[1] The purpose of prohibiting infringement of trade secrets and the method of determining the protection period of trade secrets / The scope of the protection period of trade secrets and the starting point of determining the completion period thereof belongs to the exclusive authority of the fact-finding court (affirmative in principle)

[2] The meaning of "use" of trade secrets, one of the infringement of trade secrets under Article 2 subparagraph 3 (a) through (f) of the Unfair Competition Prevention and Trade Secret Protection Act, and whether the time and cost required for the development of the trade secrets constitute "use" of trade secrets (affirmative)

[3] In a case where a part of a product is related to the infringement of trade secrets, the method for the infringer to determine the ratio of contribution to trade secrets to the whole profit gained by manufacturing and selling the product / Whether to determine the fact-finding or ratio as to the contribution and degree of trade secrets belongs to the exclusive authority of the fact-finding court

[1] The purpose of prohibiting infringement of trade secrets is to prevent an infringer from taking unfair advantage of his/her superior position than a fair competitor by such act, and to enable the owner of the trade secret to return the trade secret to the original position if said infringement had not been caused. Prohibition of infringement of trade secrets shall be made within the scope of the trade secret protection period in order to achieve this objective. The trade secret protection period shall be determined by comprehensively taking into account the substance and difficulty of the trade secret information, whether the infringer or another fair competitor could obtain the trade secret in a legitimate manner such as its own development or reverse design, the time and time required for acquiring the technology information of the owner of the trade secret, the development speed of relevant technology, the speed of the infringer’s human and material facilities, the freedom of occupation selection of the former worker, and the freedom of business activities. The establishment of the protection period of the trade secret and the starting point for determining the completion of such act through fact-finding as to the protection period of the trade secret belongs to the exclusive right of fact-finding court unless

[2] "Use of trade secrets" under Article 2 subparagraph 3 (a) through (f) of the Unfair Competition Prevention and Trade Secret Protection Act refers to an act of directly or indirectly using trade secrets for business activities, such as production and sale of goods, or for research and development activities, etc. in accordance with the original purpose of use of trade secrets, which is a specific act. In addition, it also refers to the use of trade secrets where the time and expenses required for the development of products are saved, such as where the time and expenses required for the development of products are reduced by simply copying technology which is a trade secret, referring to the case where products are produced by simply reproducing technology which is a trade secret, and where the trial and error are reduced

[3] Where a part of a product is related to the infringement of a trade secret, the ratio of contribution to the trade secret to the whole profit gained by the infringer from the manufacture and sale of the product must be determined by comprehensively taking into account whether the part related to the infringement of the trade secret is essential, technical and economic value, and the ratio of the entire composition or price. Meanwhile, the determination of fact-finding or ratio with respect to the contribution to and degree of the trade secret belongs to the exclusive authority of the fact-finding court, unless it is deemed that it

[1] Article 10 of the Unfair Competition Prevention and Trade Secret Protection Act / [2] Article 2 subparagraph 3 of the Unfair Competition Prevention and Trade Secret Protection Act / [3] Articles 11 and 14-2 (5) of the Unfair Competition Prevention and Trade Secret Protection Act

[1] [3] Supreme Court Decision 2017Da24113 Decided November 29, 2017 / [1] Supreme Court Order 2018Ma7100 Decided March 14, 2019 (Gong2019Sang, 859) / [2] Supreme Court Decision 98Da1928 Decided June 9, 1998 (Gong198Ha, 1846), Supreme Court Decision 2008Do9433 Decided October 15, 2009 (Gong2009Ha, 1904)

Amasta Co., Ltd. (Attorneys Kim Jong-hwan et al., Counsel for the plaintiff-appellant)

NASD Co., Ltd and eight others (LLC, Kim & Lee LLC, Attorneys Kim Jong-dae et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2015Na9945 decided July 6, 2017

All appeals are dismissed. The costs of appeal are assessed against each party.

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

1. As to the protection period and starting point of the technical information of this case among the grounds of appeal by the plaintiff and the defendants

A. The purpose of prohibiting infringement of trade secrets is to prevent an infringer from taking unfair advantage of the position superior to the fair competitor by such infringement, and to enable the owner of the trade secret to return the trade secret to the original position if such infringement had not been caused. Prohibition of infringement of trade secrets shall be made within the scope of the trade secret protection period in order to achieve this purpose. The trade secret protection period shall be determined by comprehensively taking into account the substance and difficulty of the trade secret, whether the infringer or another fair competitor could obtain the trade secret in a legitimate manner such as its own development or reverse design, the time and time required for acquiring the technology and information of the person holding the trade secret, the development speed of relevant technology, the speed of the infringer’s human and material facilities, the freedom of occupation selection of the former employee, and the freedom of business activities (see, e.g., Supreme Court Order 2018Ma7100, Mar. 14, 2019). The scope of the protection period of the trade secret and the establishment of the starting date for establishing the termination period thereof, as long as it is clearly unreasonable in light of the principle of equity.

