The Unfair Competition Prevention Act prevents unfair competition and provides civil and criminal measures connected with business identifiers, product imitation, trade secrets, limited provided data, technical restriction measures, domain names, misleading indications, and false statements harming business reputation. Businesses, brand owners, technology companies, and researchers consult it when a problem does not fit neatly into trademark, patent, copyright, or contract law alone. This article covers selected core provisions of the Act and does not decide whether a particular business act is unfair competition.
Purpose and Categories of Unfair Competition
The statute is built around a long definition of Unfair Competition. Articles 1 and 2 are therefore the starting point before remedies or penalties can be understood.
Article 1 states that the Act aims to secure fair competition among business operators and accurate implementation of international commitments by taking measures concerning prevention of Unfair Competition and compensation for damage arising from Unfair Competition, and thereby contribute to sound development of the national economy. Article 2(1) defines Unfair Competition by listing many categories of conduct rather than by giving one general standard.
Article 2(1), item (i) covers use of another person's well-known indication of goods or business, or transfer and other acts involving goods using that indication, in a way that causes confusion with another person's goods or business. Item (ii) covers use of another person's famous indication of goods or business even without the confusion element required by item (i). Item (iii) covers transfer, lease, display, export, import, or electronic provision of goods imitating the configuration of another person's goods, excluding configurations indispensable for securing the goods' function.
Article 2(1) also covers trade-secret misconduct in items (iv) through (x), limited provided data misconduct in items (xi) through (xvi), circumvention-related devices and services for technical restriction measures in items (xvii) and (xviii), improper acquisition or use of domain names in item (xix), misleading indications concerning origin, quality, content, manufacturing method, use, or quantity in item (xx), false statements harming a competitor's business reputation in item (xxi), and certain agent or representative trademark conduct in item (xxii).
Trade Secrets and Limited Provided Data
The Act gives specific definitions for Trade Secrets and Limited Provided Data, and those definitions control whether the special misconduct categories apply. Article 2(6) and Article 2(7), together with Article 2(1), items (iv) through (xvi), are the main provisions.
Article 2(6) defines a Trade Secret as technical or business information useful for business activities, such as manufacturing methods or sales methods, that is managed as secret and not publicly known. The definition contains three statutory elements: usefulness for business activities, secret management, and non-public status. Article 2(1), items (iv) through (ix) then list acquisition, use, and disclosure acts involving Trade Secrets, including acquisition by theft, fraud, duress, or other wrongful means, use or disclosure after wrongful acquisition, and acquisition, use, or disclosure with knowledge or gross-negligence concerning intervening wrongful acquisition or disclosure.
Article 2(1), item (x) covers transfer and other acts involving goods created by use of technical Trade Secrets through listed wrongful-use acts, subject to the exception for certain later acquirers without knowledge or gross negligence. This connects Trade Secret protection to downstream goods, not only to the information itself.
Article 2(7) defines Limited Provided Data as technical or business information accumulated and managed in substantial quantity by electronic or magnetic means as information provided to specified persons in business, excluding Trade Secrets. Article 2(1), items (xi) through (xvi) then list wrongful acquisition, use, and disclosure acts concerning Limited Provided Data. The Limited Provided Data provisions are narrower than ordinary data protection; they apply only where the statutory definition and listed acts are satisfied.
Civil Remedies and Litigation Rules
Chapter II provides civil remedies for Unfair Competition. Articles 3, 4, 5, 6, 7, 8, 9, 10, 14, and 15 are key provisions for injunctions, damages, burden-shifting, document production, confidentiality protection, reputation restoration, and limitation periods.
Article 3 allows a person whose business interests are infringed or likely to be infringed by Unfair Competition to demand cessation or prevention of the infringement. Article 3(2) also allows the claimant, together with that demand, to seek destruction of articles constituting infringement, removal of facilities used for infringement, or other acts necessary for stopping or preventing infringement.
Article 4 makes a person who intentionally or negligently engages in Unfair Competition and infringes another person's business interests liable for damage caused by that conduct, subject to the proviso concerning certain later uses after rights have expired under Article 15. Article 5 provides presumptions and calculation rules for damages for listed categories of Unfair Competition, including business indications, product configuration, Trade Secrets, Limited Provided Data, and agent-trademark conduct.
Article 6 presumes negligence for certain acts involving another person's well-known or famous indication of goods or business and other listed categories. Article 7 allows the court to order production of documents necessary to prove infringement or calculate damages, subject to justifiable grounds for refusal. Article 8 provides a rule for determining reasonable damages when proof of the exact amount is extremely difficult. Article 9 shifts proof concerning acts of producing goods where a technical Trade Secret concerning a production method has been unlawfully acquired or used under the conditions stated there.
Article 10 provides measures for protecting confidentiality in litigation involving Trade Secrets or Limited Provided Data. Article 14 allows a person whose business reputation is harmed by Unfair Competition to demand measures necessary to restore reputation in place of or together with damages, and Article 15 sets limitation periods for injunction claims involving Trade Secrets and Limited Provided Data.
International Commitments and Criminal Procedure
The Act also implements specified international commitments and contains special criminal-procedure provisions. Articles 16, 17, 18, 19, 23, and 23-2 are useful landmarks for those parts.
Article 16 prohibits false indications that goods are produced, manufactured, or processed in a country of a party to the Paris Convention, World Trade Organization, or Trademark Law Treaty where that indication may mislead the public as to the true place of origin. Article 17 prohibits specified misuse of foreign flags, coats of arms, or other emblems of Paris Convention union countries, World Trade Organization members, or Trademark Law Treaty contracting parties.
Article 18 prohibits specified use of marks of international organizations, subject to exceptions. Article 19 lists acts to which specified provisions of the Act do not apply. The exclusions are important because Article 2's definition is broad and some conduct is removed from particular remedies or penalties by Article 19.
Article 23 contains special rules for criminal proceedings involving Trade Secrets. It allows, in specified cases, procedures to protect Trade Secrets from disclosure in open court and related materials, subject to judicial control under the article. Article 23-2 provides special rules for preserving confidentiality of Trade Secrets in procedures involving inspection or copying of litigation records.
Penalties and Dual Liability
The penalty chapter gives criminal consequences for specified Unfair Competition acts and related conduct. Articles 21 and 22 are the main criminal provisions, while civil remedies remain available under the earlier chapters.
Article 21 sets criminal penalties for specified acts, including certain Trade Secret acquisition, use, disclosure, and overseas-use cases, certain acts involving technical restriction measures, misleading indications, and other listed conduct. The article contains many subcategories and mental-state requirements, so it should be read with the precise item that corresponds to the alleged conduct.
Article 22 provides dual-liability rules under which a corporation or person may also be punished when a representative, agent, employee, or other worker commits a listed violation in connection with the business of that corporation or person. This provision does not replace the need to prove the underlying offense; it addresses when an entity or principal is subject to a fine because of an offense committed through its organization.
The Act's structure is therefore layered. A claimant first identifies the Unfair Competition category in Article 2, then checks whether Article 19 excludes the claim, then turns to the relevant civil-remedy article or to penalties in Articles 21 and 22 depending on the proceeding.