Hello, I am Attorney Eom Sang-yun of Cheongchul Law Firm.

Today, I will discuss the duration of protection for trade secrets under the Unfair Competition Prevention and Trade Secret Protection Act ("Unfair Competition Prevention Act").

[Question]

While patent rights and copyrights have a duration of validity, I understand that there are no such provisions under the Unfair Competition Prevention Act.

So, are trade secrets legally protected permanently?  

[Answer]

Although the duration of protection for trade secrets under the Unfair Competition Prevention Act is not explicitly stipulated, case law limits the protection period for trade secrets in certain situations.

In other words, “The prohibition of trade secret infringement aims to prevent infringers from unjustly benefiting from a superior position of advantage or time savings that they obtain over fair competitors due to their infringement, and to allow the trade secret holder to return to the position they would have originally occupied had there been no such infringement. Therefore, the prohibition of trade secret infringement should be limited to the temporal scope necessary to achieve the objectives of ensuring fair and free competition and protecting human trust relationships, and in determining that scope, various factors such as the content and difficulty of the trade secret technological information, the time and cost incurred by the trade secret holder in acquiring the technological information, the efforts and methods expended to maintain the trade secret, the time necessary for infringers or other fair competitors to acquire the technological information by independent development or reverse engineering through legal means, the period of employment, including after retirement, during which the infringer worked under the employer, the nature of the duties or positions, the level of access to the trade secret, the internal regulations and agreements regarding trade secret protection, the livelihood activities and career choice freedom of former employees, and comparisons with the protection periods of rights such as patents that have established durations should be considered to be reasonably determined. Furthermore, the temporal scope within which trade secrets are protected is the duration during which they remain confidential between the parties, and thus, with the passage of that period, trade secrets are deemed to have naturally expired and no longer remain confidential,” which reflects the court's basic position (97Da24528).

However, it should be noted that trade secrets are not uniformly protected for a specific period; the determination can vary depending on the circumstances of each case. As shown in the case law above, the duration of protection for trade secrets is reasonably determined by comprehensively considering the content of the technology, the efforts and methods for maintaining the trade secret, and comparisons with the protection periods of patents etc., so it may vary from case to case.

For example, the recent court ruled that ① the plaintiff developed the plaintiff's products from around October 2003 until about August 31, 2009, when the defendant C leaked the relevant materials, and the period over which the information contained in the materials was accumulated did not exceed 6 years; ② since the defendant C was deeply involved in the research and development from the early stages of developing the plaintiff's products, and had acquired considerable knowledge regarding the manufacturing technology for collagen products, even if the defendant company was somewhat lacking compared to the plaintiff in terms of human and material resources, it was seen that the defendant could adequately develop collagen-related products independently without referencing the materials given the time the plaintiff took to develop its products; ③ most of the detailed information of the key technological information claimed by the plaintiff was already publicly disclosed through patents; ④ between the time the materials were leaked and August 2016, a period of 7 years had passed, during which approximately 9 other companies had obtained product approvals from the Ministry of Food and Drug Safety for collagen-based tissue fillers similar to the plaintiff's products, and considering the speed of technological advancement, it does not seem that competitors would require more than 7 years to independently develop collagen products; and ⑤ that excessively long terms for maintaining trade secrets after an employee's resignation pose risks to the freedom of career choice and freedom of trade, the court concluded that the protection period had lapsed as more than 13 years had passed since around August 31, 2009 (Seoul Central 2019Ga Hap 527437).

The above case deals with trade secrets related to former employment, and there is room for different judgments regarding other types of trade secret leaks (typically, for former employment, a protection period of 1 to 5 years is recognized). In addition, even if the trade secret protection period has expired, damages can be claimed. In the above case, only the requests for injunction and destruction were denied due to the expiration of the trade secret protection period, but the claim for damages was recognized.

Therefore, when trade secret infringement is at issue, it is necessary to seek the advice of experts in trade secrets to comprehensively consider the specific circumstances of the case in order to determine the protection period.

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