및 영업비밀보호에 관한 법률 제10조 and damages/statutory damages under 제11조 and 제14조의2.

Criminal Track

When misappropriation is reported to the police/prosecution

Who files	Victim's criminal complaint or ex officio investigation
Standard of proof	Beyond reasonable doubt
Main outcomes	Indictment, fine, or imprisonment
Typical duration	Investigation 2–6+ months, then trial

Penalties under 부정경쟁방지 및 영업비밀보호에 관한 법률 제18조, with enhanced penalties where the secret was intended for use overseas (제18조 제1항).

Trade Secrets Protection Act | What legally qualifies as a 'trade secret'

Not every piece of internal information is a protected trade secret. The Act sets out three cumulative requirements, and most disputes are actually fought over whether these elements are met rather than over whether copying occurred.

Element 1

Secrecy (non-public)
The information must not be generally known or readily ascertainable to persons in the relevant industry (부정경쟁방지 및 영업비밀보호에 관한 법률 제2조 제2호). If the same information appears in a patent filing, a published paper, or an employee's general industry know-how, courts are reluctant to treat it as secret.

Element 2

Independent economic value
The information must give the holder a competitive advantage because it is not known to competitors — for example, cost data, customer lists, or a manufacturing process that saves time or money (부정경쟁방지 및 영업비밀보호에 관한 법률 제2조 제2호). Purely personal skill or generic experience an employee accumulated is usually not enough.

Element 3

Reasonable confidentiality measures
The holder must have taken reasonable efforts to keep the information secret, such as access restrictions, NDAs, marking documents as confidential, or IT controls (부정경쟁방지 및 영업비밀보호에 관한 법률 제2조 제2호). Companies that never labeled or restricted the information often lose on this element alone, regardless of how valuable it actually was.

Conduct requirement

An act of misappropriation must exist
Even if the three elements above are met, liability requires acquisition, use, or disclosure by improper means, or use/disclosure in breach of a duty to maintain secrecy (부정경쟁방지 및 영업비밀보호에 관한 법률 제2조 제3호). Independently developed information that happens to be similar is not misappropriation.

Where these disputes usually get complicated

In practice, litigation rarely turns on a clean admission of copying. It turns on whether the plaintiff can show the information was actually treated as confidential at the time, and whether the defendant's version — that they used general skill, publicly available data, or independently developed material — can be disproven. Documentary evidence of access logs, confidentiality agreements, and the timeline of when the defendant obtained the information tends to decide these cases.

Trade Secrets Protection Act | What the trade secret holder can actually claim

For companies that discover a leak, the first question is what can realistically be obtained through litigation, and how fast.

Injunction to stop use or disclosure

A trade secret holder can seek an injunction against a person who is using, disclosing, or is about to use the trade secret, and request destruction of materials embodying it (부정경쟁방지 및 영업비밀보호에 관한 법률 제10조). Because ordinary litigation takes time, holders often file for a preliminary injunction first to stop the harm before it compounds.

Damages and statutory damages

The holder can claim damages for the actual loss, and the Act allows several ways to calculate that loss, including the infringer's profit from the misuse (부정경쟁방지 및 영업비밀보호에 관한 법률 제14조의2). In cases where actual damages are hard to prove, the court may also award enhanced (treble) damages for willful infringement (제14조의2 제6항).

Evidence collection is often the real battle

Because trade secret misuse is rarely admitted openly, much of the litigation effort goes into forensic review of company devices, access logs, and email records to show when and how the information moved. Courts have also recognized a document production order mechanism to help a holder obtain evidence held by the other side (부정경쟁방지 및 영업비밀보호에 관한 법률 제14조의3).

Trade Secrets Protection Act | Where these disputes typically start

Most cases fall into a small number of recurring fact patterns, and the applicable defenses differ depending on which one applies.

Departing employee cases

A company suspects a former employee took customer lists, source code, or process manuals to a new employer or a competing startup. The employee's defense often centers on distinguishing protected trade secrets from general skill and experience they are entitled to use freely.

Business partner / NDA breach cases

Information shared for a joint venture, supply negotiation, or due diligence ends up used outside the agreed scope. Here the NDA's scope and the actual confidentiality practices at the time of disclosure usually decide the outcome, more than the NDA's wording alone.

Overlap with employment restrictive covenants

Companies sometimes pursue both a trade secret claim and a separate claim for breach of a non-compete or confidentiality agreement. Because non-compete clauses are independently reviewed for reasonableness by courts, the two claims can lead to different outcomes even on the same facts.

Cross-border and technology leakage cases

Where a trade secret is alleged to have been taken for use outside Korea, criminal penalties are enhanced and investigative agencies tend to act more aggressively (부정경쟁방지 및 영업비밀보호에 관한 법률 제18조 제1항). These cases often involve parallel export control or national core technology issues depending on the industry.

Trade Secrets Protection Act | From initial consultation to resolution

Fact-gathering and evidence review
Before any filing, the facts are reviewed: what information is claimed as secret, what confidentiality measures existed, and what evidence shows access or use by the other side.

Preliminary injunction (if urgent)
If the holder needs to stop ongoing use immediately, a preliminary injunction application can be filed alongside evidence preservation requests.

Civil complaint / criminal complaint
Depending on the client's position and goals, a civil suit for injunction and damages, a criminal complaint, or both are prepared and filed.

Investigation or litigation proceedings
On the criminal side, police and prosecutors investigate and decide whether to indict; on the civil side, both parties exchange briefs, submit expert opinions if technical issues are involved, and attend hearings.

