[1] In a case where a trade secret acquired prior to the enforcement of the former Unfair Competition Prevention and Trade Secret Protection Act (amended by Act No. 1190, Jan. 1, 201) is unlawfully used for "after its enforcement," whether the said Act may be applied (affirmative)

[2] The time to commence the "violation of Use of Trade Secrets" under Article 18 (2) of the Unfair Competition Prevention and Trade Secret Protection Act

[3] The meaning of "use" of trade secrets

[4] Where an employee of a company takes out trade secrets or materials, which are important business assets, constitutes a crime of occupational breach of trust

[5] The meaning of "acquisition" of trade secrets under Article 18 (2) of the Unfair Competition Prevention and Trade Secret Protection Act

[1] Under the former Act on the Prevention of Unfair Competition and the Protection of Trade Secrets (amended by Act No. 7095 of Jan. 20, 2004), only the act of divulging trade secrets was punished by the former and incumbent executives or employees, and there was no penal provision as to each act of unlawful acquisition or unlawful use of trade secrets. However, Article 18(2) of the above Act as amended on Jan. 20, 2004 provides that "any person who acquired or used trade secrets useful to the company for the purpose of obtaining improper profits or causing damage to the company, or divulges them to a third party" shall be punished by a specific penal provision, which provides that "any person who acquired or used trade secrets useful to the company for the purpose of causing damage to the company, or obtained or used them as separate criminal elements. The purpose of the amended Act is to strengthen the protection of trade secrets by expanding the type of act subject to punishment in relation to trade secrets. In addition, Article 18(2) of the Addenda of the above Act provides that "any person who acquired them after its enforcement shall be subject to the amendment."

[2] In a crime of unlawful use of trade secrets as provided by Article 18(2) of the Unfair Competition Prevention and Trade Secret Protection Act, if an actor inspects trade secrets at the time close to the business activity under the intent to use or utilize the trade secrets in relation to the trade secrets in question (if the trade secret is in the form of electromagnetic waves, the act of executing electromagnetic waves in excess of the storage phase) is the commencement of the execution thereof.

[3] The use of a trade secret refers to an act that is used directly or indirectly for business activities by using it for the production, sale, etc. of goods or for research and development projects, etc. according to the original purpose of the use of the trade secret, and that specifically specific is possible.

[4] If an employee of a company disclosed a trade secret to a competitor or ships it out without permission for the purpose of using it for his own interest, the act of taking it out constitutes occupational breach of trust at the time of taking it out. Even if it is not a trade secret, the material is not disclosed to many unspecified persons, and is a major business asset produced by an employer using considerable time, effort, and expenses, the act of taking it out constitutes occupational breach of trust. Even if the employee of the company lawfully takes out the trade secret or the material which is a major business asset, and did not return or discard it to the competitor, even if the act of taking it out does not constitute occupational breach of trust, such act constitutes occupational breach of trust.

[5] Article 18(2) of the Unfair Competition Prevention and Trade Secret Protection Act punishs “a person who has acquired or used, or divulged to a third party, any trade secret useful to the company for the purpose of obtaining unjust profits or causing damage to the company.” Here, “acquisition” is not only a form of acquiring fluids, such as drawings, photographs, recording tapes, films, and files made in a form that can be processed by the electronic information processing system, but also a form of directly aware and memory of the trade secret itself or a person who knows the trade secret without obtaining any possession of the material. However, in any case or in a situation where it becomes possible to use the trade secret as one’s own. A person who is aware of the trade secret of a company has already acquired the trade secret. Thus, the mere act of removing the trade secret without permission from the outside of the company does not constitute “acquisition of the trade secret” as provided in the above provision, separate from the fact that it constitutes a crime of occupational breach of trust.

[1] Article 2 subparagraphs 2 and 3 of the former Unfair Competition Prevention and Trade Secret Protection Act (amended by Act No. 7095 of Jan. 20, 2004), Article 18 (2) of the Addenda (amended by Act No. 7095 of Jan. 20, 2004) / [2] Article 18 (2) of the Unfair Competition Prevention and Trade Secret Protection Act / [3] Article 18 (2) of the Unfair Competition Prevention and Trade Secret Protection Act / [4] Article 356 of the Criminal Act / [5] Article 18 (2) of the Unfair Competition Prevention and Trade Secret Protection Act, Article 356 of the Criminal Act

[1] Supreme Court Decision 2006Do7916 decided Jul. 9, 2009 (Gong2009Ha, 1362) / [3] Supreme Court Decision 98Da1928 decided Jun. 9, 1998 (Gong1998Ha, 1846) / [4] Supreme Court Decision 2004Do6876 decided Oct. 27, 2006 (Gong2006Do9089 decided Apr. 24, 2008) / [5] Supreme Court Decision 98Da1928 decided Jun. 9, 198 (Gong198Ha, 1846) / [5] Supreme Court Decision 2008Do679 decided Apr. 10, 2008

Defendant 1 and five others

Defendants and Prosecutor

Law Firm Kim & Lee LLC et al.

