CONTENTS
- 1. Technology Leakage | Overview of the Case
- 2. Technology Leakage | The Supreme Court's Determination
- - Whether It Constitutes Industrial Technology: The Standard Is the Potential to Contribute to Industrial Competitiveness
- - The Meaning of 'Use': Reducing Experiment and Development Cost May Also Be Found to Constitute Use
- - Requirements for a Specific-Intent Crime: Intent Cannot Be Presumed From the Fact of Leakage Alone
- 3. Technology Leakage | Criteria for Applying Charges of Industrial Technology Leakage
- - Liability Structure for Representatives, Executives, Employees, and Working-Level Staff
- 4. Technology Leakage | A Practical Checklist for Companies
1. Technology Leakage | Overview of the Case
This case concerning technology leakage involved a researcher who, while engaged in development work related to glass frit for solar cells and paste for OLED encapsulation (sealing), took out experimental data, composition tables, batch sheets, and similar materials during employment by storing them on a USB drive or printing them, and was then indicted on charges of having referred to those materials while performing related work at another company after changing jobs.
The lower courts (first and second instance) found the alleged violation of the Industrial Technology Protection Act not guilty, reasoning that "the leaked materials are difficult to regard as the final composition ratios required for manufacturing a finished product, and do not amount to information that is unique and indispensable."
The Supreme Court, however, found that the lower courts' very framework for determining what constitutes 'industrial technology' was excessively narrow, and reversed and remanded the acquittal on the industrial technology leakage portion.
As to the use portion (reduction of time and cost), the Court maintained the not-guilty conclusion, finding that there was no proof of the crime due to a lack of specific evidence.
2. Technology Leakage | The Supreme Court's Determination
The Supreme Court determined this matter as follows.
Whether It Constitutes Industrial Technology: The Standard Is the Potential to Contribute to Industrial Competitiveness
The Supreme Court rejected the approach of narrowing the determination of 'industrial technology' protected by the Industrial Technology Protection Act to whether the information is indispensable for manufacturing a finished product.
Instead, it clarified the standard that the determination must be made specifically and individually, taking comprehensive account of whether the information concerned falls within the following matters, among others.
· Whether it is closely related to advanced technology
· Whether, through that information, the institution concerned holds the potential to contribute to value creation and industrial development and can thereby possess industrial competitiveness
The Court found that the materials at issue in this case (experimental data, batch sheets, composition information, and the like) were not disclosed to the public, were ordinarily difficult to obtain except through the institution concerned, and were information that the company had accumulated by investing substantial time, effort, and cost, and that they were therefore highly likely to constitute industrial technology.
Accordingly, the Court reversed, holding that it was unlawful for the lower court to have found the charge not guilty, denying that the materials constituted industrial technology and without sufficiently examining the purpose, circumstances, and the like, thereby failing to conduct the necessary deliberation.
The Meaning of 'Use': Reducing Experiment and Development Cost May Also Be Found to Constitute Use
The Supreme Court regarded 'use,' among acts of infringing industrial technology, as a specifically identifiable act of directly or indirectly utilizing industrial technology for research, development, production, and the like in accordance with its original purpose.
It then held that not only imitative production but also cases of reducing trial and error through reference or omitting necessary experiments, thereby reducing development time and cost, constitute use.
In this case, however, the Court found that the evidence submitted by the prosecutor alone made it difficult to conclude that the defendant had actually reduced time and cost in developing a particular product, and therefore held that there was no proof of the crime as to the 'use' charge.
Requirements for a Specific-Intent Crime: Intent Cannot Be Presumed From the Fact of Leakage Alone
A charge of violating the Industrial Technology Protection Act is a specific-intent crime that requires, in addition to general intent, the 'purpose of obtaining an unlawful benefit or of causing damage to the institution concerned,' and this must be proven by the prosecutor.
The Supreme Court held that the mere fact that the actor recognized the information to be industrial technology and carried out the act of leakage must not be treated as automatically establishing such purpose.
At the same time, it reaffirmed the standard that, where direct evidence is lacking, the determination must be made reasonably in light of generally accepted social norms, taking comprehensive account of factors such as the actor's occupation and career, the motive and circumstances, the means and method, and the relationship between the institution concerned and any third party.
3. Technology Leakage | Criteria for Applying Charges of Industrial Technology Leakage
The message this judgment sends to businesses is clear.
It is that 'time and cost,' rather than the 'finished product,' may become the axis of legal evaluation.
Accordingly, acts such as the following may accumulate legal risk.
- A former employee, based on materials in their possession, omitting experimental design or excluding in advance conditions with a high probability of failure
- A competitor narrowing the search range for blending and firing conditions, and the like, using accumulated data
- Securing process values (batch sheets, graphs, evaluation results) rather than final values, thereby shortening the development period
In other words, from a company's perspective, the future issue may shift from 'whether a new product was made from the leaked materials' to 'what was saved' in the development process.
Liability Structure for Representatives, Executives, Employees, and Working-Level Staff
Category | Key Practical Points of Assessment | Materials the Company Should Prepare |
Representative and management | · Existence of a control and supervision system · Measures taken after becoming aware of the possibility of a violation · Whether there was instruction or acquiescence | · Internal control regulations · Records of access-authorization approvals · Logs of follow-up measures |
Executives and team leaders | · Approval, aiding, or acquiescence · Violation of the external-provision process · Involvement in project decision-making | · Meeting minutes and approval lines · External-removal approval forms · Communications with partner companies |
Working-level staff and researchers | · Possibility of awareness of the duty of confidentiality · Specificity of the removal conduct (email, USB, printout) · The substance of use or reference | · Security pledges and training records · Download and removal logs · Evidence of the scope of work |
The corporation (company) | · The combination of individual conduct and company benefit · Absence of a management system · Inadequate measures to prevent recurrence | · Compliance system · Training and audit results · Recurrence-prevention plan |
In technology leakage cases, the initial response is very important.
If any one of the following applies, you should shift your strategy not at the stage of after-the-fact explanation but before, or immediately after, an investigation begins.
- Where circumstances suggesting the removal of materials related to a former employee or partner company have been discovered, or an internal report has been received
- Where a request for submission of materials or a notice of questioning as a reference witness has arrived from an investigative agency or institution (company or research institute)
- Where forensic analysis (email, PC, server) is scheduled and logs and access records may become evidence
4. Technology Leakage | A Practical Checklist for Companies
In technology leakage cases, Daeryun's assistance is not limited to criminal defense.
Area of Assistance | Main Content |
Diagnosis of the matter | · Whether the leaked materials constitute 'industrial technology' · Non-disclosure and the circumstances of acquisition · Detailed review of the connection to advanced technology |
Evidence strategy | · Forensic-based analysis of removal routes and circumstances of use · Optimization of the scope and format of materials submitted · Control of statement risk |
Separation of liability | · Breaking down the liability structure of individuals, the organization, and the corporation · Reconstructing the degree of involvement of each officer and employee · Managing joint-penalty and derivative risks |
Response design | · Responding not only to the investigation and trial but also to clients and ordering parties · Improving internal controls · Supporting the establishment of a recurrence-prevention system |
Beyond this, the firm aligns the facts and the legal principles in a balanced manner, on the premise of the public-interest values of protecting national technology and safeguarding industrial competitiveness, so that companies' legitimate research and development activities are not unnecessarily chilled.
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