A foreign manufacturer licenses production know-how to a Korean partner. Two years later, a similar product appears in the market, the Korean partner denies misuse, and the most important evidence is inside factory servers, engineering notebooks, messaging records, and production equipment that the foreign company cannot access.

That scenario explains why K-Discovery in Korea matters. Korea has historically had a narrower evidence-gathering system than the United States, where broad party-led discovery, depositions, and sanctions are central to commercial litigation. In January 2026, Korea's National Assembly passed amendments introducing a discovery-like procedure for technology data misappropriation claims under the Act on the Promotion of Mutually Beneficial Cooperation Between Large Enterprises and Small and Medium Enterprises.

The amendments were promulgated in February 2026 and are scheduled to take effect in February 2028 after a two-year transition period. For foreign companies, the practical question is not only whether the new procedure helps plaintiffs. It is also whether Korean subsidiaries, joint ventures, suppliers, and research teams are ready for court-supervised inspections, evidence preservation orders, and party examinations.

K-Discovery in Korea and why it is different

K-Discovery in Korea is not a copy of U.S. discovery. It is narrower, more court-driven, and currently limited to civil damages claims involving the misappropriation of technical data under the Mutually Beneficial Cooperation Act. Even so, it is one of the most important procedural changes in Korean commercial litigation for companies whose value depends on manufacturing methods, source code, engineering drawings, prototypes, test data, and confidential supplier information.

The legal foundation starts with Article 25(2) of the Mutually Beneficial Cooperation Act, which prohibits a principal enterprise from unjustifiably misappropriating confidential technical data obtained from a subcontractor. Remedies and evidentiary procedures are connected to provisions including Articles 40-2, 40-3, 40-4, and 40-5 of the same Act, which address damages and the new evidence-gathering framework.

Before this reform, parties in Korean civil litigation relied mainly on targeted document production, court inquiries, witness examination, expert appraisal, and evidence preservation. Those tools still matter. For example, the Korean Civil Procedure Act allows document production orders in provisions such as Articles 343 and 344, while evidence preservation is addressed in Articles 375 through 384. However, these procedures often required the requesting party to identify the requested documents with considerable specificity.

That specificity requirement created a practical problem in technology disputes. A plaintiff might know that misuse occurred but not know the file name, server path, employee account, production batch record, or exact technical document showing the misconduct. In trade secret, software, semiconductor, battery, defense, robotics, and advanced manufacturing disputes, the proof may be embedded in systems controlled by the alleged wrongdoer.

K-Discovery is designed to narrow that gap. It gives Korean courts a more active role in locating and preserving evidence where technical data misappropriation is alleged. The system is still not as broad as U.S. Federal Rule of Civil Procedure discovery, but it materially changes leverage, risk, and preparation.

K-Discovery in Korea through court-appointed expert inspections

The most significant feature of K-Discovery in Korea is the possibility of a court-appointed expert inspection. Once a damages claim for technology data misappropriation has been filed, a party may apply for the court to appoint one or more experts to obtain evidence needed to prove the misappropriation or quantify damages.

The expert's role may include on-site inspections, questioning relevant personnel, reviewing and copying documents, and conducting technical tests or measurements. In practical terms, that could mean inspecting production lines, reviewing electronic files, comparing engineering drawings, checking software logs, examining research notebooks, or testing whether equipment implements the disputed know-how.

This is different from U.S.-style discovery. In the United States, counsel usually drives discovery through document requests, interrogatories, depositions, subpoenas, and negotiated protective orders, with the court intervening when disputes arise. Under the Korean model, the court remains central. The expert operates under a court order, within a defined scope, and under court supervision.

The expert team must include at least one qualified attorney and may include technical court officers, investigators, patent attorneys, specialist advisors, or other professionals designated under Supreme Court rules. This mixed legal and technical composition is important because many technology disputes turn on whether a product, process, or code base reflects confidential information obtained through a business relationship.

Foreign companies should assume that expert inspection requests will be highly contested. A well-prepared application should identify the technical data, explain why the opposing party controls the evidence, and connect the requested inspection to specific elements of liability and damages.

A hypothetical example makes the point. A U.S. robotics company shares motor-control algorithms with a Korean manufacturer under a supply development agreement. After termination, the manufacturer sells a similar robot through an affiliate. The foreign company may not know the exact source-code repository or test report to request. Under K-Discovery, it may seek an expert inspection of relevant servers, design records, and testing equipment to determine whether the protected algorithm was used.

