2017 Doz. 589615 Compensation, etc.

EM Bioscience Co., Ltd.

A Stock Company

May 18, 2018

June 8, 2018

1. The defendant shall pay to the plaintiff 371,017,50 won with 15% interest per annum from October 20, 2016 to the day of full payment.

2. The costs of the lawsuit are assessed against the defendant.

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Basic facts

A. The Plaintiff is a company engaged in manufacturing, selling, exporting, and importing medical appliances, pharmaceutical products, genetic diagnostic devices, and marketing, and export and import of reagents. The Defendant is a company engaged in manufacturing and selling cosmetics, wholesale and retail business, cosmetics import and export business, medical appliances wholesale and import business, and medical appliances export and import business.

B. On March 22, 2016, the Plaintiff entered into an exclusive sales contract with the Defendant to exclusively supply B-related product produced by the Defendant (hereinafter “instant product”). The main content of the contract is as follows.

- 독점 총판 계약서 -제1조 계약의 목적1. 피고와 원고는 피고가 현재 및 향후 생산하는 B 관련된 전 제품(이 사건 제품)에 대한 독점 총판 계약을 맺고 상호 신의성실 원칙에 의한 상호 공동이익 추구를 목적으로 한다. 이에 피고는 이 계약에 따른 원고의 원활한 총판영업을 위해 노력하기로 하고, 원고는 제품에 대한 독점 총판권자로서의 역할을 충실히 하기로 한다.제2조 총판 및 제품의 범위와 가격1. 피고는 원고에게 본 계약을 통해 제품에 대한 국내 지역에 대한 독점판매권을 원고가 메디칼 사업을 영위하는 동안 항구적으로 부여한다.2. 피고가 원고에게 본 계약을 통해 판매를 할 수 있도록 허용한 취급 제품은 피고가 현재 및 향후 생산하는 이 사건 제품으로 하며, 이에 한해서 피고는 원고의 독점 총판권을 인정하고, 원고의 사전 서면 동의가 없는 한 원고를 제외한 어떠한 거래처에도 제품을 판매 또는 공급하지 않는다.3. 이 계약에 따라 피고가 원고에게 공급하는 제품의 종류, 가격은 B 15ml : 4,400원, B 50ml : 6,600원, B 150ml : 14,300원으로 정한다. 상기 금액은 부가가치세를 포함한 것이며, 향후 피고가 추가적인 B관련 제품을 생산할 경우에는 공급가격을 상호 협의하여 결정한다.제3조 매매대금의 지급원고는 피고에게 제품 발주시 50%를 제공하며, 제품 수령후 잔금 50%를 피고가 지정하는 피고 명의의 은행계좌에 현금으로 송금하는 것을 원칙으로 하되, 원고와 피고가 협의핳여 대금 지급 시기를 조절할 수 있다.-중략-제7조 계약위반1. 계약 위반으로 인하여 피고 또는 원고가 손해가 발생하였을 경우 민, 형사상의 손해배상청구를 할 수 있다.2. 본 계약에 관하여 피고 또는 원고가 위반하였을 경우 대상제품의 판매대금 전액을 손해배상액으로 한다.제8조 관할 법원본 계약에 관하여 피고와 원고간에 분쟁이 발생할 시에는 상호 원만히 협의하여 해결하기로 하고, 그럼에도 불구하고 발생하는 소송 사건의 관할은 서울중앙지방법원으로 한다.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1- 3 and the purport of the whole pleadings

2. Summary of the parties’ assertion

A. The plaintiff's ground for claim

1) REPOEAL ACT. - Claim for damages due to default

In accordance with Article 2 of the contract of this case, the Plaintiff was granted the exclusive domestic sales right for the product of this case, and the Defendant violated this, thereby failing to perform the Defendant’s obligations under the contract of this case by directly selling the product of this case without the Plaintiff’s written consent. Accordingly, the Defendant is obliged to compensate the Plaintiff for damages arising from the breach

2) Preliminary Claim - Claim for Damages arising from tort

A) Claim for damages caused by infringement of trade secrets

The Defendant, who was an employee of the Plaintiff Company, employed the Plaintiff Company C and D, engaged directly in business activities using the Plaintiff’s business transaction information and various business information. This constitutes an act of infringing trade secrets acquired by the Defendant through unlawful means (hereinafter “Unfair Competition Prevention Act”) (Article 2 subparag. 3(a) through (d) of the Unfair Competition Prevention and Trade Secret Protection Act).

