Law Firm Roba and well-being, Counsel for defendant

Attorney Kim Jae-chul, Justice Kim Il-sung, and Justice Kim Ja-hee

Attorney Kim Young-young

2. C.

3. Stock companies D.

[Judgment of the court below]

[Judgment of the court below]

A. The Defendants jointly share KRW 100,000,000 for the Plaintiff and the remainder thereof:

1) For KRW 90,000,000, the interest rate of 5% per annum from March 7, 2015 to June 28, 2017, and 15% per annum from the next day to the day of full payment;

2) As regards KRW 10,000,000, each interest shall be paid 5% per annum from March 7, 2015 to May 2, 2019, and 15% per annum from the next day to the day of full payment.

B. The plaintiff's remaining claims against the defendants are dismissed.

2. Of the total litigation costs, 80% is borne by the Plaintiff, and the remainder is borne by the Defendants, respectively.

3. Paragraph 1(a) of this Article may be provisionally executed.

The Defendants jointly pay to the Plaintiff 508,382,809 won and the amount calculated by the rate of 5% per annum from March 7, 2015 to September 27, 2018, and 15% per annum from the next day to the day of complete payment (the Plaintiff extended the claim in this court).

2. Purport of appeal

A. The plaintiff: It shall be amended as stated in the judgment of the court of first instance (the plaintiff shall also be deemed to have changed the purport of appeal by expanding the claim in this court).

B. The Defendants: The part of the judgment of the court of first instance against the Defendants is revoked, and the Plaintiff’s claim corresponding to the revocation portion is dismissed.

The reasoning of this Court is that the reasoning of the judgment of the court of first instance is the same as that of the judgment of the court of first instance, and thus, this part is cited by the main text of Article 420

2. Determination as to the defendants' main defense

A. Summary of the defense

The plaintiff is a market-dominating business operator in the field of manufacturing technology of automobile wafers for automobile and filed the lawsuit of this case with a view to obstructing the entry into the market of the defendant company's automobile wafers. Thus, the filing of the lawsuit of this case constitutes abuse of rights.

B. Determination

The exercise of the right to a trial is also regulated by the principle of trust and good faith in order to protect the other party and secure judicial functions, and the exercise of the right to a lawsuit in violation of the good faith is prohibited (see, e.g., Supreme Court Decisions 82Meu1919, May 24, 1983; 98Da275, May 28, 199). However, as long as the right to a trial belongs to the fundamental right guaranteed by the Constitution, the right to a court’s trial shall be exercised with due care in determining that the filing of a lawsuit in order to realize the right under substantive law is abuse of the right to a lawsuit in violation of the good faith principle (see, e.g., Supreme Court Decision 2004Meu405, Jun. 2

As seen earlier, Defendant B and C removed the Plaintiff’s technical data, such as leculpe, on the Plaintiff’s automobile strawing product, without permission. As seen below, the above materials taken out by the Defendants are major business assets of the Plaintiff that are not disclosed to many and unspecified persons. As long as the Defendants’ act of illegally acquiring the above materials without permission and of manufacturing and selling the same product by utilizing them constitutes a tort, the Plaintiff’s seek compensation against the Defendants for damages arising therefrom is a legitimate act of which the law is intended. Unlike others, there is no evidence to deem that the motive or purpose of the Plaintiff’s filing of the lawsuit in this case is to prevent the Plaintiff from entering the Defendant company’s market as a market-dominating business operator, or that the lawsuit in this case was derived from the intent of abuse of power, because it merely prevents the Plaintiff from entering the Defendant company’s market, without any benefit.

The main defense of the Defendants is without merit.

3. Judgment on the merits

A. The plaintiff's assertion

1) Although Defendant B and C, even if they retire from the Plaintiff Company, has a duty to divulge data such as trade secrets that they came to know while on duty, or not to use them for their own interest or for a third party’s interest, in violation of this duty, Defendant B and C retired the Plaintiff Company, and shipped the Plaintiff Company into the Plaintiff Company without permission, and thereby establishing the Defendant Company by utilizing it, and committed a tort producing the same automobile strawls as that of the Plaintiff’s products.

2) Even if the Plaintiff’s automobile wafering technology does not constitute trade secret under the Unfair Competition Prevention Act, it constitutes a major business asset that was not disclosed to many unspecified persons and that was produced by the user with considerable time, effort and expenses, and thus, the Defendants’ act of manufacturing and selling identical products by using the Plaintiff’s technology taken out without permission constitutes tort.

