Corporate Dispute Attorney Complete A to Z Response Guide (Incheon Songdo, South Korea)

1. Concept and Types of Corporate Disputes

Corporate disputes refer to all forms of legal conflicts that may arise during a company’s business activities in South Korea. The scope ranges from simple contract breaches to complex technology theft and trade secret violations.

Corporate disputes are broadly classified into civil disputes and criminal cases. Civil disputes primarily aim for damages or contract performance, while criminal cases deal with punishment for criminal acts such as fraud, breach of trust, and embezzlement.

In the modern corporate environment in South Korea, technology-related disputes are particularly increasing. This is because the core competitiveness of companies has shifted from tangible assets to intangible assets, making the protection of trade secrets and technical information more important.

2. Initial Response Strategies for Corporate Disputes

When corporate disputes occur, initial response often determines the outcome of the entire dispute. First, it is necessary to accurately identify the nature of the dispute and clearly analyze the legal issues.

Evidence preservation should be the highest priority consideration. Particularly in technology-related disputes, rapid evidence collection and preservation are essential due to the volatility of digital evidence.

The possibility of negotiation with the opposing party should also be reviewed early. Not all disputes need to lead to court battles, and proper negotiation can often save costs and time.

3. Distinction Between Civil Disputes and Criminal Cases

The distinction between civil resolution and criminal response in corporate disputes is very important, as the same matter can have different outcomes depending on the approach.

Civil disputes mainly take the form of damage compensation claims, contract cancellation or termination, and unjust enrichment return claims. In such cases, resolution through agreement between parties is possible, and disputes can be concluded through monetary compensation.

Criminal cases correspond to criminal acts stipulated in the Criminal Act or special laws, such as fraud, breach of trust, embezzlement, and professional breach of trust. Criminal complaints can request investigation by investigative agencies, which also has the effect of applying psychological pressure to the opposing party.

Special law violation cases such as Tax Crimes Punishment Act or Customs Act violations also frequently occur in corporate disputes. These cases require more specialized legal knowledge than general civil disputes.

4. Characteristics of Technology-Related Corporate Disputes

The proportion of technology-related disputes in modern corporate disputes in South Korea is rapidly increasing. This is because companies’ competitiveness increasingly depends on technological capabilities.

Representative types of technology disputes include trade secret violations, patent infringement, trademark infringement, and copyright infringement. Among these, trade secret violations are classified as the most challenging type of dispute due to difficult proof and complex damage assessment.

In technology disputes between manufacturers, product design drawings, manufacturing processes, and quality control methods become major issues. In software-related disputes, source codes, algorithms, and database structures become the subject of disputes.

Recently, disputes related to new technologies such as artificial intelligence, big data, and Internet of Things are also increasing, raising the need for specialized legal services in these areas.

5. Trade Secret Dispute Response Methods

Trade secret disputes require rapid and accurate response as they are directly connected to a company’s core competitiveness. According to the Unfair Competition Prevention and Trade Secret Protection Act of South Korea, for trade secrets to be recognized, all three requirements must be met: non-disclosure, economic value, and secret management.

When trade secret infringement is suspected, the first thing to do is evidence preservation. Digital forensics for electronic evidence collection, securing related documents, and preparing witness statements are necessary.

Civil remedies include injunction claims, damage compensation claims, and unjust enrichment return claims. In urgent cases, additional damage can be prevented through injunctive relief.

As a criminal response, complaints can be filed for trade secret infringement. In this case, imprisonment of up to 3 years or fines of up to 30 million won can be imposed, providing a strong deterrent effect.

6. Intellectual Property Infringement Dispute Resolution

Intellectual property infringement disputes occur regarding various rights such as patents, trademarks, copyrights, and design rights. Each right has different protection requirements and remedy methods, so accurate legal analysis is necessary.

In patent infringement disputes, the technical scope of the patented invention and the components of the infringing product must be compared and analyzed. If infringement is recognized, injunction and damage compensation can be claimed, and in cases of intent or gross negligence, compensation liability up to three times the damage amount can be imposed.

In the case of trademark infringement, the identity or similarity of trademarks, identity or similarity of designated goods, and possibility of confusion are comprehensively judged.

In copyright infringement disputes, originality, dependency, and similarity must be proven. Recently, software copyright infringement cases are increasing, requiring attention.

7. Contract Dispute Prevention and Solutions

To prevent contract disputes between companies, careful attention is needed from the contract drafting stage. Major provisions of contracts should be clearly and specifically stated, and dispute resolution methods should be predetermined.

Response methods when contract breaches occur include performance demand, contract cancellation or termination, and damage compensation claims. Appropriate remedies should be selected according to the nature of the contract and the degree of breach.

In international contracts, governing law and dispute resolution clauses are particularly important. When arbitration clauses exist, arbitration procedures must be conducted instead of court litigation, so this should be thoroughly reviewed when concluding contracts.

Defect liability disputes arising from supply contracts are also frequent. Disputes can be largely prevented by clearly stipulating the scope of defects, correction obligations, and damage compensation scope in contracts.

8. Legal Procedures for Corporate Dispute Resolution

Legal procedures for resolving corporate disputes are broadly divided into litigation and non-litigation procedures. Litigation includes civil litigation, criminal complaints, and administrative litigation, while non-litigation procedures include arbitration, mediation, and settlement.

Before filing civil litigation, practical benefits, possibility of victory, and enforceability should be comprehensively reviewed. Also, when preservation measures are necessary, provisional disposition or provisional seizure should be applied along with the main lawsuit.

Criminal complaints have the advantage of clarifying facts through investigation by investigative agencies, but also have the limitation that non-prosecution may be decided according to the judgment of investigative agencies.

Arbitration has advantages of confidentiality and expertise, so it is frequently used in complex technology disputes or international transaction disputes. However, since appeal measures against arbitration awards are limited, careful selection of arbitrators is necessary.

K&P Law Firm possesses rich practical experience in successfully resolving corporate disputes in various fields in South Korea.

Manufacturing Sector Technology Dispute Experience:
We have successfully resolved civil and criminal disputes related to automotive manufacturing equipment trade secret theft, handling core manufacturing techniques and design drawing leakage cases. In technical disputes related to fire extinguisher manufacturing equipment, we dealt with highly technical issues regarding steel plate elongation rates and resolved complex legal problems related to product safety.

Semiconductor Industry Dispute Expertise:
We have handled multiple cases related to core technologies in the semiconductor field, including disputes related to semiconductor lithography equipment technology, semiconductor manufacturing equipment program trade secret theft disputes, and semiconductor manufacturing equipment design trade secret theft cases. Through these experiences, we have accumulated expertise in complex technical issues and trade secret protection in the semiconductor industry.

IT and Software Dispute Resolution:
We successfully proceeded with civil and criminal disputes related to financial automation equipment computer program trade secrets, including business injunctions, protecting client interests. We have resolved various software and hardware-related disputes including game program defect disputes with game development outsourcing companies, online lecture program defect disputes, and set-top box defect disputes.

Intellectual Property and Cosmetics Fields:
We have successfully handled trademark law violations and unfair competition prevention law-related disputes involving famous trademark misappropriation. In disputes related to harmful ingredients to human body during cosmetics OEM processes, we clearly organized and resolved complex responsibility relationships between manufacturers and consignment companies. In drone design defect disputes, we protected client rights by comprehensively reviewing related laws including Aviation Safety Act.