B) Claim for damages caused by unfair competition

The Defendant, using the Plaintiff’s outcomes made by considerable investment or effort (transaction information and various business information), thereby selling the instant product on its own, thereby infringing the Plaintiff’s economic interests by using it for its own business in a manner contrary to fair commercial practices or competition order in violation of the instant contract. This constitutes an unfair competition act under Article 2 subparag. 1 (j) of the Unfair Competition Prevention Act.

3) Claim for damages

A) The Defendant is obligated to compensate the Plaintiff for the amount set as liquidated damages under Article 7 of the instant contract. Therefore, the sales volume of the instant product sold directly by the Defendant without supplying it to the Plaintiff is KRW 371,017,500 multiplied by the sales proceeds of the Plaintiff.

B) The Defendant is liable for compensating for damages calculated pursuant to Article 14-2 subparag. 1 and 2 of the Unfair Competition Prevention Act. If the Plaintiff did not request the Defendant to supply goods from Daegu, it is reasonable to view all those goods as the amount for domestic sales of the Defendant. Therefore, the difference in supply between the instant goods is the total quantity of the goods that the Plaintiff could have sold without the Defendant’s unfair competition act or infringement of trade secrets. The amount of profit per unit is 60,700 won for the products of 150ml (75,300 won for the Plaintiff’s sales unit - 14,300 won for the Defendant’s supply unit - 23,400 won for the products of 50ml and 300ml, 300 won for the products of 50ml and 40ml, 300 won for the Plaintiff’s sale unit -60,000 won for the products of 50ml and 305ml.

B. Defendant’s assertion

1) On breach of a contract

Around 2010, the Defendant established E Co., Ltd. (hereinafter referred to as “E”) to take exclusive charge of the business of the instant product, and granted F, the president of the Defendant, to F, the head of E’s headquarters, and to G, the representative director of E, respectively. In accordance with the purport of the establishment of E, the Defendant entered into a contract with E on January 1, 2014 to grant exclusive sales rights to the instant product. At the time of the conclusion of this contract, the Defendant had the two companies continue to trade with the existing business partners, and with respect to H products, the Defendant would keep the reserves operated by the Defendant as it is.

The Plaintiff entered into an oral agreement. After that, the Plaintiff had the Plaintiff take over E, and at the time of the acquisition, G had the content of the oral agreement delivered to the Plaintiff while maintaining the content of the agreement, and thus, the Defendant did not violate the instant agreement even if the Defendant sold the product after entering into the instant agreement with the Plaintiff.

2) As to the infringement of trade secrets and unfair competition

Since C and D do not use the Plaintiff’s customer as business, the act of C and D cannot be deemed as an act of infringing trade secrets or unfair competition. Even if C and D’s act constitutes an act of infringing trade secrets or unfair competition, the Defendant instructed C and D to do so, or did not conspired with them, so the Defendant does not assume the responsibility under the Unfair Competition Prevention Act.

