Fair Trade Commission Establishes Standard Non-Disclosure Agreement... Strengthening Protection of Subcontractor Technical Data

Mandatory Non-Disclosure Agreement for Subcontracted Technical Data Provision Starting from the 18th

[Asia Economy Sejong=Reporter Lee Junhyeong] The Fair Trade Commission has established a standard non-disclosure agreement (NDA). This measure follows the mandatory requirement starting from the 18th of this month for prime contractors to enter into NDAs when receiving technical data from subcontractors.

On the 15th, the Fair Trade Commission announced the establishment of a standard NDA to ensure the confidentiality of subcontractors' technical data. This standard contract can be used when prime contractors and subcontractors enter into confidentiality agreements.

The establishment of the standard contract by the Fair Trade Commission is in accordance with Article 12-3, Paragraph 3 of the Act on the Fair Transactions in Subcontracting, which takes effect on the 18th. This provision mandates that prime contractors must enter into NDAs when receiving technical data from subcontractors.

The standard contract stipulates that, except in cases where the subcontractor has given prior written consent, the prime contractor must not disclose or reveal the received technical data to third parties. Additionally, the prime contractor is prohibited from using the subcontractor's technical data for purposes other than the original intent. If the prime contractor violates the NDA, they must compensate the subcontractor for any damages incurred. The burden of proving intentional or negligent breach of contract lies with the prime contractor.

The NDA applies to technical data that the subcontractor manages as confidential. The subcontractor must specify the name and scope of the technical data in the contract. If the confidentiality status of the technical data is unclear, the prime contractor may request confirmation from the subcontractor. The subcontractor must respond in writing within 15 days of receiving the request, indicating whether the data is confidential.

Part of the standard non-disclosure agreement established by the Korea Fair Trade Commission.
[Photo by Korea Fair Trade Commission]

The prime contractor must also list the names of employees who will have access to the subcontractor's technical data in the contract. To prevent confusion caused by employees with the same name, their email addresses must also be included. Considering frequent retirements and job changes, the Fair Trade Commission allows the employee list to be updated with the subcontractor's consent and written notification.

The Fair Trade Commission expects that the establishment of the standard NDA will significantly enhance efforts to eradicate technology theft. It plans to encourage related organizations to use the standard NDA and will monitor compliance with NDA execution and identify areas for improvement.

Meanwhile, if an NDA is not concluded or if the contract does not reflect the provisions stipulated in the Subcontracting Act, reports and anonymous tips can be submitted to the Fair Trade Commission's Technology Misappropriation Monitoring Team.

A Fair Trade Commission official stated, "We are diligently preparing a confidentiality protection consulting project to provide education and promotion regarding the mandatory NDA execution and systematic confidentiality management methods," adding, "We will ensure that the new system takes root in the market."

This content was produced with the assistance of AI translation services.