Investigations by the Korean Intellectual Property Office: Violations of the Unfair Competition Prevention and Trade Secret Protection Act

The misappropriation of trade secrets and acts of unfair competition represent some of the most commercially consequential legal risks facing businesses operating in Korea. The Korean Intellectual Property Office (KIPO) is vested with specialized investigative authority to address such violations, and the consequences of an adverse finding — spanning criminal, civil, and administrative liability — can be severe. Foreign companies and individuals with commercial interests in Korea should have a clear understanding of how KIPO exercises this authority and what is at stake when an investigation is initiated. 

KIPO's Investigative Authority and Jurisdiction 

KIPO operates a dedicated special judicial police system, through which its officers are empowered to conduct criminal investigations into a defined range of intellectual property offenses. These include trade secret infringement, trademark infringement, patent infringement, design right infringement, and unfair competition acts under the Unfair Competition Prevention and Trade Secret Protection Act. This grant of investigative authority reflects the Korean legislature's recognition of the technical complexity of intellectual property disputes and the need for specialized enforcement capacity. 

Investigations are typically initiated upon receipt of a complaint or accusation from an affected party. Once a matter is accepted, KIPO assigns specialized investigators, gathers evidence — including through on-site inspections of business premises where authorized — and prepares a comprehensive opinion report for forwarding to the prosecution. Where violations are identified prior to the conclusion of the investigation, KIPO may issue corrective recommendations, including orders to cease the infringing conduct or remove offending markings, within a specified period. 

Legal Consequences of a Violation 

The sanctions available under the Unfair Competition Prevention and Trade Secret Protection Act are substantial. Criminal penalties for trade secret infringement range from imprisonment of up to ten years and fines of up to KRW 500 million for domestic misuse, rising to fifteen years' imprisonment and fines of up to KRW 1.5 billion where the trade secret is exploited abroad. Where the offender has derived a financial gain from the violation, fines may be increased to between two and ten times the value of that gain. 

On the civil side, Korean law provides for punitive damages of up to five times the amount of actual loss suffered by the rights holder — a provision that significantly increases the financial exposure of parties found liable. Administrative sanctions, including corrective orders, may also be imposed in parallel with criminal and civil proceedings. 

How Siwoo Law Firm Can Assist 

Siwoo Law Firm advises both complainants and respondents in matters arising under the Unfair Competition Prevention and Trade Secret Protection Act, including those subject to KIPO investigation. Our team has the technical and legal expertise to navigate the full lifecycle of such proceedings — from the earliest stages of an investigation through to criminal trial, civil litigation, or settlement. 

For clients who have suffered the misappropriation of trade secrets or other acts of unfair competition, we provide strategic counsel on the initiation of KIPO complaints, the preservation and presentation of evidence, and the pursuit of civil damages — including punitive damages claims — in parallel with criminal proceedings. We work to ensure that our clients' rights are asserted comprehensively and that all available legal remedies are pursued in a coordinated and effective manner. 

For clients who are the subject of a KIPO investigation, we provide immediate advisory support, including a rigorous analysis of the alleged infringement, guidance on engagement with KIPO investigators, and the development of a defense strategy addressing both the criminal and civil dimensions of the matter. Our experience in intellectual property enforcement proceedings allows us to identify procedural issues, challenge evidentiary foundations, and present mitigating submissions persuasively to both investigative authorities and the prosecution. 

Given the increasingly extraterritorial reach of Korean trade secret law and the severity of the penalties applicable to offshore misuse, foreign companies with Korean operations or Korean counterparties are well advised to seek legal counsel at the earliest indication of a potential dispute. Proactive legal engagement is consistently more effective than reactive measures taken after proceedings have been formally initiated.