Starting Tomorrow, the 'Revised Subcontracting Act' Enforced... Confidentiality Agreement Mandatory When Providing Subcontracted Technical Data

Technical Data Scope and List of Employees to be Included in Contract
Court May Order Submission of Trade Secrets if Necessary for Damage Assessment

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[Asia Economy Sejong=Reporter Lee Junhyeong] Starting tomorrow, primary contractors must mandatorily sign a non-disclosure agreement (NDA) to receive technical data from subcontractors.

The Fair Trade Commission announced that the revised Subcontracting Act will be enforced from the 18th. Once the revised Subcontracting Act is in effect, primary contractors must conclude an NDA when receiving technical data from small and medium subcontractors.

Subordinate regulations related to the revised Subcontracting Act will also be enforced starting tomorrow. Previously, the Fair Trade Commission amended the 'Enforcement Decree of the Subcontracting Act' to specify the details that must be included in the NDA, such as the scope and usage period of technical data, the list of employees holding the data, compensation for violations, and the date and method of return or destruction. The retention period for NDAs is set at 7 years. The 'Notice on Criteria for Imposing Penalties on Businesses Violating the Subcontracting Act' was also revised to establish penalty criteria for violations of the NDA signing obligation.

Additionally, the 'Guidelines for Reviewing Requests and Misappropriation of Technical Data' were amended to reflect the relaxed requirements for recognizing technical data following the legal revision. The revised Subcontracting Act eased the required level of confidentiality for protection from "technical data" from "data maintained as confidential through reasonable efforts" to "data managed as confidential." The timing for providing the technical data request form is clearly defined as "at the time of requesting technical data." This is a proactive measure to prevent abuse cases where the request form is issued years after receiving the technical data.

With the enforcement of the revised Subcontracting Act, courts can now order the submission of trade secret materials when necessary for proving damages or calculating the amount of damages. To minimize the leakage of trade secrets during litigation, provisions such as confidential trial procedures, confidentiality orders, and notifications for requests to view litigation records have been established.

The Fair Trade Commission also established a "Standard Non-Disclosure Agreement." The Commission plans to encourage related organizations to use the standard NDA.

Meanwhile, if an NDA is not concluded or 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 Technical Misappropriation Monitoring Team.

A Fair Trade Commission official stated, "With the enforcement of the revised Subcontracting Act, penalty notices, and technical misappropriation review guidelines, the level of technical protection for small and medium subcontractors will be significantly enhanced," adding, "Even if the information qualifies as a trade secret, courts can order the submission of materials, which will substantially resolve the issue of securing evidence for affected companies."

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