OVERVIEW OF THE TRADE SECRET

(1) Subject matter of the trade secret

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Information which can be protected as "trade secret" is not limited to technology alone and the scope of protection extends to production methods, sale methods and useful technical or business information for business activities.

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In order to complement the limitation of patent protection whereby exclusive rights are granted only for a 'limited time' in exchange for making the technology 'publicly known,' sometimes only the basic information, to the extent required by the Patent Act, is filed for patent protection while the specific and particular details of the technology is maintained as trade secrets. Here, in deciding whether to patent a particular technology or whether to maintain it as a 'trade secret,' a variety of factors, such as complexity of the technology (the possibility of a competitor developing the same technology and the possible timeframe of such risk), the likelihood of the secrecy being maintained, etc., must be considered as a whole.

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(2) Requirements to be recognized as a trade secret

All three of the following requirements must be met for a particular piece of information to be recognized as trade secret subject to legal protection.

a. Secrecy    

The information must not be publicly known.
Example: A scenario where information is not known to the general public and is generally unobtainable unless provided by the information owner.
b.  Economic Value    

The information must have independent economic value.
Example: A scenario where the owner is able to gain competitive advantage over competitors by using the information or when considerable costs/efforts are needed to develop the information.  
c.  Secrecy Management

The information should have been maintained as secrecy
Example: A scenario where the information is marked confidential, stored in a separate server and access is only permitted to persons to whom disclosure is absolutely necessary for the operation of business.

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• Relaxation of the management requirement

The previous Unfair Competition Prevention Act stated that "reasonable efforts" should have been exercised to maintain the information secret and courts have rigorously demanded human resources, material resources and systemic measures be in place for the maintenance of secrecy. However, it has long been criticized that this level required by the courts is in fact so stringent that information at issue too often failed to be qualified as trade secret because it could not overcome the high threshold of maintaining confidentiality requirement. Therefore, in the amended Unfair Competition Prevention Act which came into force on July 9, 2019, the "reasonable efforts" language was deleted from the text to relax the secret maintenance requirement considerably.

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However, despite the amendment of the law's text, in practice, it is still unclear how the courts will interpret the leniency of the requirement. Therefore, it is advisable to store in secrecy any information that is to be protected as a trade secret, deny access to general staff except for necessary personnel and require separate authorization procedures when access is needed. Also, the confidential information should be maintained by way of, such as, designating an employee who will be in charge of trade secret protection, holding regular trade secret protection training sessions for employees and requesting confidentiality agreements from the employees where applicable.

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(3) Protection provided by trade secrets

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Trade secrets can be protected under the law without a time limitation, as long as the secrecy is maintained.