[1] The purpose of prohibiting infringement of trade secrets and the standard for determining the prohibition period

[2] Whether the period of trade secret protection can be extended according to the circumstances (negative)

[1] The purpose of prohibiting infringement of trade secrets is to prevent an infringer from taking unfair advantage of the position superior to that of fair competitors or time saving by the act of infringement, and to enable the infringer to return the trade secrets to the original location without such infringement. Thus, the prohibition of infringement of trade secrets shall be limited to time within the necessary scope in order to ensure fair and free competition and to achieve the purpose of protecting personal trust relationship. In determining the scope, the scope of infringement of trade secrets should be reasonably compared to the contents and difficulty of the trade secrets, the period and expenses required to obtain technological information by the holder of trade secrets, the period and expenses required to maintain the trade secrets, the effort and method to endeavor to maintain the trade secrets, the time required for the infringer or other fair competitors to obtain such technical information by the lawful method such as independent development or reverse design, if the infringer is an employee (including retirement), the period of duty or position in which the infringer worked in relation to the employer, the degree of access to the trade secrets, the internal regulations or agreements on the trade secrets, the freedom of living and occupation of the former employee, the duration of patent rights, etc.

[2] The time limit to protect a trade secret is when the parties are in existence as a secret, and the trade secret is naturally extinguished and thus becomes no longer confidential. The time limit refers to only the peace and performance period in which there is no infringement of a trade secret for an unlawful purpose after retirement, and the starting point is the time when a new agreement is made after retirement, when an infringement of a trade secret is finally committed, or when an act infringing a trade secret is committed during the time limit to prohibit infringement of a trade secret, the time limit to prohibit such infringement should not be extended.

[1] Article 10 of the Unfair Competition Prevention Act / [2] Articles 10 and 14 of the Unfair Competition Prevention Act

[1] Supreme Court Decision 96Da16605 delivered on December 23, 1996 (Gong1997Sang, 501)

Shinmon Industry Co., Ltd. (Attorneys Lee Jae-chul et al., Counsel for the plaintiff-appellant)

Dong Youngmon Industry Co., Ltd. and five others (Law Firm Sejong, Attorneys Osung-hwan et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 96Na49805 delivered on April 29, 1997

The appeal shall be dismissed. The costs of appeal shall be assessed against the applicant.

The grounds of appeal by the applicant’s attorney are examined.

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 return the trade secrets to the original location without such infringement. Thus, the prohibition of infringement of trade secrets should 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 should be reasonably compared with the aforementioned decisions: the content and difficulty of the trade secrets; the period and expenses required for the owner of the trade secrets to obtain technical information; the period and expenses required for the owner of the trade secrets to maintain the trade secrets; the time necessary for the infringer or other fair competitors to obtain such technical information by the lawful method such as independent development or reverse design; the period of work or position; the degree of access to the trade secrets; the freedom of livelihood and occupation of the former employee; the freedom of occupation and business activities; and the period of protection of the parties' rights to the trade secrets; and the period of protection of the parties' rights to the trade secrets should be reasonably compared to the aforementioned decisions.

Examining the reasoning of the judgment below in light of the records, it is not recognized that the respondent's finding the period for which the respondent cannot use the applicant's technical information, which is the trade secret of this case, for three years after his retirement, for three years after his retirement, is considerably unreasonable in light of the principle of equity. Thus, the argument in the grounds of appeal disputing this point

Meanwhile, since the time limit to protect trade secrets is the period in which trade secrets continue to exist between the parties as a secret, the trade secrets should be deemed to be no longer confidential as a matter of course after the lapse of that period. The time period refers to only the peace and performance period without any infringement of trade secrets for unlawful purposes after retirement, the starting point of which refers to the time when a new agreement is made after retirement, when an infringement of trade secrets is finally committed, or when an act infringing trade secrets is committed during the period in which the infringement of trade secrets is prohibited, all the arguments in the grounds of appeal that the prohibition period should be extended as much as the infringement period are just an independent opinion, and therefore, cannot be accepted.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Song Jin-hun (Presiding Justice)