1. Judgment on the Defendants’ grounds of appeal

A. Obstruction of business

Of the facts charged against the Defendants, the lower court found the Defendants guilty on the following grounds: (a) as the wholesale store computer system of Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) was used solely for Nonindicted Co. 1’s business operations, not for a system used for the sole purpose of Nonindicted Co. 1’s business operations; and (b) the Defendants’ act of blocking access to the wholesale store computer system in collusion with Nonindicted Co. 2, etc., in collusion with the representative director, constitutes an act of obstructing the victims’ work by force; and (c) the legitimacy of preventing abuse of the said wholesale store computer system alleged by the Defendants cannot be recognized. Examining the reasoning of the lower judgment in light of relevant legal principles and evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on “competion, etc.” in the crime of interference with business.

B. Violation of the Unfair Competition Prevention and Trade Secret Protection Act (Leakage of trade secrets, etc.)

1) According to the reasoning of the lower judgment, the lower court affirmed the first instance judgment convicting the Defendants of violation of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Competition Prevention Act”), among the facts charged against the Defendants, of business information, which was kept confidential by considerable efforts, including transaction partners information, sales information, gold information, specific transaction terms, etc. (hereinafter “instant information”) that was entered in the instant wholesale store computer system, has independent economic value, and has been maintained secret by considerable effort. The lower court affirmed the first instance judgment that convicted the Defendants of the violation of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Prevention Act, etc.”) among the facts charged against the Defendants.

2) However, it is difficult to accept such determination by the lower court for the following reasons.

A) The term “trade secret” under Article 2 subparag. 2 of the former Unfair Competition Prevention Act refers to any production method, sale method, and other technical or managerial information useful for business activities, which is not known to the public and has independent economic value (see, e.g., Supreme Court Decision 98Do4704, Mar. 12, 199). Here, “a secret maintained by considerable effort” refers to a situation in which it is recognizable that information is maintained and managed in an objective manner, such as setting up a mark or notifying that the information is confidential, imposing restrictions on access to the information, or duty to keep confidential on the person who has access to the information, and imposing a duty to maintain confidential information on the person who has access to the information, etc. (see, e.g., Supreme Court Decision 2008Do3435, Jul. 10, 2008). Whether an effort to maintain and manage such information was reasonable should comprehensively take into account the details of preventive measures taken by the person holding the trade secret, the need to permit access to the relevant information, the economic size and economic value of the person holding.

B) According to the evidence duly admitted by the lower court, the following facts are revealed.

① In lieu of granting exclusive sales rights to a certain area to wholesale stores holding a specific liquor license every year, Nonindicted Co. 1 has handled only the products of Nonindicted Co. 1. Of the sales of Nonindicted Co. 1, the ratio of sales through wholesale stores is about 60%.

② The wholesale store managers had been individually managing and utilizing transaction information, etc. with the previous clients through personal computers (PCs) or books. Nonindicted Company 1 established the instant wholesale store computer system at their own expense in order to efficiently manage and utilize information, etc. on the clients that are traded by the wholesale store around 2002, and the wholesale store managers entered the instant information, etc. related to the clients that handle Nonindicted Company 1’s products through a portable device (PDA) or personal computer.

③ The instant information entered by the wholesale store managers was stored in the server owned and managed by Nonindicted Company 1, and Nonindicted Company 1 also used the instant information for business purposes, when it was necessary to establish a business plan, set sales targets by retail stores, and manage inventory, etc. The sales of the wholesale stores directly affect the sales of Nonindicted Company 1. As such, Nonindicted Company 1 subsidized the sales promotional event expenses, etc. of the wholesale stores, which are customers of the wholesale stores, for each wholesale store. In addition, Nonindicted Company 1 assessed the sales rate, sales increase, promotional performance, etc. by its own wholesale store through the instant information, etc., and paid rewards and advertising expenses, etc. to the wholesale stores. Although Nonindicted Company 1 was aware of the fact that the wholesale store managers are using the instant information, etc., the wholesale store managers were also conducting business normally without raising any objection for 6 to 7 years prior to the occurrence of the instant problem. The instant information entered by the wholesale store managers and Nonindicted Company 1 did not have any confidentiality agreement with the wholesale store managers.