3) As to the amount of damages

When calculating the amount of damages pursuant to Article 7 of the contract of this case among the amount of damages claimed by the Plaintiff, it shall be interpreted that it shall be based on the sales unit price stipulated in the contract of this case. On the other hand, the amount of damages stipulated in Article 7 of the contract of this case shall be deemed to be the estimate of the amount of damages. However, the contract period or supply price stipulated in the contract of this case is set disadvantageous to the Defendant. The defendant's representative director F inevitably entered into the contract of this case at the continuous request of G, which had been before E. Since the time when the Plaintiff entered into the contract of this case, it would be inevitable to enter into the contract of this case. Since the time when the Plaintiff started the development of the product of this case and its ingredients almost the same kind of product as the product of this case and tried to put unfair pressure to the Defendant who could begin the production and sale and competitive relationship, the amount of damages stipulated in the contract of this case is unreasonable

3. Formation of liability with the primary claim; and

In full view of the statement and the purport of the entire argument as to Gap evidence No. 5, the defendant can directly recognize the fact that he sold the product of this case even after the conclusion of the contract of this case, and there is no evidence to deem that the plaintiff's written consent related to direct sale was obtained. Thus, the defendant violated the obligation under Article 2

Although the Defendant asserts that the transactional relationship under the agreement that the Plaintiff entered into with the Defendant before accepting E was in a state with the Plaintiff, the testimony of the witness G and I alone is insufficient to recognize the Defendant’s assertion, and there is no other evidence to acknowledge it, the Defendant’s assertion regarding the oral agreement is not acceptable.

As long as liability is established upon the primary claim, no preliminary claim shall be judged.

4. Scope of damages.

According to the facts of recognition, Article 7 of the contract of this case provides that "if the defendant or the plaintiff violated the contract of this case, the total amount of sales proceeds of the target product shall be the amount of damages." This constitutes an estimate of damages.

In full view of the court’s order of submission of documents to, and the results of, meetings of, the Daegu-do University School Enterprise Center and the purport of the entire pleadings, the Defendant is supplied from, Daegu-do University. After the conclusion of the instant contract, the amount supplied by the Daegu-do University to the Defendant and the amount supplied by the Plaintiff, and the sales proceeds of the Plaintiff are as set forth in the following table. If the Defendant fulfilled the instant contract, the Defendant appears to have supplied all the products received from the Daegu-do University to the Plaintiff, and thus, the amount of “the following table” can be presumed to be the quantity of the products sold by the Defendant in violation of the instant contract (the Defendant asserts that most of the instant contracts were sold overseas, but there is no evidence to acknowledge this).

A person shall be appointed.

On the other hand, the Plaintiff sold at a discounted price of 50% where 10 or more orders for the sale of the instant product, and in this case, 50% of the Plaintiff’s sales price is the sales price under Article 7 of the instant contract. Thus, in this case, the amount that the Defendant is liable to compensate the Plaintiff pursuant to Article 7 of the instant contract is KRW 371,017,50 (i.e., the product quantity X Plaintiff’s sales price sold by the Defendant x 50%).

In the event that the full amount of sales proceeds as stipulated in Article 7 of the instant contract is recognized as the amount of damages, there is room to view that the amount of damages is excessive in light of the developments leading up to the conclusion of the instant contract, the distribution channel of the instant product, the past transaction relationship with the Defendant and E, and the circumstances leading up to the Plaintiff’s acceptance of E. However, the Plaintiff only claimed as the amount of damages equivalent to 50% of the price he/she sells. However, there is no proof of evidence to support the evidence or circumstantial facts supporting the Defendant’s assertion as to the grounds for reduction alleged by the Defendant, namely, the grounds for reduction, namely, the contract period or supply price stipulated in the instant contract, the unreasonable, or the Plaintiff’s measures to build a competitive relationship due to the development of the same product.

Therefore, the amount of damages claimed by the Plaintiff upon its primary claim is deemed to be the amount of damages to be paid by the Defendant to the Plaintiff.

5. Conclusion

Therefore, the defendant is obligated to pay to the plaintiff 371,017,50 won and damages for delay at the rate of 15% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from October 20, 2016 to the date of full payment, which is the day following the delivery of the complaint in this case. Thus, the defendant is obligated to accept the plaintiff's main claim and it is so decided as per Disposition.

The presiding judge and assistant judge;

Judges Yang Chang-hoon

Judges Park Jong-young