The Unfair Competition Prevention and Trade Secret Protection Act ("UCPA") was recently amended to strengthen protection for certain unfair competition claims, such as the misappropriation of ideas. Protectable ideas are broadly defined as technical or business ideas with economic value that do not necessarily rise to the level of a trade secret.

Many businesses carry out transactions with third parties that may result in the disclosure of proprietary know-how or ideas. The UCPA provides civil, criminal and administrative remedies for companies incurring damages from a third parties' unconsented use of the companies' business information. Specifically, Article 2(1)(j) of the UCPA defines the act of using, or enabling a third party to use, another party's useful technical or business ideas with economic value (which was acquired during transactions) for unconsented purposes as an act of unfair competition. 

Historically, a downside of the civil remedies available under the UCPA has been that the monetary damages awarded to victims were limited to the amount of damages that could be substantiated. The recent amendment to the UCPA (i) introduces punitive damages which allows damage compensation up to three times the actual damages incurred, and (ii) expands the administrative agency's authority for imposing and announcing corrective measures. The amended UCPA has become effective as of April 21, 2021.

Through the amended UCPA, companies that have had ideas misappropriated will have a wider variety of remedies. Moreover, the introduction of the punitive damages provision, which used to only apply to trade secret misappropriation, will increase pressure against companies that misappropriate the ideas of others. Further, the Supreme Court of Korea has indicated that the amended UCPA will also apply to ideas which were improperly misappropriated prior to the amendment. Thus, this amendment will greatly strengthen the ability of companies to protect its ideas and information. At the same time, we urge you to take extra precautions to ensure that your company does not become liable under the amended UCPA.