1. Determination on the grounds of appeal on the violation of the Unfair Competition Prevention and Trade Secret Protection Act (Leakage of trade secrets, etc.) by Defendants 1, 2, and 3

A. The lower court affirmed the first instance judgment convicting Defendant 1, 2, and 3 of violating the former Unfair Competition Prevention and Trade Secret Protection Act among the facts charged against Defendant 1, 2, and 3, on the ground that the transaction information, sales information, receipts, and specific transaction terms, etc. (hereinafter “the instant information”) included in the instant wholesale store computer system are not known publicly, have independent economic value, and management information maintained in secret by considerable effort is deemed to constitute “trade secret” under Article 2 subparag. 2 of the former Unfair Competition Prevention and Trade Secret Protection Act (amended by Act No. 11963, Jul. 30, 2013; hereinafter “former Unfair Competition Prevention Act”).

B. However, we cannot accept the judgment of the court below for the following reasons.

(1) The term “trade secret” under Article 2 subparag. 2 of the former Unfair Competition Prevention Act means any production method, sale method, and other technical or managerial information useful for business activities, which are not known to the public, and have independent economic value (see, e.g., Supreme Court Decision 98Do4704, Mar. 12, 199). Here, the term “a secret maintained by considerable effort” means a situation where it is recognizable that information is maintained and managed in an objective manner, such as: (a) a mark or notification that may be perceived as confidential; (b) a person who may access the information or a person who has access to the information, or a person who has access to the information, has a duty to keep confidential information (see, e.g., Supreme Court Decision 2008Do3435, Jul. 10, 2008). The considerable effort to maintain and manage such information ought to be comprehensively taken into account the details of preventive measures taken by the holder of the relevant trade secret; (c) a person who has access to the relevant information; (d) the economic size and economic value of the owner.

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

(A) Defendant 4 Co., Ltd. (hereinafter “Defendant Co., Ltd”) handled only the products of Defendant Co., Ltd, instead of granting exclusive sales rights to a certain area on a yearly basis with a specific alcoholic beverage license and a single-year basis. The sales volume of Defendant Co., Ltd’s sales through wholesale stores is approximately 60%.

(B) The wholesale store managers separately managed and utilized transaction information with the previous clients through personal computers (PC) or books. The Defendant Company established the instant wholesale store computer system at its own expense in order to efficiently manage and utilize the information on the customer that the wholesale store deals with, and the wholesale store managers entered the instant information related to the customer who handles the Defendant Company’s products through a portable device (PDA) or personal computer.

(C) The instant information entered by the head of the wholesale store as above was stored in the server owned and managed by the Defendant Company, and the Defendant Company also used the instant information for business operations when necessary for the establishment of a business plan, the setting of sales target by retail store, inventory management, etc. The sales of the wholesale store directly affected the Defendant Company’s sales. As such, the Defendant Company subsidized the sales promotion event cost against restaurants, retail stores, etc., which are customers of the wholesale store. Furthermore, the Defendant Company assessed sales and sales increase rate by wholesale store, promotional performance, etc. using the instant information, and paid rewards and advertising expenses to the wholesale store by itself. The wholesale store managers knew of the fact that the Defendant Company is using the instant information, but were normally operated 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 did not have concluded a confidentiality agreement with the wholesale store manager and the Defendant Company.

(D) The employees in charge of the management of the wholesale store among the employees of the Defendant Company may peruse only the information entered by the wholesale store within the scope of their business, but the employees of the Defendant Company, who maintained and managed the instant wholesale store computer system, can see the instant information and no particular security procedure was established. The wholesale store managers set a password according to their respective IDs in the instant wholesale store computer system, but requested the employees of the Defendant Company, who manage their own wholesale store, to notify the said ID and passwords to the employees of the Defendant Company, and to make orders for the goods instead of notifying them of the said ID and passwords.

(E) The instant information was jointly utilized by the wholesale store owners and the Defendant company while the transactional relationship is continued as the wholesale store managers came to know in the course of running the business after obtaining a liquor sales license from the Defendant company. The wholesale store managers whose transaction relationship with the Defendant company is terminated may not utilize the instant information. The Defendant company entered into a contract with the wholesale store managers by adding to Article 14(2) of the newly revised wholesale store contract around May 2010, “The Defendant company provided the portal system to the wholesale store free of charge, and ownership of various data generated in the course of using the portal system shall be owned by the Defendant company and the wholesale store during the contract period, and shall be owned by the Defendant company after the contract period.”

(3) 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 despite the recognition of the Defendant Company’s management of the instant information through the instant wholesale store computer system. Since the wholesale store manager may be deemed to have actually delegated the management of the instant wholesale store computer system to the Defendant Company, if the third party collected and used the instant information without permission, it may be recognized that the Defendant Company’s efforts to manage confidential information may be deemed as the owner of trade secrets’ efforts, but it is difficult to recognize confidentiality in relation to the relationship between the Defendant Company and its employees. Moreover, the wholesale store manager cannot be deemed to have taken measures such as preventing the Defendant Company and its employees from accessing the instant information, and it is difficult to recognize the fact that “the instant information is maintained and managed as confidential by the wholesale store manager,” and the wholesale store manager cannot be viewed as the owner of the instant business information, which is the basic measures to prevent the Defendant Company from entering the instant information with respect to the instant wholesale store manager’s business information.

C. Nevertheless, the lower court determined that the instant information constitutes trade secrets under Article 2 subparag. 2 of the former Unfair Competition Prevention Act, and upheld the first instance judgment convicting Defendants 1, 2, and 3 of the charges of violating the former Unfair Competition Prevention Act. In so determining, the lower court erred by misapprehending the legal doctrine on trade secrets under the former Unfair Competition Prevention Act, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal

2. Determination as to the remaining grounds of appeal by Defendants 1, 2, and 3 and the grounds of appeal by the Defendant Company

The lower court convicted Defendants 1, 2, and 3 of interference with business due to blocking access to the computerized system of ○○, △△△△, △△△△, and △△ also, and of violation of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) against the Defendants. Examining the reasoning of the lower judgment in light of relevant legal principles and evidence duly admitted, the lower court did not err by failing to exhaust all necessary deliberations, 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 the crime of interference with business by exceeding the bounds of the logical and empirical rules

3. Judgment on the grounds of appeal by the prosecutor

A. The lower court acquitted Defendants 1, 2, and 3 on the part regarding the obstruction of business (excluding the part on conviction) on the ground that there was no proof of crime. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment 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

B. Of the facts charged against the Defendant Company, the lower court upheld the first instance judgment that acquitted the Defendant Company on the ground that there is insufficient evidence to acknowledge property benefits arising from infringement of trade secrets. 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

4. Scope of reversal

For the foregoing reason, the part of the lower judgment against Defendants 1, 2, and 3 in violation of the former Unfair Competition Prevention Act should be reversed. However, the part on the reversal is in a concurrent relationship with the remaining guilty part against the above Defendants under the former part of Article 37 of the Criminal Act, and thus, one sentence should be imposed on all of them. Meanwhile, the part on the remaining guilty part of the lower judgment and the part on the acquittal of the reason for obstruction of business affairs related to commercial concurrence. Accordingly, the part on the guilty of the above Defendants (including the part on innocence in the

5. Conclusion

Of the judgment of the court below, the guilty part against the defendant 1, 2, and 3 (including the acquittal part in the grounds) is reversed, and this part of the case is remanded to the court below for a new trial and determination. The appeal by the defendant company and the prosecutor is dismissed in its entirety as it is without merit. It is so decided as per Disposition by the assent of

Justices Lee Dong-won (Presiding Justice)