South Korea - New Unfair Trade Practices Act

Newsletters and Bulletins / February 2002 / Korea (South)

Korea (South) - New Unfair Trade Practices Act

We have been informed that the new Act on the Investigation of Unfair Trade Practices and Remedies against Injury of Domestic Industry became effective on May 4, 2001. The purpose of the new law is to improve the effectiveness of the Korean Trademark Commission (KTC) in fighting unfair trade practices.

The following activities are defined as unfair trade practices under the Act:

(1) the importation into Korea of products that infringe another party's intellectual property, such as patents, utility models, designs, trademarks, copyrights or trade secrets protected by Korean law or by treaties to which Korea is a party or the sale of such infringing products in Korea;

(2) the export or the manufacture of infringing products intended for export;

(3) the export or import of: (a) products having a false or misleading indication of origin; (b) products that bear a damaged or modified indication of origin; or (c) products that do not show the required indication of origin; and

(4) any activity with respect to importation and exportation of goods that is likely to harm the public.

The KTC, which is an administrative body of the Ministry of Commerce, Industry and Energy (MOCIE), will have increased authority to investigate and determine whether unfair trade activities have taken place. The new law will allow the KTC to initiate its own investigation or act on the request of any interested party.

The new Act aims at expediting the investigation and relief process. For this purpose, the period within which an investigation into unfair trade practices can be requested has been limited to 1 year after such practices have taken place. Furthermore, the KTC is now required to decide whether it will investigate the case within 30 days from the date of the request.

In order to prevent the reoccurrence of harm during the course of the investigative and litigation process, the new Act provides a basis whereby the KTC may issue provisional orders directing the cessation of the unfair trademark practices. If a person is or is likely to be harmed irreparably by unfair trade practices, such person may request the KTC to take preliminary measures to prevent such harm. However, persons who make such a request are required to post a security deposit with the KTC.

The KTC will have the authority to take administrative measures or impose fines with respect to certain unfair trade practices. Up to now, the KTC only had the authority to make recommendations to the MOCIE.

After consultation with the Commerce Minister, the KTC may order that administrative remedies be granted, such as the suspension of exports, imports, or the sale or manufacture of the infringing products. The KTC may also hold up customs clearance of goods and order the destruction of infringing products and direct a violator to place a correction notice or public apology in a mass media publication.

The new Act increases substantially the maximum fines the KTC is authorized to impose in certain cases involving unfair trade practices.

In contested cases, where there is a dispute over unfair trade practices, the KTC will have the authority to render decisions with respect to the imposition of fines or administrative measures.

The new Act should provide a more efficient and expeditious way of enforcing intellectual property rights in Korea.

February 2002 Index

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