3) The amount of damages suffered by the Plaintiff due to the Defendants’ tort shall be determined as “the amount calculated by multiplying the amount of damages per unit by the amount calculated by subtracting the quantity of the goods actually sold from the quantity of the goods that a person whose business interests were infringed could have produced, by the amount of damages per unit,” as set by the latter part of Article 14-2(1) of

However, the Plaintiff exclusively supplied F with the aforementioned products prior to the production and sale of an automobile string pipe which the Defendants stolen the Plaintiff’s technical data. Therefore, in the absence of the Defendants’ tort, the Plaintiff continued to supply the said products in proportion to the quantity of the products that the Defendants supplied to F. However, even if the Defendants supplied to F with the same product as the Plaintiff’s previous customer, the Plaintiff suffered a loss that the sales volume of the Plaintiff’s products reduced.

4) Therefore, the amount of damages that the Defendants are liable to compensate is 508,382,809 won [the total amount of products supplied by the Defendant Company to F from February 28, 2013 to June 29, 2018] calculated by multiplying the total amount of products supplied by the Defendant Company to F by the unit price of the Plaintiff’s supply and the Plaintiff’s operating profit rate of the Plaintiff’s 508,382,809 won [the total amount of products supplied by the Defendant Company to F from February 28, 2013 to June 29, 2018, 9,000 won per kilogram X Plaintiff’s operating profit rate of the Defendant Company X].

B. Determination as to whether to claim damages

1) The occurrence of damages claim

The reasoning for this part of this court is as stated in Article 420 of the Civil Procedure Act, since the part of the reasoning of the judgment of the court of first instance is identical to that of Article 4-1. A. (1) (2) (3) of the judgment of the court of first instance.

2) Determination as to the defendants' assertion

A) The assertion that the period during which the usefulness of the release data is maintained does not constitute a new tort for a year.

(1) Summary of the assertion

Since the confidentiality pledge prepared by Defendant B and C while working in the Plaintiff Company set a period of one year to restrict business start-up and employment by utilizing the information acquired by the Plaintiff Company after retirement, the period during which the said Defendants were recognized to be useful as technical data taken out shall be deemed one year. Therefore, it cannot be deemed that the said Defendants used the said data while developing a string system for automobiles at the expiration of four years after retirement, thereby constituting a new tort.

(2) Determination

The purpose of prohibiting infringement of trade secrets is to prevent an infringer from taking advantage of the superior position of fair competitors or time saving, and to enable the infringer to restore the trade secrets to the original location without such infringement. Thus, the prohibition of infringement of trade secrets shall be limited to the time limit necessary for ensuring fair and free competition and protecting the trust relationship between human beings. In determining such scope, the scope of infringement of trade secrets shall be reasonably determined based on the following: (a) the content and difficulty of the trade secrets; (b) the period required to obtain technological information; (c) the time required to maintain the trade secrets; (d) the time required for the infringer or other fair competitors to obtain such technical information in a lawful manner such as independent development or reverse design; (d) the time required for the infringer or other fair competitors to obtain such technical information; (e) the period when the infringer worked in relation to the employer; (e) the degree of access to the trade secrets; (e) the freedom of livelihood and occupation of the former employees; and (e) the freedom of intellectual property rights; and (e) the period of time required for disclosure and physical protection of the parties to 20.

In this case, regarding the Plaintiff’s technical information manufacturing technology, Defendant B and C, an employee of the Plaintiff, is considered to be prohibited from infringing time. Considering the contents and difficulty of the Plaintiff’s technical information, including the following circumstances acknowledged earlier and the evidence revealed by the aforementioned facts, the period during which Defendant B and C worked for the Plaintiff Company and its responsible duties and duties, and the size of the Plaintiff Company, it is reasonable to view the Defendants’ infringement prohibition period against the Plaintiff’s technical information to be up to five years after Defendant C and B retired from office until October 17, 2017 when the amount of five years after Defendant Company was established on October 17, 2012. Accordingly, it is reasonable to view that the Defendants’ act of producing and selling the same product during the above period as well as the Plaintiff’s act of removing the technical information, which is a major asset of the Plaintiff’s business, without permission, should not be permitted. The Defendant’s assertion and the Plaintiff’s assertion in excess of the above period are rejected.

① The Plaintiff’s technology of manufacturing strawing is not open to the public, and it is not easy for an enterprise possessing the manufacturing technology to develop the technology to the extent that it is not easy for the Plaintiff, including the Plaintiff.

