Trade secret protection in Korea for foreign businesses follows a dedicated statutory framework — and the rules have real teeth. Whether you are a multinational entering the Korean market, a foreign startup licensing technology to a local partner, or an overseas company that has suffered a data leak involving Korean operations, understanding how Korean law defines and enforces trade secret rights can make a significant difference in protecting what you have built.
What Qualifies as a Trade Secret Under Korean Law
The Unfair Competition Prevention and Trade Secret Protection Act (부정경쟁방지 및 영업비밀보호에 관한 법률, effective as of 1 October 2025) is the primary statute. Under Article 2, information qualifies as a trade secret if it meets three cumulative conditions: it is not publicly known; it has independent economic value — meaning it gives its holder a competitive advantage or causes harm if disclosed without authorisation; and it has been managed through reasonable confidentiality measures.
The third element is often the most contested in litigation. Korean courts assess whether an organisation actually treated the information as confidential based on concrete evidence — written agreements, access controls, internal classification policies, and departure protocols for employees. Simply believing that information is sensitive is not enough; the measures must be objectively identifiable to an outside observer.
The Act covers a wide range of information: technical drawings, manufacturing processes, customer lists, pricing formulas, software source code, and business strategies can all qualify, provided they meet the three conditions above.
Civil Remedies Available to Rights Holders
Under Article 10 of the Act, a trade secret holder may apply to a court for an injunction to stop ongoing or threatened misappropriation. This can include prohibiting an ex-employee from using or disclosing information at a new employer, preventing a business partner from passing information to a third party, or blocking the use of reverse-engineered proprietary processes.
Damages can be sought alongside or after an injunction. Korean courts may calculate damages based on the rights holder’s lost profits, the infringer’s gains, or a reasonable royalty equivalent. In cases involving bad faith or wilful conduct, courts have discretion to increase an award.
A preliminary injunction (가처분) is available where urgent relief is needed before a full trial concludes. These applications require evidence that harm is either occurring or imminent and that financial compensation alone would be insufficient. Preparing solid documentary evidence before filing is essential: courts expect the applicant to demonstrate the nature of the secret, the measures taken to protect it, and the acts of misappropriation alleged.
Criminal Liability and Recent Court Interpretations
Misappropriation of trade secrets also carries criminal consequences. Article 18 of the Act distinguishes between domestic and overseas cases. Leaking a trade secret to a foreign entity or for use abroad carries a penalty of up to fifteen years’ imprisonment or a fine of up to KRW 1.5 billion. Domestic misappropriation carries up to ten years’ imprisonment or a fine of up to KRW 500 million. Attempted violations under Article 18(1) and (2), and preparation or conspiracy for those offences, are separately punishable under Articles 18-2 and 18-3.
Article 19 contains a dual liability provision: where an employee or agent commits a violation in connection with the business of a legal entity, the corporation itself is also subject to a fine of up to three times the amount specified in the relevant provision, unless the entity can show it exercised due care and supervision.
Two recent Supreme Court decisions have refined how these provisions apply in practice. In Supreme Court Decision No. 2025도11906 (2026.01.15), the Court held that disclosing a trade secret to a party who does not yet know it constitutes a completed offence of disclosure under the Act — regardless of whether the parties later conspired to use the information or actually used it together. The recipient who knowingly receives the information is separately liable for the offence of acquisition. This ruling reinforces that both the person who leaks and the person who receives trade secrets can face independent criminal exposure from the moment of transfer.
In Supreme Court Decision No. 2022도7718 (2025.09.25), the Court addressed what constitutes “use” of industrial technology. Although this case arose in the industrial technology context, it is a useful warning that Korean courts may treat reliance on protected technical information to save development time or cost as legally significant use.
Practical Steps for Foreign Businesses Operating in Korea
Before a dispute arises, the most effective protection comes from establishing clear internal systems. Contracts with employees and business partners in Korea should contain specific confidentiality clauses that identify the categories of information subject to protection, the obligations that survive termination, and the governing law and dispute resolution mechanism. Generic boilerplate is routinely challenged; precision matters.
Companies should also maintain internal records documenting when specific pieces of information were created, what measures were applied to restrict access, and which individuals had authorisation to view or use each category of information. This documentation becomes critical evidence if a dispute reaches court or the prosecutor’s office.
Where a breach is discovered or suspected, time is a significant factor. Evidence stored on servers, employee devices, or cloud platforms can be overwritten or deleted quickly. Consulting a lawyer at the first sign of a problem — before confronting the employee or partner directly — allows for a coordinated approach to evidence preservation, civil injunction applications, and, where appropriate, a criminal complaint to the relevant investigative authority.
For more background on establishing a legal presence in Korea and structuring your business to minimise legal exposure, see our overview of foreign direct investment in Korea.
Our firm has represented clients in industrial technology misappropriation cases in Korea, including matters involving autonomous driving technology. Direct experience across both the civil and criminal dimensions of these disputes informs the practical advice we provide to businesses looking to prevent and respond to trade secret theft.
If the situation described here is similar to yours, you are welcome to send the basic facts through KakaoTalk. Initial inquiries in English are handled directly.
Frequently Asked Questions
Does Korean law protect trade secrets owned by foreign companies?
Yes. The Unfair Competition Prevention and Trade Secret Protection Act applies regardless of the nationality of the rights holder. A foreign-owned business operating in Korea, or a foreign company whose trade secrets are misappropriated in Korean territory, can seek civil injunctions, damages, and support a criminal complaint under Korean law.
What counts as a “reasonable confidentiality measure” under Korean law?
Korean courts look at whether the holder took objectively identifiable steps to keep the information secret. Common measures include written confidentiality agreements with employees and contractors, access controls limiting who can view sensitive files, clear internal labelling of confidential documents, and exit procedures that remind departing employees of their ongoing obligations. No single measure is automatically sufficient; courts assess the overall picture.
Can a Korean court issue an injunction quickly if a trade secret is being misused?
A preliminary injunction (가처분) can be sought without waiting for a full trial. Courts can move relatively quickly where there is clear evidence of ongoing harm. However, the applicant must show both that misappropriation has occurred or is imminent and that monetary damages alone would be inadequate. Gathering the right evidence before filing is critical to the success of an emergency application.