[1] Whether the exercise of the right to rescission is restricted in a case where an obligee made a lawful demand for performance, but there is a justifiable reason for the obligor to fail to perform within the highest period or a reasonable period of time (affirmative)

[2] The case holding that the judgment below which recognized the cancellation of a contract where Gap agreed to receive royalties on the above patent right while transferring Eul's production facilities, patent rights, etc. to Eul corporation and entering into a contract with Eul corporation to work for not less than three years, and Gap set forth the contract to cancel the above contract on the ground of delayed performance after he set aside the royalties on the machinery produced during the middle and notified Gap of the payment of royalties on the machinery

[1] Even though it cannot be said that the obligee’s demand for the performance of an obligation that the obligee is liable to pay to the obligor cannot be said to be a peremptory notice for performance unlawful, in light of the circumstances before and after the obligor’s delay, the exercise of the right of rescission may be restricted on the ground that the obligor has no performance or provision of performance within the highest period or a reasonable period of time under the good faith principle, in light of the circumstances such as the obligor’s attitude of performance and the progress of litigation.

[2] In a case where Gap agreed to transfer Eul's all production facilities, materials, patent rights, etc. of his factory to Eul and to work for not less than three years, Eul company agreed to receive royalties for machinery manufactured using the above patent at the rate calculated according to the manufacturing cost; Gap notified Eul company to pay royalties for machinery manufactured until now after withdrawal from Eul company; and notified Eul company to pay royalties for the amount of royalties; and notified Eul company to cancel the above contract on the ground of delay in performance, the case holding that the judgment below erred in the misapprehension of the legal principles or the right of rescission on the premise that Gap's performance can not be cancelled on the ground that Gap's right of rescission is not exercised within a reasonable period of time on the ground that Gap's demand for rescission of the contract by examining whether Eul company's performance of the right of rescission on the ground that Gap's demand for payment of royalties can be calculated accurately and Eul company's accurate calculation limit is limited.

[1] Articles 2 and 544 of the Civil Act / [2] Articles 2 and 544 of the Civil Act

[1] Supreme Court Decision 2000Da64403 decided Apr. 10, 2001 (Gong2001Sang, 1111)

Plaintiff (Law Firm Hanmang, Attorneys Oh Jeong-han et al., Counsel for plaintiff-appellant)

Orto Korea Co., Ltd. (Law Firm Barun, Attorneys Park Jae-sik et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Na48567, 48574 decided January 10, 2013

The part of the lower judgment against the Defendant (Counterclaim Plaintiff) regarding the claim for the cancellation of the patent transfer registration and the transfer registration of the right to use the actual design is reversed, and that part of the case is remanded to the Seoul High Court. The remainder of the appeal is dismissed.

The grounds of appeal are examined.

1. As to a claim for the cancellation of registration of transfer of a patent right and transfer of a right to use a practical design in the principal claim

A. Based on the evidence adopted, the lower court acknowledged the fact that the Defendant did not pay royalties to the Plaintiff even though the Plaintiff (Counterclaim Plaintiff; hereinafter “Plaintiff”) notified the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) of the payment of royalties in accordance with the instant contract at KRW 24,130,00, and attached cost list, which is the basis for calculation thereof, on October 27, 2010. However, the Defendant’s assertion that there is justifiable reason for the Defendant’s failure to pay royalties to the Plaintiff, even if it is difficult for the Defendant to accurately calculate the production cost of the Plaintiff and submit it to the Defendant, it would be difficult for the Defendant to accurately calculate the costs of production and production, such as the list of purchased goods owned by the Plaintiff, design drawings, order sheet, individual seller’s statement, and finished machinery, etc. The lower court appears to have calculated the costs of production and production to a certain extent without any justifiable reason for the Plaintiff’s refusal to pay royalties to the Plaintiff as the Defendant’s demand for the payment of royalties to the Plaintiff for non-performance of the instant contract.