Evidence preservation orders and litigation holds

K-Discovery also introduces stronger evidence preservation tools. Where a damages claim has been filed or is reasonably anticipated, a party may apply for a court order preserving relevant evidence. The order may remain effective for up to one year and may be extended for an additional year.

This is important because technology evidence can disappear quickly. Source code can be overwritten, logs can rotate, collaboration tools can purge messages, factory settings can change, and employee devices can be replaced. In a fast-moving supply chain dispute, waiting until the main lawsuit reaches the evidence stage may be too late.

Before issuing a preservation order, the court must give the custodian an opportunity to be heard and may require the applicant to post security. This security requirement matters for foreign plaintiffs. If a U.S., European, Singaporean, or Japanese company seeks a preservation order against a Korean counterparty, it should be ready to explain urgency, proportionality, and the specific categories of evidence at risk.

The amendments also address electronic evidence that must be updated for ordinary business reasons. If preserved materials exist in electronic form and operational updates are necessary, the custodian may copy the materials in their current state, submit the copy to the court, and then proceed with legitimate updates. That mechanism reflects the reality that production systems cannot always be frozen without harming ongoing business.

Non-compliance has real consequences. Refusing or obstructing an expert inspection may lead to adverse inferences and administrative fines. Public reports describe potential corporate fines of up to roughly USD 73,000 and individual officer or employee fines of up to roughly USD 36,000, depending on exchange rates. Intentional destruction of materials subject to a preservation order may trigger criminal exposure, including imprisonment and fines of up to roughly USD 73,000.

Foreign companies operating in Korea should therefore adopt litigation hold procedures before a dispute escalates. A litigation hold should identify custodians, preserve email and messaging records, suspend deletion schedules, image key repositories, and document who controls relevant servers or devices. Korean subsidiaries should coordinate with headquarters early, especially where evidence is stored across Korea and another jurisdiction.

Party examination and witness preparation

The third major feature is party examination. In technology data misappropriation damages litigation, courts may order the examination of relevant individuals to verify facts or materials needed to prove liability or damages. The procedure may cover parties, employees, and potentially third parties with relevant knowledge.

Examinations are recorded by audio or video, and court clerks prepare summary records. The recordings and transcripts may later be submitted as evidence. Although this procedure is not the same as a U.S. deposition, foreign companies should treat it as a serious testimony event that requires preparation.

The examinee may be required to take an oath. False statements by a witness who has taken an oath can lead to criminal penalties, including imprisonment of up to three years or fines of up to roughly USD 7,300. Obstruction may also support adverse inferences.

For foreign executives, this creates two practical concerns. First, Korean litigation teams must identify the right witnesses early. The key person may be an engineer, quality-control manager, procurement employee, local R&D lead, or former project manager rather than a senior executive.

Second, testimony must be coordinated with documents. Before any party examination, counsel should build a chronology, review the relevant technical data, map custody of the information, and prepare the witness to explain both legal and technical context clearly.

Foreign companies should also plan for language issues. Korean courts generally proceed in Korean, and documents in English, Japanese, Chinese, German, or French may require translation. If the technical team uses English internally but the Korean subsidiary communicates with suppliers in Korean, inconsistent terminology can become a litigation problem. Glossaries and bilingual document maps are often worth preparing before the evidence phase begins.

Privilege, confidentiality, and trade secret controls

K-Discovery raises an obvious concern: what happens if the requested evidence includes privileged communications, unrelated trade secrets, customer data, source code, or commercially sensitive pricing information? The amended framework recognizes that evidence gathering must be balanced against confidentiality and privilege.

Public summaries of the 2026 amendments state that attorney-client privileged communications are excluded from expert inspection and examination. This is especially notable because Korea has also moved toward statutory recognition of attorney-client privilege through amendments to the Attorney-at-Law Act, expected to take effect after a transition period. Foreign companies should not assume, however, that privilege operates exactly as it does in Delaware, New York, England, Singapore, or Hong Kong.

Privilege planning should be practical. Separate legal advice from ordinary business communications. Mark legal communications accurately, but do not overuse labels. Keep counsel-directed investigations organized. Avoid mixing technical analysis, business strategy, and legal advice in the same casual chat thread where possible.

