Breach of Law (Leakage of Business Secrets, etc.) and Occupational Breach of Trust

Attorney in charge C, D, BE, BF

2. Seoul Central District Court Decision 2013Ma7246 decided October 7, 2014

A defendant shall be punished by imprisonment for not less than eight months and by a fine not exceeding fifteen thousand won.

When the defendant fails to pay the above fine, the defendant shall be confined in a workhouse for the period converted into one day.

except that the execution of the above imprisonment shall be suspended for two years from the date this judgment becomes final and conclusive.

The provisional payment of the amount equivalent to the above fine shall be ordered.

Seized evidence 2 to 5 each shall be confiscated.

A. Defendant

1) misunderstanding of facts and misapprehension of legal principles

① With respect to the violation of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Competition Prevention and Trade Secret Protection Act”), JB.xlsx files acquired by the Defendant from K that was retired from F (hereinafter “victim”) are practically published materials and have not been managed as trade secrets by considerable effort of the Victim Company. Accordingly, the files do not constitute trade secrets under the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Competition Prevention and Trade Secret Protection Act”).

② With respect to the point of occupational breach of trust in the holding of the first instance court, the files in the holding of the first instance court are virtually disclosed, and there is no economic value or extremely low since they are not materials from the victim company into considerable time, effort and expenses. Therefore, the Defendant’s acquisition of the said files cannot be deemed as a major business asset to the extent that he may gain competitive benefits through the use of the said files.

③ As to the point of occupational breach of trust as stated in the judgment of the court below, the Defendant provided personal counseling or advice to students and received money as a case for such counseling or advice, and did not receive the above money as a consultation fee. Even if the above money is a consultation fee on studying abroad, this should eventually be attributed to the Defendant, and there is no damage to the victim company.

2) Unreasonable sentencing

Each sentence of the lower court (the first instance court: the imprisonment of August and the second instance court: the fine of KRW 15 million) is too unreasonable.

(b) Prosecutors;

1) misunderstanding of facts and misunderstanding of legal principles [Violation of the Unfair Competition Prevention and Trade Secret Protection Act (Disclosure of Business Secrets)]

In light of the fact that files that the court below decided that they are not trade secrets are trade secrets, such as making a confidentiality pledge and ethics pledge and allowing access to the files only through the company's internal computer and not allowing the company to take them out of the company, the files are trade secrets under Article 2 subparagraph 2 of the Unfair Competition Prevention Act. In light of the fact that the files are trade secrets under Article 2 subparagraph 2 of the same Act.

2) Unreasonable sentencing

The sentence of the second instance court is too unhued and unreasonable.

2. Determination:

A. Ex officio determination due to the consolidation of cases

ex officio, the first and second judgment against the defendant was rendered separately, and the defendant and the prosecutor filed each appeal against the first and second judgment, and this court decided to hold a joint trial against each appeal case. Since each of the crimes of the first and second judgment is concurrent crimes under the former part of Article 37 of the Criminal Act, one sentence should be imposed in accordance with Article 38(1) of the Criminal Act, the judgment of the court below against the defendant cannot be exempted from all reversal.

B. Judgment on the defendant's misconception of facts and misapprehension of legal principles

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

Comprehensively taking account of the following circumstances acknowledged by the evidence duly admitted and examined by the court below, the JDB.xlsx files acquired by the defendant from K and the J-Final.xlsx files created by transformation from the files constitute trade secrets as defined in the Unfair Competition Prevention Act, and this part of the defendant's assertion is without merit.

① In light of the motive and purpose that the aforementioned files were not known to the general public through publications, etc., and the Defendant obtained another channel, and the victim company was retired from K before approximately one year, it seems that the said files were difficult to obtain by means of a different way.

2. The above JDB.xlsx files are the customer information of the victim company containing 10,687 students' personal information and contact information and the victim company's contact information, and are essential data considering the characteristics of the victim company's study consulting companies, such as the victim company.

③ The victim company is separate from the operating server to manage the data server. The customer information DB data is stored in the above DB server, which can be accessed only when the access code is known, and the degree of the hardware manager was known in addition to K which was the person in charge of information and communication management.