B. However, it is difficult to accept the above determination by the court below for the following reasons.

1) Even though it cannot be said that the obligee’s demand for the performance of an obligation that the obligee is liable to pay to the obligor cannot be said to be the peremptory notice for the performance of an obligation illegal, in light of the circumstances before and after the obligor’s delay, the exercise of the right of rescission may be restricted on the ground that the obligor has no performance or provision of performance within the highest period or within a reasonable period of time under the good faith principle, in light of the circumstances such as the obligor’s attitude of performance and the progress of the lawsuit (see Supreme Court Decision 200Da64403, Apr. 10, 200).

2) Review of the records, including the evidence adopted by the lower court, reveals the following circumstances.

A) According to the instant contract, the Plaintiff is obligated to take over all the production facilities and devices of the Plaintiff factory; (B) the Plaintiff’s duty to take over the Plaintiff’s materials and storages; (c) the Plaintiff and Nonparty 1 are obligated to work in the Defendant Company for more than three years; (d) the duty to transfer the patent right and utility model right; and (e) data necessary for the emeral business; and (e) the Defendant has already paid KRW 100 million to the Plaintiff in return for the Plaintiff’s performance of each of the above obligations; and (e) the instant contract’s royalties are deemed a kind of royalty for the patent right and utility model right transferred by the Defendant under the instant contract.

B) The royalties under the instant contract, which the Plaintiff notified, are about the machinery produced by the Plaintiff after entering the Defendant Company. The Plaintiff did not request the Plaintiff to calculate the royalties once from the time when he entered the Defendant Company until the day he entered the Defendant Company, and the royalties on the machinery produced by the Plaintiff should be calculated at the ratio according to the production cost and production cost. As such, only the Plaintiff, who can know the production and production cost, can accurately calculate the royalties, and there is a limit in calculating it accurately.

C) According to the provisions of the Labor Standards Act, even if the Plaintiff did not have an obligation to work in the Defendant Company for more than three years as agreed in the instant contract, the Plaintiff did not have an obligation to work in the Defendant Company for more than three years, and did not present an accurate basis for calculating the royalty of the instant case without having to work in the workplace. As a result, the Plaintiff notified the payment

D) It seems that the Defendant also believed that the Plaintiff’s three-year work agreement was effective, and it is difficult to deem that the Plaintiff did not pay the royalties itself because the Plaintiff’s maximum royalty amount cannot be ascertained as to whether it was accurate.

E) On November 18, 2010, Nonparty 2 and Nonparty 2 met with the Plaintiff to resolve the issue of royalty calculation, etc., but did not determine the manufacturing cost, which serves as the basis for royalty calculation, and thus, the Defendant could not pay it. Upon the continuation of dispute over royalty amount, the Plaintiff filed the instant lawsuit seeking payment of royalty 24,130,000 won on December 9, 2010.

F) The Plaintiff expressed his intent to cancel the instant contract on the ground of no royalties accrued from the Defendant in the lawsuit at the first instance court of this case on June 201, while disputing the royalty amount to be paid by the Defendant, but there was a circumstance that the Defendant could withhold the payment of royalties before determining the accurate royalty amount.

3) On the other hand, in light of the above legal principles, the court below should determine whether the plaintiff's exercise of the right of rescission can be restricted under the principle of good faith on the ground that the plaintiff did not perform the duty of payment of royalties within the maximum or reasonable period of time on the ground that the plaintiff did not perform the duty of payment of royalties within the notified period of time, considering the characteristics of the contract in this case, the court below's rejection of the defendant's assertion on the grounds that the court below did not err in the misapprehension of legal principles as to the restriction on the exercise of the right of rescission, which affected the conclusion of the judgment on the grounds that the plaintiff did not perform the duty of payment of royalties within the notified period of time or within a reasonable period of time. The ground of appeal pointing this out is with merit.

2. As to the remaining part of the appeal

Although the Defendant appealed to the part of the claim for payment of money among the main claim of the lower judgment, the Defendant did not state the grounds of appeal as to this, even though examining the petition of appeal and the appellate brief.

3. Conclusion

Therefore, without examining the remaining grounds of appeal as to the claim for the procedure for the registration of transfer of patent rights and the registration of cancellation of transfer of right of actual use among the principal claim, the part against the defendant as to this part of the principal claim of the judgment below is reversed and remanded to the court below for a new trial and determination. The remaining grounds of appeal are dismissed as it is without merit. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-dae (Presiding Justice)