② Although the Defendant Company, which only 3 researchers, could manufacture and sell the string machinery of vehicle type only within 4 months from the establishment of the Defendant Company, the Defendants did not submit materials to recognize that their development took special effort or cost, or that they had been developed independently from the establishment of the Defendant Company. Rather, Defendant C and B, as seen earlier, stated that Defendant C and B, as the Defendant Company’s case of occupational breach of trust, could make a prototype by using the Plaintiff Company’s leths, and by analyzing the above leths, he could have manufactured the product in a short period of time by improving the problems of the prototypes.

③ The first instance court accepted the Plaintiff’s application for appraisal in order to verify the identity of the automobile strawing products produced by the Plaintiff and the Defendant Company, and appointed an appraiser. However, in light of the circumstances where the first instance court failed to conduct appraisal on the grounds that it is impossible to measure the product’s composition and mixed ratio through the method of appraiser’s equipment analysis, etc., it is difficult to obtain the technical information by the method of reverse design.

④ Even if it is difficult to view the product of the Defendant Company as completely identical with the Plaintiff’s product, the Plaintiff’s product added several raw materials, which are similar to the Plaintiff’s product, and even if multiple kinds of raw materials are mixed at various rates, it shows the chemical analysis result similar to the Plaintiff’s product. Considering the Defendant Company’s human resources and material facilities, it is deemed that a considerable long-term period of time was required when the Defendant Company developed the same product based on its own or reverse design without any existing le

⑤ Although Defendant B and C set “a written pledge drawn up and delivered to the Plaintiff on August 16, 2004,” the said Defendants’ period of prohibition of occupational change is one year after retirement, as seen above, the Plaintiff’s technical information is not easy to acquire by a short-term independent development or a reverse design, and the prohibition of occupational change to the retired employee may directly affect his/her livelihood and freedom of occupation selection, etc., along with the circumstance that the Plaintiff’s technical information is not easy to acquire by a short-term independent development or reverse design, and that Defendant B and C establish the Defendant Company and produces the same product after a considerable period of time after retirement, it does not necessarily mean that the scope of time when the technical information, which is a major business asset, is protected, should be the same as

(6) However, it is difficult to view that the Plaintiff made considerable efforts to keep and manage the said Defendants confidential by taking security measures against the computers in which the data files on the technology of manufacturing motor vehicles are stored, or by making indications that the files, etc. can be perceived as confidential, in preparing and receiving the “written oath” against the said Defendants.

B) Defenses that the plaintiff's right to claim damages expired by prescription

(1) Summary of the defense

On September 30, 2008, Defendant B and C had already known the Plaintiff’s technical data, such as a motor vehicle wafer, taken out without permission, and the damages incurred therefrom. However, the Plaintiff filed the instant lawsuit only on December 24, 2014 after three years thereafter, and the Plaintiff’s claim for damages expired by prescription.

(2) Determination

"The date when the victim becomes aware of the damage and the perpetrator" under Article 766 (1) of the Civil Act, which is the starting point of calculating the short-term extinctive prescription of the claim for damages due to a tort, means the time when the victim knows the facts of the claim for damages, such as the occurrence of the damage, the existence of the illegal harmful act, the proximate causal relationship between the occurrence of the damage and the damage, etc., and the occurrence of the damage. Whether the victim, etc. is deemed to have actually and specifically perceived the facts of the claim for damages, should be reasonably recognized in consideration of various objective circumstances in each case and circumstances in which the claim for damages is practically possible (see, e.g., Supreme Court Decisions 98Da30735, Sept. 3, 199; 206Da30440, Apr. 24, 2008

In the instant case, Defendant B and C withdrawn from the Plaintiff Company without permission, and the Plaintiff filed a complaint against the said Defendants on August 30, 2013. The Defendants were convicted of occupational breach of trust on April 24, 2014, and the judgment became final and conclusive on November 14, 2014. It is deemed that the Defendants were aware of the fact that the Defendants were released from the Plaintiff’s technical data without permission at the time of retirement of Defendant B and C, and that the Defendants were released from the Plaintiff’s technical data, and that there was no other evidence to acknowledge otherwise. Rather, according to the above recognition, the Defendants were indicted on the charges of occupational breach of trust on November 14, 2014, and that the judgment became final and conclusive on November 14, 2014. However, it is insufficient to deem that the Defendants were aware of the fact that the Defendants were released from the Plaintiff’s technical data without permission at the time of retirement of Defendant B and C, and there was no other evidence to acknowledge that the Defendants were released on March 28, 201.

