We receive emails, regularly, requesting advice on the protection of IP rights in Korea and China. Most of the issues I addressed in this blog come from these questions. I realized, after writing over 900 posts on this blog, that I never drafted a post on trade secrets. Don't blame me, blame my paralegal. :)
Definition of Trade Secret
you probably know, a trade secret is, simply any design, process,
formula or the like that is not known or readily ascertainable by a
third party that may provide an economic benefit to the individual
possessing the trade secret. Notwithstanding, non-compete and
non-disclosure agreements, Korea and most countries, typically, only
protect trade secrets against an alleged violator when the alleged
holder of the trade secret makes a "reasonable effort" to protect the
trade secret and is able to establish that it has made this reasonable
effort to protect the trade secret.
Protection of Trade Secrets in Korea
1. Identify your
Trade Secrets. Draft a document in English and Korean identifying the
trade secrets of your company. This does not mean you need to write
down the specific details of the trade secret. Example: Formula for the
Manufacturer of a Black Carbonated Beverage better known as Classic
2. Non-Disclosure & Non-Compete
Agreements. Have all that you do business with sign detailed and
Korean-specific Non-Compete and Non-Disclosure Agreements. Include a
liquidated damages clause in these agreements. These agreements should
be executed by all suppliers, employees, directors and others in Korea
that you are doing business with.
3. Put in Place a
Trade Secret Protection Scheme. Before creating a trade secret
protection scheme please consider how your trade secret is likely to be
misappropriated by others - think, at a minimum, employees, vendors,
suppliers and customers. After the analysis, write down the scheme and
integrate the scheme into your business. We strongly advise discussing
the scheme with a business or legal consultant.
4. Due Diligence. Due Diligence in hiring, firing, engagement with outside business partners and vendors.
Enforce Your Rights. If you are not willing to enforce your rights in a
Korean court - you will, likely, become known as a company with
softball managers and will, thus, likely be the victim again in the
future. Don't forget even the large Korean conglomerates are engaged in
litigation to protect their IP - some of this litigation is, simply, to
defer future violators.
IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S. www.ipglegal.com