The Unfair Competition Prevention and Trade Secret Protection Act ("UCPA") defines a range of unfair competitive acts, including a provision prohibiting the act of using a mark similar or identical to another person's mark that is well-known in Korea to cause confusion as to the source of a product or business ("consumer confusion provision"). Under the current version of the UCPA, anyone who violates the consumer confusion provision may be liable for a violation even if that person used the mark in question in good faith before the mark became well-known ("Good Faith Prior User").

The UCPA also includes a provision prohibiting trademark dilution as an act of unfair competition ("dilution provision"). Since the dilution provision was added in 2001, it has included several exceptions where it does not apply, including against Good Faith Prior Users, in contrast to the consumer confusion provision. This difference in legislative language led to a general consensus that Good Faith Prior Users continue to bear legal liability for committing consumer-confusing acts, which was further supported in a decision from the Supreme Court. However, over time, some commentators have increasingly criticized this interpretation as unfair to Good Faith Prior Users, although there continue to be other opinions that consumer confusion should continue to be prohibited under all circumstances. 

A proposed amendment to the UCPA ("Proposed Amendment") has now been promulgated as of March 28, 2023, which allows an exception for Good Faith Prior Users by removing "acts of continuously using, without improper purpose, a mark similar or identical to another person's mark since before that mark became well-known in Korea" from the scope of acts considered to be unfair competition. The Proposed Amendment also includes a provision allowing the legitimate owner of a well-known mark to require Good Faith Prior Users to make and use labels as needed to prevent confusion and/or deception.

While the Proposed Amendment carves out an exception for Good Faith Prior Users from claims of unfair competition, owners of well-known marks should seek to ensure that Good Faith Prior Users put in the necessary efforts to prevent consumer confusion and/or deception as provided under the amended statute. The amendment will enter into force on September 29, 2023, and will apply to acts of unfair competition that take place on or after the date.