B. The lower court acknowledged the technical information of Article 13 as a detailed circuit design, and determined that the period of trade secret protection against the circuit design part of the technical information of Article 13 used up to the latest among the Plaintiff’s technical information of the instant case (excluding the circuit design information of this case; hereinafter “instant circuit design information”), considering the period used by the Plaintiff for developing the circuit suitable for the vehicle of ○○○○○ (vehicle English name omitted), whether the Defendants could obtain the circuit design information of this case by lawful means such as independent development or reverse design, the lower court dismissed the Plaintiff’s claim for damages from September 1, 2010, when Defendant 3 et al. started to develop the circuit design information of this case in ○○○○○○○○○○○○○○○○○○○○○○○ (hereinafter “instant circuit design information”). Accordingly, the lower court determined that the Plaintiff’s claim for damages caused by the infringement of trade secret from around 201 to around 3, 2012.

C. In light of the aforementioned legal principles and records, the above determination by the court below is not considerably unreasonable in light of the principle of equity. In so doing, contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal principles regarding the period of trade secret protection and the starting point

2. 원고와 피고들의 상고이유 중 △△-□□□□□ 및 △△-◇◇◇◇◇, △△-☆☆☆☆☆ 내비게이션 관련 이 사건 기술정보의 사용 여부에 대하여

A. "Use of trade secrets", one of the acts of infringement of trade secrets, stipulated under Article 2 subparagraph 3 (a) through (f) of the Unfair Competition Prevention and Trade Secret Protection Act, refers to an act directly or indirectly used for business activities, such as production and sale of goods, or for research and development activities, etc., according to the original purpose of use of trade secrets, which may specify specific acts (see, e.g., Supreme Court Decisions 98Da1928, Jun. 9, 1998; 2008Do9433, Oct. 15, 2009). In addition, where a product is produced by simply copying technology which is a trade secret, as well as where a trial or error is reduced or a necessary test is omitted, it also constitutes the use of trade secrets.

B. According to the reasoning of the lower judgment, the lower court determined as follows.

1) The Defendants used the instant technical information to save the time and expenses needed for the development of prototypes at the early stage of the development of △△-Yeng-Yeang Port. It is recognized that the Defendant used the instant circuit design information from the development of prototypes to the mass production stage, but other materials related to the remaining technical information are lawfully provided and used by the Defendants from ○○○○○○○ (company English name omitted) and thus, it is difficult to view the use of the instant technical information.

2) It is recognized that the instant circuit design information was used in the instant circuit design development in △-Seaeaeaeaea.

3) △△-☆☆☆☆☆ 내비게이션 개발 시점에는 이 사건 회로설계 정보를 사용하였더라도 이에 대한 영업비밀 보호기간이 이미 도과하였으므로 위법하게 영업비밀을 사용한 것으로 볼 수 없다.

C. Examining the aforementioned legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the use of the instant technical information, without exhaust all necessary deliberations.

3. As to the calculation of damages among the grounds of appeal by the plaintiff and the defendants

원심은 원고가 제출한 증거만으로는 원고 주장의 피고 회사의 ▽▽(◎◎-◎◎◎◎), △△-□□□□□, △△-◇◇◇◇◇ 내비게이션 판매수량을 인정하기 어렵다고 판단하고, 피고들이 인정하는 위 각 내비게이션의 판매수량에 근거하여 2010년도부터 2012년도 3월분까지의 위 각 내비게이션의 매출액을 산정하였다.

In light of the record, the lower court did not exhaust all necessary deliberations in its judgment and did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on calculation of damages.

4. As to the Plaintiff’s ground of appeal

(a) If a part of a thing is related to the infringement of trade secrets, the ratio of contribution to the trade secrets to the whole profit gained by the infringer from the manufacture and sale of the thing must be determined by comprehensively taking into account whether the part related to the infringement of trade secrets is essential composition, its technical and economic value, and the ratio occupied by the entire composition or price, etc.

Meanwhile, determination of facts or ratio with respect to the contribution and degree of trade secrets belongs to the exclusive authority of a fact-finding court unless it is deemed that it is considerably unreasonable in light of the principle of equity (see Supreme Court Decision 2017Da24113, Nov. 29, 2017, etc.).

나. 원심은 이 사건 기술정보의 기술적 가치, 제품 전체 구성 내지 가격에서 차지하는 비율 등을 고려하여, 이 사건 기술정보가 내비게이션 제작·판매에 의하여 얻은 이익에 기여한 비율을 ▽▽(◎◎-◎◎◎◎) 내비게이션에서는 50%, △△-□□□□□ 내비게이션에서는 40%, △△-◇◇◇◇◇ 내비게이션에서는 4% 정도라고 판단하였다.

C. Examining the aforementioned legal principles and records, the recognition of the contribution rate by the lower court is not considerably unreasonable in light of the principle of equity. In so doing, the lower court did not err by misapprehending the legal doctrine on the contribution rate or by failing to exhaust all necessary deliberations

5. As to the omission of judgment in the Defendants’ grounds of appeal

According to the reasoning of the judgment below, as to the claim that the Defendants lawfully used the instant technical information by obtaining the consent to use the instant technical information from the ○○○○○○○○○○○○○○○ on May 11, 2010 under the Confidentiality Convention, the lower court, on May 11, 2010, deemed that it is difficult to recognize that ○○○○○○○○ consented to the use of the instant technical information by concluding a confidentiality agreement with Defendant 3, etc., and thus, rejected the Defendants’ claim. Accordingly, there was no error of omission of judgment as to the omission of the determination on the permission to use the instant technical information.

6. Conclusion

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

Justices Jo Hee-de (Presiding Justice)