(4) If an employee becomes a member after January 2012, the victim company is required to prepare a written pledge of confidentiality that includes his/her obligation to maintain confidentiality.

2) The point of occupational breach of trust as stated in the first instance judgment

If an employee of a company did not disclose to an unspecified number of unspecified persons even if he/she is not a trade secret, and the employer disclosed material corresponding to major business assets produced by using considerable time, effort and expenses to a competitor, or ships such material without permission for the purpose of using it for his/her own interest, it constitutes an occupational breach of trust (see Supreme Court Decisions 2004Do7962, Jul. 14, 2005; 2006Do9089, Apr. 24, 2008).

Comprehensively taking into account the following circumstances acknowledged by the evidence duly admitted and investigated by the court below, the annual student information list (06 ver.xls) file, 201 [Fall 2012] school support and pass-up status, 'xls' file, 'xls' file, 'xls + student + xls file, 'Fall 209-2012O.xlx' file (hereinafter collectively referred to as the "the files of this case") or information recorded therein are not trade secrets as defined in the Unfair Competition Prevention Act, but at least the victim company's major assets, and the defendant's intent of occupational breach of trust is recognized. Thus, this part of the defendant's assertion is without merit.

① Some of the instant files or information recorded therein appears to be able to individually verify the content through the Internet site, etc. However, the data created after selecting useful materials for the operation of a consulting company on studying abroad among such individual information is internally shared by the students inside the victim company only between the students who entered into a contract with the victim company and the victim company, and cannot be easily claimed without being disclosed to the public or via the victim company.

② The instant files and information recorded therein have been accumulated in the course of studying, consulting, etc. for several years by the victim company. As such, considerable time and effort was required for the creation of the files and information. Whether they are holding such files and information, and the content and contents thereof, diversity, originality, etc. are bound to affect the competition interests of the relevant study consulting company, including the business ability of the relevant study consulting company.

3) The point of occupational breach of trust as stated in the second instance judgment

With respect to the defendant's argument that the amount of money first received by the defendant is a honorarium for study and consulting provided by the victim company, it is unclear whether the defendant is provided under the premise to conclude a contract or not. It is not clear how the advice or consultation provided by the defendant to the student is distinguished from the amount provided by the victim company, and the defendant also has not been provided with an explanation. In light of the amount of money received by the defendant, it is difficult to regard the defendant as a simple case cost, and it appears to be a price for de facto consultation in lieu of consultation provided through regular paid consultation or contract, and it is not a mere one after the completion of all related procedures since the preparation of a written application for admission or entry confirmation is made. Although the defendant did not prepare an ethical pledge, he was well aware of the contents of the written ethical pledge, and he was asked for ethics consultation when hiring other contact, and the defendant also did not accept the defendant's claim that he was provided with an honorarium for personal compensation for the defendant's own reason that he was provided by the victim.

The second instance court rejected the Defendant’s assertion that the Defendant did not incur property damage to the victim company, on the premise that the contract had been maintained after concluding a plaque agreement or a fee consultation agreement with the victim company in order for the Defendant to pay the amount as performance-based bonus, etc. as alleged above. However, since the students who paid the amount did not conclude a plaque agreement from the beginning or cancel the agreement after concluding the agreement, the Defendant did not have any possibility of receiving performance-based bonuses, etc., the Defendant did not accept this part of the allegation on the ground that the Defendant’s offering of consulting, which should have been provided through a regular consulting program operated by the victim company, etc. without excluding the victim company, and the actual receipt of the price, should be deemed to have inflicted property gains and incurred the same amount to the victim company.

According to the records, since all of the above facts and circumstances recognized by the second court are recognized, such judgment of the second court is justifiable. Accordingly, the defendant's assertion on this part is without merit.

C. Judgment on the prosecutor's misconception of facts and misapprehension of legal principles

The term "trade secret" under Article 2 subparagraph 2 of the Unfair Competition Prevention Act means a state in which it is recognizable that information is maintained and managed as secret objectively, such as making production methods, selling methods, and other technical or managerial information useful for business activities, which is kept secret by considerable effort, and that "it is maintained secret by considerable effort" means any indication or notification that such information is secret, and imposing restrictions on access to such information or access methods or obligation to keep secret on persons who have access to such information, etc. (see, e.g., Supreme Court Decision 2008Do3435, Jul. 10, 2008).

