[1] Requirements for an organization to constitute “medical device” under the Medical Devices Act

[2] Whether a natural person may be punished by applying joint penal provisions to an act committed by the natural person before the incorporation of a corporation (negative in principle)

[1] Article 2(1) of the Medical Devices Act defines a medical device as excluding drugs under the Pharmaceutical Affairs Act, quasi-drugs, and artificial limbs and aids among the disabled aids under Article 65 of the Act on Welfare of Persons with Disabilities, which are used by an apparatus, machine, material, or any other similar product used for the purpose of diagnosing, treating, alleviating, alleviating, treating, or preventing a disease ( Subparagraph 1), a product used for the purpose of diagnosing, alleviating, alleviating, or correcting an injury or disability ( Subparagraph 2), a product used for the purpose of testing, replacing, or transforming a structure or function ( Subparagraph 3), and a product used for the purpose of controlling pregnancy ( Subparagraph 4). To fall under the medical device under the Medical Devices Act by any apparatus, etc., it should be acknowledged that the apparatus, etc. objectively has the performance provided for in each subparagraph of Article 2(1) of the Medical Devices Act, or that it has no objective performance, even if it does not objectively have such performance, the type and effect indicated in such apparatus, etc., and its target and explanation at the time of sale, etc.

[2] In general, when a natural person commits a criminal act as a juristic person, he/she is held liable for such criminal act. However, it is difficult to deem that the effect of an act committed by a natural person prior to the establishment of a juristic person is naturally attributable to the juristic person after the establishment of a juristic person, as well as the juristic person to which the legal effect belongs, even if the law specifically provides for the purpose of achieving that purpose, and as such, it is difficult to deem that the effect of an act by a natural person prior to the establishment of a juristic person naturally belongs to the juristic person after the establishment of a juristic person. In addition, punishment for a juristic person as an employer under the joint penal provisions is on the ground of negligence in the appointment and supervision of a juristic person who neglected the duty of considerable attention or supervision in relation to the relevant act committed by a juristic person in light of the principle of self-responsibility of punishment. Thus, it cannot be said that

[1] Articles 2(1), 3, 24(2)5, 26(1), 51(1), and 52(1)1 of the Medical Devices Act / [2] Articles 24(2)5, 52(1)1, and 55 of the Medical Devices Act

[1] Supreme Court Decision 2004Do8706 Decided March 25, 2005 (Gong2005Sang, 708) Supreme Court Decision 2008Du10393 Decided December 11, 2008 / [2] Supreme Court Decision 87Do1213 Decided November 10, 1987 (Gong120), Supreme Court Decision 93Do1483 Decided February 8, 1994 (Gong194Sang, 1038), Supreme Court Decision 2009Do4975 Decided July 14, 2011

Defendant 1 and two others

Defendants

Law Firm Barun Law LLC, Attorneys Gangwon-won et al.

Seoul Central District Court Decision 2014No4967 Decided June 18, 2015

The part of the judgment of the court below against Defendant 3 is reversed, and that part of the case is remanded to the Panel Division of the Seoul Central District Court. All appeals by Defendants 1 and 2 are dismissed.

The grounds of appeal are examined.

1. As to the assertion of misapprehension of the legal principle on the concept of medical device

Article 2(1) of the Medical Devices Act defines a medical device as excluding drugs and quasi-drugs under the Pharmaceutical Affairs Act, and artificial limbs and aids among disability aids under Article 65 of the Act on Welfare of Persons with Disabilities, which are used solely or in combination for the purpose of diagnosis, treatment, mitigation, treatment, or prevention of diseases (subparagraph 1), a product used for the purpose of diagnosis, treatment, mitigation, or correction of injuries or disorders (subparagraph 2), a product used for the purpose of testing, replacing, or transforming the structure or function (subparagraph 3), a product used for the purpose of controlling pregnancy (subparagraph 4), and a product used for the purpose of controlling pregnancy. To constitute a medical device under the Medical Devices Act, a certain device has the performance prescribed in each subparagraph of Article 2(1) of the Medical Devices Act from an objective point of view, or a product with such performance, even if it does not objectively have such performance, it should be recognized as being used for the purpose of examining, replacing, or correcting the structure or function indicated therein, the target and effect of the sale thereof, and its explanation at the time of sale.