Trade secret protection also requires advance work. Courts may restrict access to inspection reports containing trade secrets so that only counsel can review them, similar in function to an attorney's-eyes-only arrangement in U.S. litigation. For this protection to work, the responding party should be able to explain what information is confidential, how it is stored, who has access, and why broader disclosure would cause competitive harm.

A Korean subsidiary that has no document classification system, no trade secret register, no access controls, and no record of confidentiality training will have a weaker confidentiality argument. By contrast, a company that can show clear internal controls is better positioned to request narrowed inspection scope, staged review, redaction, counsel-only access, or technical protocols for handling source code and production data.

Data privacy should also be considered. If inspection materials include employee personal data, customer information, or cross-border data transfers, the Personal Information Protection Act may become relevant. Litigation teams should coordinate privacy review without using privacy as a blanket excuse to obstruct a valid court order.

How foreign companies should adjust litigation strategy

For plaintiffs, the new system can improve leverage. A foreign company that previously hesitated to sue because the best evidence was inside the Korean counterparty's premises may now have a more realistic route to proof. The complaint and early motion practice should be drafted with K-Discovery in mind, identifying the technical data, the relationship through which it was shared, the suspected misuse, and the categories of evidence that can verify the claim.

Plaintiffs should also preserve their own house. Korean courts may be less receptive to a party that aggressively seeks inspection while failing to preserve its own records. If the foreign company shared technical data through secure portals, email, cloud drives, engineering meetings, or prototype shipments, those records should be organized before filing.

For defendants, the message is different. A Korean company or foreign-invested Korean subsidiary accused of misappropriation should not wait for a court order to begin evidence governance. It should identify custodians, suspend deletion, preserve relevant systems, assess privilege, and prepare a technical explanation of independent development or lawful use.

A defendant should also consider whether the dispute can be narrowed through contract interpretation. Many technology relationships include non-disclosure agreements, joint development agreements, supply agreements, purchase orders, quality-control protocols, and license terms. The evidence dispute often turns on what information was actually protected, who received it, whether it was already known, and whether the accused product used the same technical solution.

For both sides, K-Discovery changes settlement dynamics. The risk of an on-site inspection, adverse inference, or preservation order may push parties toward earlier mediation. Korea already uses court-connected mediation in many civil cases, and technology disputes often settle when the parties understand what evidence will likely be exposed.

Practical takeaways for K-Discovery in Korea

Foreign companies should treat the 2026 amendments as a preparation window. The effective date may be in 2028, but the contracts, document systems, and trade secret controls that determine litigation outcomes are being created now.

Key action points include:

Map technical data flows before a dispute arises. Identify what know-how, drawings, source code, test data, and process information is shared with Korean partners.
Strengthen confidentiality clauses in NDAs, supply agreements, joint development agreements, and licensing contracts. Define technical data clearly and require return or deletion at termination.
Create a litigation hold playbook for Korean subsidiaries and joint ventures. Include email, messaging apps, cloud drives, local servers, employee devices, and factory systems.
Separate privileged legal advice from ordinary business discussion. Coordinate with Korean counsel before sensitive internal investigations.
Classify trade secrets and restrict access. Courts are more likely to protect information when the company can show consistent internal controls.
Prepare bilingual evidence maps for cross-border teams. Translate key technical terms consistently so that Korean pleadings, witness testimony, and expert review align.
Review insurance and indemnity provisions in technology contracts. Evidence disputes can be expensive even when the damages claim is resolved.

Conclusion

K-Discovery in Korea signals a shift in how Korean courts may handle technology-heavy commercial disputes. It remains narrower than U.S. discovery and currently focuses on technical data misappropriation claims under the Mutually Beneficial Cooperation Act. Still, expert inspections, preservation orders, and party examinations can materially change the balance of proof.

For foreign companies, the best response is not to wait until 2028. The right work begins now: cleaner contracts, stronger trade secret controls, better document retention, clearer privilege practices, and litigation-ready evidence maps.

Korea Business Hub assists foreign companies, investors, and headquarters teams with Korean commercial litigation, technology disputes, evidence strategy, and contract risk planning. If your Korean business relationship involves confidential know-how, supplier technology, or joint development, early preparation can determine whether the evidence helps you or hurts you when a dispute begins.

K-Discovery in Korea: Litigation Guide for Foreign Companies