dimanche, février 27, 2011

Korea: Introduction of Original Certificate Service for Trade Secrets

On November 22 2010 the Institute of Patent Information, an affiliated organisation of the Intellectual Property Office, implemented a new system called the Original Certificate Service for Trade Secrets, which certifies the existence and creation time of trade secrets.

Recently, there has been an increase in trade secret cases in Korea and it is anticipated that this trend will continue. In such cases, identifying and proving the actual trade secret that is the subject of the lawsuit are practically significant. However, the scope of what qualifies as a trade secret is relatively broad and vague. Thus, it is not clear when individual information constituting or including a trade secret is created, changed or extinguished.

Additionally, by its nature, there are no specific methods by which a trade secret can be made public. Therefore, if the information that falls under the definition of a trade secret is not managed systematically, it often becomes difficult for the secret holder or investigating authorities to identify which portion of the information is considered to be a trade secret when an alleged violation occurs. For this reason, even in cases where trade secrets are leaked or misappropriated, victims of trade secret leaks have often been hindered from taking aggressive legal measures or achieving positive results after taking legal action. In response to these concerns, this new service was introduced in order to ease the burden of specifying trade secrets and proving a violation.

The service provides a way to prove objectively the exact time when an electronic document is created (and thus the originality thereof) by using an electronic 'time stamp'. By using software provided by the institute, a hash code is extracted from the document and given to the institute, which in turn issues a time stamp corresponding to that specific hash code. If verification is needed later, the document's time of creation and its originality can be confirmed by comparing the hash code stored in the institute's database with the issued time stamp. By maintaining time stamps through the service, forgery and/or falsification of trade secrets can also be proved. The reliability of this system can be secured to some degree because the institute issuing the time stamp and handling the verification procedure is a government organisation.

To use the service, it is not necessary to disclose original documents that constitute or include trade secrets; it is sufficient to provide the institute with the relevant hash codes only. Using the service also has the advantage of allowing only the trade secrets holder to maintain possession of the actual trade secrets concerned. On the other hand, issuance of a time stamp does not necessarily mean that the electronic document concerned is automatically recognised as a trade secret. The institute issues time stamps based on hash codes that are extracted from electronic documents regardless of the contents thereof. As such, whether information contained in the electronic document concerned satisfies all the requirements for trade secrets (ie, non-public, economic value and maintenance of confidentiality) must be proven separately.

Nonetheless, the service is helpful in preserving trade secrets by allowing for a systematic way of proving the creation date of electronic documents that constitute or include trade secrets. For instance, if a time stamp is systematically issued to a research note and is managed, it is possible, in the course of litigation, to prove objectively when the development (eg, of the research outcome) occurred. It may also be possible to confirm the contents of the research and development conducted during each applicable time period, which will be helpful in identifying the trade secret itself or in proving a violation.

Currently, the service is available only to individuals or entities residing in Korea, but the possibility of extending the service to foreigners residing overseas or to foreign corporations operating in other countries is under discussion.

For further information on this topic please contact Jay Young June Yang, Dong Won Kim or Min Seo Hwang at Kim & Chang by telephone (+822 3703 1114), fax (+822 737 9091 3) or email (yjyang@kimchang.com, dwkim@kimchang.com or mshwang@kimchang.com).

Contributed by Kim & Chang