④ Employees in charge of the management of the wholesale stores among the employees of Nonindicted Company 1 are allowed to peruse only the information entered by the wholesale stores within their business scope. However, employees of the sales headquarters of Nonindicted Company 1 who maintained and managed the instant wholesale store computer system may view the instant information without particular security procedures. The wholesale store managers set a password according to their respective IDs in the instant wholesale store computer system, but they also requested Nonindicted Company 1’s business employees who manage their own wholesale stores for business convenience to notify the said ID and passwords and to make orders for goods instead.

⑤ The instant information has been jointly utilized by the wholesale store managers and Nonindicted Company 1 while the wholesale store managers continued to engage in the business after being granted liquor sales rights to their jurisdiction by Nonindicted Company 1. The wholesale store managers whose transaction relationship with Nonindicted Company 1 was terminated are not able to utilize the instant information. Nonindicted Company 1 entered into a contract with the wholesale store managers by adding to the following: “The wholesale store managers provide the portal system to the wholesale store free of charge, and ownership of various data generated while the wholesale store uses the portal system shall be owned by Nonindicted Company 1 and owned by Nonindicted Company 1 after the termination of the contract” in Article 14(2) of the newly revised wholesale store contract around May 2010.

C) Examining these circumstances in light of the legal principles as seen earlier, it is difficult to view that the wholesale store manager intended to maintain and manage the instant information inasmuch as it did not raise any objection even though Nonindicted Company 1 was aware of the management of the instant information through the instant wholesale store computer system. Since the wholesale store manager can be deemed to have actually delegated the management of the instant wholesale store computer system to Nonindicted Company 1, if the third party collected and used the instant information without permission, the trade secret violation may be established by deeming the efforts of Nonindicted Company 1 as the owner of the trade secret, but it is difficult to recognize the secrecy management in relation to the relationship between Nonindicted Company 1 and its employees. Moreover, it is difficult to view that the wholesale store manager and its employees took measures such as preventing access to the instant information by Nonindicted Company 1 and its employees, and it is difficult to view the Defendants’ “the instant information is maintained and managed as confidential by the wholesale store manager” in itself to view the instant information as the owner of the instant sales store’s identity and password, but it is difficult to view the Defendants’ basic business information management relationship with the instant wholesale store manager.

3) Nevertheless, the lower court determined that the instant information constitutes a trade secret under Article 2 subparag. 2 of the former Unfair Competition Prevention Act, and found the Defendants guilty of violating the Unfair Competition Prevention Act among the facts charged against the Defendants. In so determining, the lower court erred by misapprehending the legal doctrine on “trade secret” under Article 2 subparag. 2 of the former Unfair Competition Prevention Act, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds

2. Judgment on the grounds of appeal by the prosecutor

For the reasons indicated in its holding, the lower court reversed the first instance judgment convicting Defendants on charges of interference with business due to the termination of unilateral contracts, the establishment of unilateral sales target and the reduction of significant quantity supply, on the grounds that there is no proof of crime. Examining the reasoning of the lower judgment in light of relevant legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on “de

3. Scope of reversal

For the foregoing reason, the part of the lower judgment against the Unfair Competition Prevention Act (Leakage of trade secrets, etc.) should be reversed. The lower court rendered a single sentence on the ground that the facts constituting a crime interfering with business with this part constitute concurrent crimes under the former part of Article 37 of the Criminal Act. Therefore, the part of

4. Conclusion

Therefore, the conviction part of the judgment below is reversed, and that part is remanded to the court below for further proceedings consistent with this Opinion. The prosecutor's appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench

Justices Jo Hee-de (Presiding Justice)