Seoul High Court Decision 2008No1298 decided Oct. 2, 2008

All appeals are dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the Defendants’ appeal

A. As to the application of the amended law of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter “Unfair Competition Prevention Act”).

Article 18(2) of the former Act on the Prevention of Unfair Competition and the Protection of Trade Secrets (amended by Act No. 7095 of Jan. 20, 2004) provides that "any person who acquires or uses trade secrets useful to the company or divulges them to a third party for the purpose of obtaining improper profits or causing damage to the company, shall be punished only by divulgence of trade secrets, and there was no penal provision as to unlawful acquisition or unlawful use of trade secrets." Article 18(2) of the amended Act provides that "any person who acquires or uses trade secrets useful to the company or divulges them to the third party for the purpose of obtaining improper profits or causing damage to the company shall be punished by a specific penal provision, and any unlawful acquisition or unlawful use of trade secrets shall be defined as a separate constituent element of crime. The purpose of the amended Act is to strengthen the protection of trade secrets by expanding the type of act subject to punishment in relation to infringement of trade secrets, and Article 18(2) of the Addenda of the amended Act provides that "any person who violated the former provisions of Article 18(2) and 90 of the Act shall also be punished.

In the same purport, the lower court is justifiable to punish the act of unlawful use of trade secrets of this case by applying the above amended law. In so doing, it did not err by violating the principle of no punishment without the law or the principle of trust protection,

B. Regarding the protection period of trade secrets

The court below rejected Defendant 1’s assertion that Defendant 1’s trade secret of Nonindicted Company 1, which was used in July 2007 through September 9, 2007, was not punished since the period of protection of the trade secret of Nonindicted Company 1 was expired, since Defendant 1 was released from the position of the president of the Technical Research Institute of Nonindicted Company 1 on April 1, 2004, and even thereafter, Defendant 1 was employed as the adviser of Nonindicted Company 1 until April 9, 2007.

Examining the evidence adopted by the court below in light of the records, such determination by the court below is justifiable. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the period

C. As to the legal principles on co-principals

In the case of joint principal offenders who jointly process two or more persons and jointly realize a crime, there should be a combination of intent to jointly process and realize the crime, but it does not necessarily need to be done directly and explicitly, and it may be done in succession and implicitly. In addition, in a case where the defendant denies the criminal intent together with the points of conspiracy, the facts constituting such subjective elements should be proven by means of proving indirect facts or circumstantial facts which have considerable relevance with the criminal intent due to the nature of the object.

In full view of the adopted evidence, the lower court acknowledged that Nonindicted Co. 2 was a co-principal for the crime of unlawful use of trade secrets of this case against the Defendants on the ground that the Defendants, who were executives and employees of Nonindicted Co. 1, were employed in Nonindicted Co. 2, organized an industrial plant in a short period and jointly carried out a large number of projects for water supply and development. In that process, the Defendants shared their respective roles, and the Defendants were referring not only to the trade secrets of Nonindicted Co. 1, which they were possessed by themselves, but also to the other Defendants at all times.

Examining the above legal principles and the evidence admitted by the court below in light of the records, the above determination by the court below is justifiable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to

D. As to the legal doctrine on the attempted unlawful use of trade secrets

As to the crime of unlawful use of trade secrets under Article 18(2) of the Unfair Competition Prevention Act, if an actor did an act of reading trade secrets at the close time with the intent to use or utilize it for business activities related to the trade secret (if the trade secret is in the form of electromagnetic wave, the act of executing the relevant electromagnetic wave beyond the storage level), it shall be deemed that the act has commenced.

The lower court determined that there was commencement of the implementation by allowing the Defendants to peruse the trade secrets of Nonindicted Co. 1, such as the facts charged, in order to utilize them as reference materials in the process of promoting the phase 3 project, etc., which is a large-scale flood and development project in Nonindicted Co. 2, which is a large scale project, an empty coal project, a shock, etc.

Examining the above legal principles and the evidence adopted by the court below in light of the records, the above determination by the court below is justifiable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the commencement of the crime of unlawful use of trade secrets, contradiction in the

E. As to the specific standards for the use of trade secrets

The use of trade secrets refers to activities that are directly or indirectly used in corporate activities by using them for business activities such as production and sale of goods, etc., or for research and development projects, etc. according to the original purpose of use of trade secrets, and specific acts that can be specified (see Supreme Court Decision 98Da1928, Jun. 9, 1998).