Therefore, insofar as it is evident that the instant lawsuit was filed on December 24, 2014 before the lapse of three years from the lawsuit, the said defense by the Defendants cannot be accepted.1)

C) Claim that the Plaintiff transferred the damage claim to a third party

(1) Summary of the assertion

On April 1, 2015, the Plaintiff transferred the damage claim against the Defendants relating to the instant case to K Co., Ltd., and thus, the Plaintiff’s claim is not permissible.

(2) Determination

Comprehensively taking account of the purport of Gap evidence 18-1 and 2 as a whole, it is recognized that K acquired from the plaintiff on April 1, 2015 all kinds of tangible and intangible rights related to the above business, including business rights, trademark rights, and various business related documents used or held in relation to the above business, while taking over the plaintiff's chemical business from the plaintiff on April 1, 2015.

However, according to the statements in Gap evidence Nos. 15 through 17 and 17, K Co., Ltd., on December 19, 2018, transferred the right to claim damages against the Defendants relating to the instant case to the Plaintiff again on December 19, 2018, and the notice of transfer reached the Defendant Co., Ltd. on December 24, 2018, and December 26, 2018.

Therefore, the Plaintiff, who once transferred the right to claim damages to K, has restored the right to claim damages against the Defendants. Ultimately, the Defendants’ above assertion is without merit.

C. Scope of liability for damages

1) Relevant legal principles

The profit gained by acquiring trade secrets, data, etc. (hereinafter referred to as "trade secrets, etc.") which are main business assets is the property value of trade secrets, etc.; property value is the difference between the reduced cost of technology development due to trade secrets, etc. and the reduced cost of products manufactured by other companies, such as competitors, etc., and the difference between the reduced cost of technology development due to the use of trade secrets, etc. and the difference between the sales profit of products where the production of products has not been provided. Furthermore, where it is extremely difficult to prove specific damages due to the nature of the case, even though the fact that damage was incurred in a claim for damages due to a tort lawsuit is recognized, the court may determine an amount deemed reasonable by taking into account all indirect facts related to the tort and its property damage, such as the relationship between the parties found by the results of examination of evidence and the purport of all pleadings, the circumstances leading up to the occurrence of property damage, the nature of damage, and various circumstances after the damage occurred (see, e.g., Supreme Court Decision 2014Da27425, Sept. 26, 2017).

2) Determination

A) The following circumstances can be acknowledged in light of the aforementioned facts and Gap evidence 3-28, 39, Gap evidence 10, 11, Gap evidence 12-1 through 16, Gap evidence 12-1 through 18, Eul evidence 13-1 through 18, and Eul evidence 2, the order to submit each of the documents to the director of the Ulsan District Tax Office at this court against the head of the Ulsan District Tax Office at this court, and the purport of the whole pleadings as to the first instance court and the F of this court's fact inquiry results.

① Prior to the Defendant Company’s production of the same kind of product, only three domestic manufacturers including the Plaintiff were in a market dominant position. Even according to the Defendants’ assertion, the Plaintiff’s market share in the Plaintiff’s product prior to the Defendant Company’s production of the same kind of product seems to reach a high level.

Therefore, if the Defendant Company did not deliver the same product to F, which is the Plaintiff’s existing principal transaction office, the Plaintiff could continue to supply the Plaintiff’s product to F. However, it would not be possible to supply the Plaintiff’s product due to the production and supply of the same product by the Defendant Company, and the Plaintiff’s interest was reduced. As can be seen, if the Defendants illegally acquired the Plaintiff’s technical data and sold the same product to F by utilizing it, thereby reducing the Plaintiff’s interest, it should be deemed as a property damage in proximate causal relation with the Defendants’ tort that infringed the Plaintiff’s technical data.

② If the Plaintiff’s competitor, such as the Defendant Company, acquires and uses Plaintiff’s technical data without permission, he/she appears to have obtained competitive benefits, such as reducing expenses incurred in developing technology. However, it is difficult to calculate the price by nature because such technical data are not traded separately.

③ In addition, each statement of profit and loss analysis (No. 10, No. 11, No. 12-16) presented on the ground that the Plaintiff’s operating profit ratio of the Plaintiff’s products supplied to F constituted 14.77% and should be the basis for calculating the amount of damages. It is nothing more than the original basic material that directly supports the transaction, such as transaction statement or tax invoice with F, but the output of the Plaintiff’s employee’s input, and there is a considerable difference between the monthly profit ratio and the monthly profit ratio. In addition, even if there are differences between the monthly sales, the specific sales volume of each item are entirely identical, or a large change is discovered compared to the immediately preceding month, it is difficult to find that the Plaintiff’s assertion based on the above materials is an objective or reasonable standard for recognizing the Plaintiff’s amount of damages. Furthermore, it is difficult to ascertain how the Plaintiff’s previous sales or profit accrued before and after the reduction of the Plaintiff’s previous sales of the same product.

