How to Avoid a Prison Sentence and Monetary Payment for Trade Secret Infringement?

This is 'LAWFIRM LEAP,' where a team of three attorneys with backgrounds at major law firms and the police handle cases together.

Among those reading this article, there may be some facing the risk of punishment for trade secret infringement.

For every company, confidential materials such as core technology or production know-how that determine the company's value are managed internally, and the security regulations for them are strict.

This is presumably because, if such important materials were leaked externally, the damage to the company would be fatal.

If you are accused of trade secret infringement, you may face criminal punishment as well as civil liability for damages caused.

And even if you avoid a prison sentence and receive a fine or a suspended sentence, you will still end up with a criminal record.

Therefore, obtaining a Suspended Indictment at the investigation stage is of utmost importance.

Only then can civil liability also be reduced.

With that in mind, today the expert attorneys of LAWFIRM LEAP, who have experience at major law firms and as former police officers, would like to present the best way to grasp the core of the matter and prepare a defense before undergoing questioning in such a case.

If you spend just 3 minutes reading the article below, you will learn how to obtain leniency.

After reading this article, if you need practical legal assistance such as accompaniment during a police investigation, please request a consultation with an expert attorney at LEAP.

01What Is the Level of Criminal Punishment and Civil Liability for Trade Secret Infringement?

Materials treated as confidential by a company are protected under the Unfair Competition Prevention and Trade Secret Protection Act.

Accordingly, the Act provides that if a person infringes upon a business's interests by intentionally or negligently leaking the company's internal confidential materials, that person must compensate for the resulting damages.

Unfair Competition Prevention and Trade Secret Protection Act, Article 11 (Liability for Damages Due to Trade Secret Infringement) A person who causes damage to a trade secret holder's business interests by intentionally or negligently infringing upon a trade secret shall be liable to compensate for such damage.

Moreover, if internal company confidential information is disclosed, under the Criminal Act, the person may face imprisonment of up to 10 years or a fine of up to KRW 1.5 billion.

Since a higher level of criminal punishment tends to result in greater civil damages as well, you must obtain advice from an expert attorney to prepare a response strategy before undergoing a police investigation.

Otherwise, you may receive severe punishment due to an unfavorable statement.

02What Is the Initial Strategy for Defending Against Trade Secret Infringement Sentencing?

Once a complaint has been filed regarding such a matter, you must follow the procedure while carrying out an initial strategy together with an expert to explain your position.

For information to be recognized as confidential within a company, it must be proven that the company maintained and managed it as confidential and that considerable cost and effort were invested in it.

Furthermore, if you actually engaged in conduct that could be recognized as the offense and the other party suffered damage as a result, you should show that you acknowledge the offense and express remorse during the police investigation.

Only then can the intentionality of the incident be reduced, increasing the likelihood of leniency.

You must also quickly identify mitigating factors to reduce legal liability.

You may prove mitigating circumstances by showing, for example, that you easily took out materials you had been personally reviewing, or that although you disclosed them, you did not sell them or otherwise seek commercial gain from the other party.

However, if you deny the charge, you need evidence to rebut the claim that the matter at issue was not publicly known and had been managed as confidential.

Only then can you explain, as a matter of law, why the conduct does not constitute an offense, and by proving your innocence in the criminal case, you may also avoid civil liability.

03How to Reduce Damages for Trade Secret Infringement?

In general, the first priority is to restore the financial loss suffered by the company due to this conduct.

You should verify whether the other party's claims regarding actual disclosure of information with genuine economic value, or any false statements, are true, and then formulate a strategy accordingly.

In general, if the economic value is low and this is a first offense of disclosure, the damage suffered by the other party may also be lower, which can work in your favor in claims for damages such as consolation money.

Therefore, the assistance of an expert experienced in intellectual property litigation is essential to establish an initial strategy to reduce criminal punishment, and efforts should be made in advance—through fines or settlement, for example—to avoid civil proceedings as well.

However, some people file for civil damages directly, without going through the criminal complaint process.

In such cases, only civil litigation is available, but you must obtain a commitment in the settlement agreement that no further disputes will be raised, and since accurately assessing the amount of loss is important, it is advisable to proceed with the help of an expert experienced in civil damages claims.

Having actual investigation experience enables us to respond effectively to investigations.

The attorneys at LAWFIRM LEAP are experts with experience at Korea's largest law firms, Kim & Chang and Bae, Kim & Lee, as well as backgrounds as former police officers, and possess in-depth know-how in responding to investigations in both civil and criminal cases.

Therefore, if you work with LAWFIRM LEAP, you can find the solution to how to respond according to the investigative agency's approach in order to reduce legal liability and obtain a Suspended Indictment or Acquittal.

If the information introduced today has not resolved your concerns, please feel free to contact LEAP at any time.

We will thoroughly analyze your situation and actively help you bring the case to a swift conclusion with a tailored strategy before the investigation stage ends.

Thank you for reading this long article.