[1] Whether a person holding a trade secret may impliedly express his/her consent to use the trade secret (affirmative) and the method to determine whether such implied expression of consent exists

[2] In a case where Gap corporation entered into a design technology service contract with Eul corporation and prepared design data on chemical power plants built by Eul corporation, but Eul corporation entered into a design technology service contract with Eul corporation and sought damages pursuant to the Unfair Competition Prevention and Trade Secret Protection Act, where Eul corporation's design data was defective in providing and using the above design data to Byung corporation which entered into a design technology service contract with Eul corporation while constructing a new chemical power plant, and Gap corporation breached the duty of confidentiality against Eul corporation, the case affirming the judgment below holding that Eul corporation's implied consent was granted to Byung corporation to provide and use the above design data within the scope of design purpose of new chemical power plants

[1] A person who possesses trade secrets may express his/her consent to use trade secrets to the other party to the transaction without a certain method. The existence of such implied declaration of intent shall be determined by comprehensively taking into account the following: (a) the content of the trade secrets-related contract entered into with the other party to the transaction; (b) the scope to which a person who possesses trade secrets may be deemed to have consented to use the trade secrets; (c) the actual circumstances of the relevant transaction; and

[2] Where Company A entered into a design technology service contract with Company B and prepared design data on chemical power plants built by Company B; however, Company B, which entered into a design technology service contract with Company B while constructing a new chemical power plant, filed a claim for damages pursuant to the Unfair Competition Prevention and Trade Secret Protection Act, etc. against Company B, the case affirming the judgment below that Company B provided Company B’s implied consent to provide and use the design data within the scope of design purpose of a new chemical power plant, in light of the overall circumstances, including the fact that “construction data is inevitably used for operating and maintaining the power plant, and will be used as important reference materials at the time of construction of a new power plant” in the contract for design technology service contract concluded with Company B, and that Company B provided and used the design data within the scope of design purpose of a new chemical power plant.

[1] Article 2 subparag. 3 (d) and Article 11 of the Unfair Competition Prevention and Trade Secret Protection Act, Articles 105 and 390 of the Civil Act / [2] Article 2 subparag. 3 (d) and Article 11 of the Unfair Competition Prevention and Trade Secret Protection Act, Articles 105 and 390 of the Civil Act

Korea Electric Technology Co., Ltd. (Bae, Kim & Lee LLC, Attorneys Cha Han-sung et al., Counsel for the defendant-appellant)

Korea Dong-dong Development Co., Ltd. (Law Firm Barun, Attorneys Lee In-Sa et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2017Na2000733 decided November 2, 2017

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

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

1. Ground of appeal No. 1

A. A person who possesses trade secrets may express his/her consent to use trade secrets to the other party to the transaction without a certain method. The existence of such implied declaration of intent shall be determined by comprehensively taking into account the following: (a) details of the trade secret-related contract entered into with the other party to the transaction; (b) scope of deeming that the person who possesses trade secrets consented to use the trade secret; (c) circumstances in the relevant field; and (d) the attitude of the party.

B. In light of the following circumstances, the lower court determined that it was reasonable to view that the Defendant’s implied consent was given to the Hyundai Engineering Co., Ltd. (hereinafter “Modern Engineering”) regarding the provision of materials listed in the [Attachment 3 and 4] of the lower judgment with respect to the field Nos. 5 and 6 (hereinafter “instant design materials”) within the scope of the design purpose of the field No. 3 and 6.

(1) On February 28, 2003, the Plaintiff entered into a design technology service contract for the term “YYYYY 3 and 4, which are built by the Defendant and the Defendant.” The design technology service contract for the term “construction materials are stipulated in the design service contract for the term “construction materials are inevitably used for the operation and maintenance of the power plant and will be used as important reference materials at the time of the construction of the power plant in the future.” Furthermore, the design service contract for the term “YYYYYY 5 and 6” refers to the investigation and review of the existing facilities based on the materials provided by the Defendant, and reflect them in the design.

(2) In 1984, the Korea Electric Power Corporation promoted the design standardization of the 500W-class thermal power plant, and 800W-class thermal power plant in 1995. In fact, the 3-6th, 5, 6th and 3-6th and 3-6th in the same site are continuously designing the same capacity of the electric power plant in the same site, and the design of the design data of the prior string machine is being improved and reflected in accordance with the conditions of the subsequent string. As such, when the design data of the previous string was used in the subsequent string, there was no example for the subsequent string machine owner or design service provider to pay for the use or obtain a separate approval for the use.

(3) In the case of a design service agreement between the Korea Electric Power Corporation, the client, and the Plaintiff, which entered into in 1989, the Plaintiff is required to investigate and examine the design data of Samcheon-gu 1 and 2, and to prepare design data reflecting the design data. Meanwhile, the considerable portion of the design work of Samcheon-si 1 and 2 was conducted by Hyundai Engineering. The Plaintiff appears to have received the design data of Samcheon-gu 1 and 2 from the Korea Electric Power Corporation without obtaining a separate approval or payment for use from Hyundai Engineering.

(4) Around June 2009, the Plaintiff examined the design technology service performance plan for the Young 5 and 6 flag with the method of performing the pertinent design service and the details of the service. In this case, it can be deemed that the design data of this case was planned to be provided to the design service provider for the Young 5 and 6 flag. However, the Plaintiff did not raise any objection to the above details of service.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the evidence duly admitted by the lower court, the lower court’s determination is justifiable. In so determining, the lower court did not err by misapprehending the legal doctrine regarding the interpretation of implied expression of intent and the interpretation and application of the disposal document, or by exceeding the bounds of the principle of

2. The second ground for appeal

The lower court determined that among the design data of this case, the standardized marks in the “technical specifications” and “Standard Specificationss (No. 1350-1361 No. 5 of the attached Table of the lower judgment)” included in the tender specifications for the apparatus were already publicly known, and did not have any non-public nature as trade secrets.

Examining the reasoning of the lower judgment in light of the record, the lower court did not err by misapprehending the legal doctrine regarding the non-public nature of trade secrets, contrary to what is alleged in the grounds of

3. Ground of appeal No. 3

Of the design documents of this case, the lower court determined that the Plaintiff cannot be deemed as a trade secret holder with respect to the design standardization materials of this case and related data, and the Nos. 119, 130, 433, 3963, 589-6010 No. 7 and 59 jointly held that the Plaintiff and the Defendant were in the position of trade secret holder.

Examining the reasoning of the lower judgment in light of the record, the lower court did not err by misapprehending the interpretation of a disposal document and the legal doctrine on the subject to whom trade secrets accrue.

4. Conclusion

The Plaintiff’s appeal is dismissed as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Dong-won (Presiding Justice)