Ultimately, as long as it is difficult to specifically verify the Plaintiff’s sales or profits accrued therefrom due to the Defendants’ tort, it is difficult to calculate the amount of damages sustained by the Plaintiff.

④ Meanwhile, the Defendant Company’s sales of automobile wafers to F are two types of product name I and L. The period from February 28, 2013, when the Defendant Company commenced to manufacture and sell the said product to October 31, 2017, i.e., the sales amount of the said product supplied to F during the period from October 31, 2017, i.e., the sum of KRW 3,36,658,226 (=the sum of supply values of I + KRW 1,783,223,456 + the sum of supply values of L + KRW 1,583,434,70).

⑤ At the investigative agency, Defendant B stated to the effect that even if the Defendant Company supplied KRW 9,800 per kggs (motor vehicle wafers) to KRW 9,800, the Defendant Company supplied the product to F, it would have obtained at least 10-15% net profit out of the price of the product supplied to F. According to this, the Defendant Company appears to have obtained at least 10% net profit of the product supplied to F.

6. However, as seen earlier, it is difficult to understand whether the product of the same kind produced by the Defendant Company is the same as the product produced by the Plaintiff, and there is also a lack of data to estimate the similar degree, while the Defendant Company registered a patent related to the de-rating mechanism for automobiles, and the Defendant Company sent the first instance court’s fact inquiry to the effect that “F applied the Defendant Company’s co-rating product to the highest extent.”

Therefore, although the Defendant Company utilized technical data such as the Plaintiff’s leths, it is reasonable to view that the product produced by the Defendant Company was more improved than the Plaintiff’s product. As such, it is difficult to view that the profit gained by the Defendant Company from the supply of the same product to F is equivalent to the Plaintiff’s profit decrease portion after the supply of the same product as the Defendant Company’s product, or that it is in proximate causal relation with the Defendants’ tort committed by the Defendants who illegally acquired and used the Plaintiff’s technical data. In contrast, there is no data to determine how much the technical power of the Defendant Company was reflected in the product of the same kind produced by the Defendant Company, or how much difference exists from the Plaintiff’s technical data to the reduction of expenses incurred in developing the Defendant Company’s technology due to the Defendant Company’

B) In light of the aforementioned legal principles, in the instant case where it is extremely difficult to prove the Plaintiff’s specific amount of damages due to the Defendants’ tort in light of the nature of the case, the amount of damages that the Defendants are liable to compensate the Plaintiff as an economic value of the Plaintiff’s technical data acquired unlawfully by the Defendants, in full view of such circumstances as well as the relationship between the Plaintiff and the Defendants, the background leading up to the Defendants’ tort and property damage therefrom, the nature of damages, and various circumstances after the damage was incurred, is reasonable to determine the amount of damages that the Defendants are liable to compensate for as the economic value of the Plaintiff’s technical data acquired by the Defendants to F during the prohibition period of the infringement as KRW 10 million equivalent to the minimum amount of net profit (3% per cent

D. Sub-committee

Therefore, with respect to the Plaintiff’s KRW 10 million and the amount of KRW 90 million cited in the first instance trial, the Defendants jointly pay to the Plaintiff 5% per annum as stipulated in the Civil Act from March 7, 2015 to June 28, 2017, which is the date of the first instance judgment, which is deemed reasonable to dispute over the existence or scope of the Defendants’ obligation to perform from March 7, 2015, and damages for delay calculated at the rate of 15% per annum as stipulated in the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings from the next day to the date of complete payment; and 20 million additionally accepted by this court, after the date of tort, the Defendants are liable to pay damages for delay calculated at the rate of 5% per annum as stipulated in the Civil Act from May 2, 2019 to the date of this judgment, which is deemed reasonable to dispute over the existence or scope of the Defendants’ obligation to perform.

4. Conclusion

Thus, the plaintiff's claim against the defendants shall be accepted within the scope of the above recognition, and the remaining claim shall be dismissed as it is without merit. Since the judgment of the court of first instance is partially unfair with the conclusion, the plaintiff's appeal shall be partially accepted and the judgment of the court of first instance shall be modified as above.

Judges Choi Jin-hee

Judges Choi Jae-hwan