Resolution
Cases resolve through settlement, judgment, or in the criminal track through indictment, non-indictment, or trial verdict; the civil and criminal outcomes do not automatically determine each other.

Trade Secrets Protection Act | How fees are typically structured

Retainer fee
Generally set based on whether the case is civil, criminal, or both, and on the complexity of the technical or business information involved and the number of parties.

Success fee / contingency
For civil cases, often tied to the amount of damages recovered or the value of the injunction obtained; for criminal defense, tied to the outcome (non-indictment, reduced charge, or sentencing result).

Expert and forensic costs
Digital forensic review of devices and servers, and technical expert opinions on whether information meets the trade secret elements, are billed separately from the retainer in most cases.

Preliminary injunction costs
Filing a preliminary injunction typically involves a separate, smaller fee given the shorter timeline and the security deposit the court may require of the applicant.

※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.

Trade Secrets Protection Act | Self-Check Before You Contact a Lawyer

1️⃣ For companies that suspect a leak

Can you point to specific documents or files, not just a general sense that 'something was taken'?
Did you have any written confidentiality policy, NDA, or access restriction covering this information?
Do you have logs (email, USB, cloud access, printer records) showing when the information was accessed or transferred?
Is the person still using or disclosing the information now, or did the use already stop?

2️⃣ For employees or new employers accused of misuse

Was the information you used ever marked confidential or restricted, or was it something you learned as general skill on the job?
Did you sign an NDA or non-compete, and if so, what exactly does it cover?
Can you show independent development, public availability, or prior lawful possession of the information?
Have you received a formal cease-and-desist letter, a civil complaint, or a criminal summons?

3️⃣ For business partners in an NDA dispute

Does the NDA define what information is covered, and does the disputed information fall within that definition?
Was the information actually treated as confidential in practice, not just labeled so on paper?
Did the use occur within or outside the scope of the original agreed purpose?

Frequently Asked Questions

Q. Does information have to be a formal 'secret document' to be protected as a trade secret?

A. No. The law looks at substance, not labels: information can be protected if it is not publicly known, has economic value from being secret, and was reasonably kept confidential (부정경쟁방지 및 영업비밀보호에 관한 법률 제2조 제2호). Conversely, even a document marked 'Confidential' may not qualify if it was never actually restricted or if it is generally known in the industry.

Q. Can a company sue an employee just for moving to a competitor?

A. Simply changing jobs is not misappropriation. Liability requires proof that the employee acquired, used, or disclosed specific information by improper means or in breach of a duty of confidentiality (부정경쟁방지 및 영업비밀보호에 관한 법률 제2조 제3호). General skills and experience gained on the job typically remain the employee's to use.

Q. What is the difference between a trade secret claim and a non-compete agreement claim?

A. A trade secret claim protects specific confidential information regardless of any contract, while a non-compete claim enforces a separate agreement restricting where the employee can work, and courts independently review whether that restriction is reasonable in scope and duration. The two claims can be brought together but are assessed under different standards.

Q. Can the police pursue a case even if the company hasn't decided to sue civilly?

A. Yes. Trade secret misappropriation can be prosecuted as a criminal offense on its own, separately from any civil suit (부정경쟁방지 및 영업비밀보호에 관한 법률 제18조). A criminal complaint and a civil suit can proceed at the same time, and the outcome of one does not automatically decide the other.

Q. Is there a time limit to bring a claim?

A. For civil injunctions, a request must generally be made while the misappropriation is ongoing or imminent; the Act also provides that certain claims are subject to prescription periods tied to when the holder became aware of the misappropriation and the identity of the infringer, so early consultation matters once a leak is discovered (부정경쟁방지 및 영업비밀보호에 관한 법률 제14조).

Q. What happens if the trade secret was allegedly taken for use overseas?

A. Penalties are enhanced where the information was acquired, used, or disclosed with intent to use it outside Korea, and investigative agencies tend to treat these cases with more urgency (부정경쟁방지 및 영업비밀보호에 관한 법률 제18조 제1항). These cases can also intersect with export control or national core technology regulations depending on the industry.

Q. Can a company get an injunction quickly, or does it have to wait for a full trial?

A. A preliminary injunction can be requested to stop ongoing or imminent use while the main case is pending, which is often the priority when the leak is still causing active harm. The court will weigh the likelihood of success and urgency before granting it, so supporting evidence matters even at this early stage.

Q. What kind of evidence actually matters most in these cases?

A. Courts tend to focus on contemporaneous evidence: how the information was labeled and restricted before the dispute arose, access and transfer logs, and communications around the time the alleged misuse occurred. Evidence created after the dispute started, such as after-the-fact confidentiality memos, carries much less weight.

Q. If I'm accused of taking a trade secret, should I respond to a cease-and-desist letter myself?

A. A cease-and-desist letter is often the first formal step and can shape whether the matter proceeds to litigation, so how it is answered matters. It is generally advisable to have a lawyer review the specific claims and evidence referenced before responding, since an unconsidered response can be used later in litigation.

Q. How is the amount of damages calculated in a trade secret case?

A. The Act allows damages to be calculated in several ways, including the profit the infringer gained from the misuse, or a reasonable royalty, and courts may award enhanced damages up to three times the amount for willful and serious infringement (부정경쟁방지 및 영업비밀보호에 관한 법률 제14조의2). Which method applies depends on what evidence is available to prove each measure.

Official References

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