In light of the circumstances stated in its holding, the lower court determined that the instant organization was “medical device” subject to the Medical Devices Act according to its objective performance, although it was manufactured, imported, and used for sports purposes, but the objective performance and principle held by the instant organization does not differ from that of the personal high-frequency stimulation, and the Defendants have the same risk as that of potential risk to the human body when it can be used as a personal high-frequency stimulation. In so doing, the Defendants are fully aware of such risk. In so doing, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the concept of medical appliances under the Medical Appliances Act and the intent to commit the crime of violating the Medical Appliances Act, contrary to what is alleged in the grounds of appeal.

2. As to the assertion of misapprehension of legal principles as to the concept of advertisement

Examining the reasoning of the lower judgment in light of the evidence duly admitted by the lower court, it is justifiable to have determined that the act of carrying an answer on the website, citing the circumstances in its reasoning, can be deemed as advertising the instant organization. In so doing, the lower court did not err by misapprehending the legal doctrine on the concept of advertisement, contrary to what is alleged in the grounds of appeal.

3. As to the assertion of misapprehension of legal principles as to the scope of application of joint penal provisions

Where a representative of a corporation, or an agent, employee or other servant of the corporation or an individual commits an offence under Articles 51 through 54 in connection with the business of the corporation or the individual, not only shall such offender be punished, but also the corporation or the individual shall be punished by a fine under the relevant provisions: Provided, That this shall not apply where such corporation or individual has not been negligent in giving due attention and supervision concerning the relevant duties to prevent such offence.

Generally, even if a natural person commits a criminal act as a juristic person, he/she is held liable for such criminal act. However, inasmuch as the Act specifically provides for the achievement of its purpose, not only the person who committed such act but also the juristic person to which the legal effect belongs (see Supreme Court Decision 93Do1483, Feb. 8, 1994). It is difficult to deem that the effect of an act by a natural person before the establishment of a juristic person naturally belongs to the juristic person after the establishment of a juristic person. Moreover, punishment for a juristic person as an employer under the joint penal provisions is based on the negligence of appointment and supervision by an employer juristic person, in light of the principle of self-responsibility in punishment (see Supreme Court Decisions 87Do1213, Nov. 10, 1987; 2009Do4975, Jul. 14, 201). Thus, it cannot be deemed that there is no special reason to punish a juristic person prior to the establishment of a juristic person, unless there is any special provision for the appointment of a juristic person.

According to the records, around January 10, 2013, Defendant 2 gave an article to the effect that Defendant 2 advertised the efficacy of the instant body, which is a medical device, on the website, NAB knowledge, and Defendant 3 Co., Ltd. (hereinafter “Defendant Company”) was established on January 16, 2013. Examining these facts in light of the aforementioned legal principles, the point at which Defendant 2 puts this article on is before the establishment of the Defendant Company, and thus, Defendant 2 cannot be punished for Defendant Company by applying joint penal provisions on the grounds of Defendant 2’s act, since it was before the establishment of the Defendant Company. This is also the same even if Defendant 2’s act was planned to be established as of January 10, 2013.

Nevertheless, the lower court determined otherwise that Defendant Company is liable for Defendant 2’s act. In so determining, the lower court erred by misapprehending the legal doctrine on the scope of joint penal provisions, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

4. Scope of reversal

Of the lower judgment, the part of the lower judgment on the violation of the Medical Devices due to the advertisement of the Defendant Company’s non-permitted or unreported imported medical appliances should be reversed. Since the violation of the Medical Devices Act due to the use of the unauthorized or unreported imported medical appliances and the concurrent crime under the former part of Article 37 of the Criminal Act, the part of the lower judgment on the Defendant Company

5. Conclusion

The part of the lower judgment against the Defendant Company is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. Defendant 1 and Defendant 2’s appeal are all dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)