The first instance court determined that each of the above files did not constitute trade secrets on the ground that the evidence submitted by the prosecutor alone was insufficient to recognize that the victim company maintained and managed the files of this case as trade secrets with considerable effort.

In light of the records, the judgment of the court below is just and there is no error of law by misunderstanding the legal principles. The circumstance asserted by the prosecutor in the grounds of appeal is limited to the duty of a victim company not to divulge trade secrets to its employees, and the evidence submitted by the prosecutor alone is insufficient to recognize that it was objectively recognizable that the victim company maintains and manages the information of this case as confidential information, such as classifying the file of this case as important or indicating it as confidential information. Accordingly, the prosecutor's assertion is without merit.

3. Conclusion

If so, the judgment of the court below is based on the grounds for ex officio reversal as seen earlier, and the decision of the court below is reversed in accordance with Article 364 (2) of the Criminal Procedure Act without examining the defendant and the prosecutor's allegation of unfair sentencing, and it is again decided as follows.

Criminal facts and summary of evidence

The summary of the facts constituting an offense and evidence recognized by this court is identical to each corresponding column of the judgment of the court below, and such facts are cited in accordance with Article 369 of the Criminal Procedure Act

Application of Statutes

1. Article applicable to criminal facts;

Article 18(2) of the former Unfair Competition Prevention and Trade Secret Protection Act (amended by Act No. 11963, Jul. 30, 2013); Articles 356, 355(2), and 30 of the Criminal Act (amended by Act No. 11963, Jul. 30, 201); Articles 356 and 355(2) of the Criminal Act (amended by Act No. 11963)

1. Commercial competition;

Articles 40 and 50 of the Criminal Act (the crime of occupational breach of trust due to the violation of the Unfair Competition Prevention and Trade Secret Protection Act and the divulgence of important assets for business purpose)

1. Selection of punishment;

As to the crime of occupational breach of trust in the judgment of the court below, each choice of imprisonment and fine for the crime of occupational breach of trust in the judgment of the court below

1. Aggravation for concurrent crimes;

Articles 37 (former part), 38 (1) 3, and 50 of the Criminal Act

1. Detention in a workhouse;

Articles 70(1) and 69(2) of the Criminal Act

1. Confiscation;

Article 48(1) of the Criminal Act

Reasons for sentencing

The nature of the crime of this case is not easy for the defendant to commit the crime of this case, such as holding a presentation session on studying abroad using information acquired immediately after retirement from the victim company, and holding a personal gain of property acquired by the defendant as much as 36 million won.

However, the Defendant is an initial offender with no criminal history, and the Defendant appears to have contributed to increasing the business performance of the victim company while working in the victim company for several years. Although the Defendant did not reach an agreement, he/she made efforts to repay damage by depositing a total of KRW 160 million for the victim company in the first time, and then he/she made efforts to pay damage by taking account of various sentencing factors recorded in the records, such as the Defendant’s age, character and conduct, environment, and circumstances before and after the crime, etc., the sentence against the above Defendant shall be determined as ordered.

Parts of innocence

1. Summary of the facts charged

On May 14, 2012, at around 09:39, the Defendant acquired, by means of e-mail, “the student information,” annual student information, list (06-N.xs), and “2011 (Fall 2012) school support and passing status.xls,” which is a trade secret of the victimized enterprise, from N around 10:30 on May 14, 2012, the Defendant acquired, by means of e-mail, “the passing period, + student status,.xlxs,” which is a trade secret of the victimized enterprise, from N to the e-mail transmission from N around 11:40 on May 31, 2012.

Accordingly, the defendant acquired the above data, which is a trade secret useful to the damaged enterprise, in order to obtain improper profits or to inflict damage on the damaged enterprise.

2. Determination

As seen above 2-C., not guilty should be pronounced in accordance with the latter part of Article 325 of the Criminal Procedure Act because there is no proof of crime as seen above 2-C. However, as long as the court found the defendant guilty of a crime of occupational breach of trust due to the divulgence of important assets for business purpose in the holding that there is an ordinary

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