Based on the premise that how the trade secret was used or utilized in relation to the pertinent business activities shall be deemed to be the use of the trade secret if it is possible to specify the extent under specific circumstances, such as the original usage and nature of the trade secret, the contents of the pertinent business activities, and the degree of progress, etc., the lower court determined that the materials of the “SCOE OF SUPLY” in [Attachment 9] No. 12 of [Attachment 9] as indicated in the judgment of the lower court were prepared by referring to the part of “SCOE OPPY”, which was part of the proposal for the tender project promoted by Nonindicted Co. 1, thereby constituting a crime of unlawful use of the trade secret.

Examining the above legal principles and the evidence admitted by the court below in light of the records, the above determination by the court below is justifiable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the use of trade secrets, the hearing failure

F. As to breach of trust in relation to the infringement of trade secrets

If an employee of a company divulges a trade secret to a competitor or ships it out without permission for the purpose of using it for his own interest, such act constitutes occupational breach of trust, and even if it is not disclosed to many unspecified persons even if it is not a trade secret, and is a major business asset produced by using considerable time, effort, and expenses, the act of taking out the data constitutes occupational breach of trust. Even if the employee of the company lawfully takes out the trade secret or the material which is a major business asset, and did not return it to the competitor or return it for the purpose of using it at the time of withdrawal even if it does not constitute an occupational breach of trust, such act constitutes occupational breach of trust (see Supreme Court Decision 2006Do9089, Apr. 24, 2008).

The lower court determined that Defendant 2 had an intentional act of breach of trust at least, on the ground that Defendant 2’s withdrawal from office could be inferred that Defendant 2 had an intent to use the said files in the future at the time of release of the said files to Nonindicted Company 1, by taking into account the following circumstances: (a) Defendant 2 had a duty to preserve and return the files he/she acquired while in office; (b) if there were unavoidable circumstances making it impossible to return the files, in light of the incidental duty under an employment contract or the good faith principle; and (c) even though he/she sufficiently recognized that the files constitute the trade secrets of Nonindicted Company 1, he/she continued to keep the said files until he/she entered the Nonindicted Company 2; and (d) even if he/she had sufficiently recognized that the files constitute the trade secrets of the instant case, he/she continued to use the said files until he/she was employed.

Examining the above legal principles and the evidence admitted by the court below in light of the records, the above determination by the court below is justifiable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of the legal principles on the act of

2. As to the prosecutor's appeal

A. As to the violation of the Unfair Competition Prevention Act due to Defendant 2’s acquisition of trade secrets

1. Article 18(2) of the Unfair Competition Prevention Act provides that “A person who acquires or uses, or divulges to a third party, any trade secret useful to the company for the purpose of obtaining unjust profits or causing damage to the company.” Here, “acquisition” is not only the form of acquiring the possession of fluids, such as drawings, photographs, recording tapes, films, and files made in a form that can be processed by the electronic information processing system, but also the form of directly recognizing and memorying the trade secret or the form of employing a person who knows the trade secret without acquiring the possession of the fluids. However, in any case, if a person becomes able to create and use the trade secret as one’s own in social norms (see Supreme Court Decision 98Da1928, Jun. 9, 1998). Since a person who becomes an employee of the company and can use the trade secret is deemed to have already acquired the trade secret, such a person’s act constitutes an occupational breach of trust as provided by the above Supreme Court Decision 2008Da40880, Jun. 9, 2008.

The court below held on November 30, 2006 and December 20 of the same year that Defendant 2 had been in office as an executive officer of Nonindicted Co. 1, and had already acquired the above trade secret by copying 78 files for technical and managerial trade secrets, such as the contents of the attached Table 1 Crime List, in the judgment below, and Defendant 2 retired from the office and carried out the above information, it is nothing more than the continuation of the situation where Defendant 2 could use the trade secret and it does not constitute an act of acquiring it separately.

Examining the above legal principles and the evidence admitted by the court below in light of the records, the above determination by the court below is justifiable. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the violation

B. As to an attempted unlawful use of trade secrets

As examined in the above 2. D. as to the attempted use of trade secrets in this case, it cannot be said that there was a commencement of the execution of the unlawful use of trade secrets on the sole basis that the Defendants stored the trade secrets of Nonindicted Company 1 in the business-use computer in the office of Nonindicted Company 2, a competitor, or kept them in the office of Nonindicted Company 2, a competitor, or made them available at any time. The prosecutor’s assertion on this issue is unacceptable.

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)