Understanding and Protecting Trade Secrets in Business: Legal Insights and Precedents

2024-02-03 12:09:59

[미디어파인 시사칼럼] ‘Trade secret’ as defined in Article 2, Paragraph 2 of the Unfair Competition Prevention and Trade Secret Protection Act means a production method, sales method, or other business method that is not publicly known and has independent economic value, and has been kept secret through considerable effort. Refers to technical or managerial information useful for activities.

In trade secret lawsuits, infringers often argue from the developer’s point of view that the information in question is not a trade secret or a major business asset because it can be easily reverse-engineered by analyzing commercially available products. However, the mere fact that reverse engineering is possible by reverse analysis of products that can be acquired legally on the market does not mean that trade secrecy is denied or that it is not a major business asset.

If the data acquired through reverse engineering has independent economic value and meets all confidentiality requirements, reverse engineering is possible and technical information can be obtained through it, but such circumstances alone do not prevent the technical information from being regarded as a trade secret. It is the legal principle of the Supreme Court precedent that it cannot be considered to exist (see Supreme Court Decision 98Do4704, March 12, 1999, etc.), but information acquired through actual reverse engineering is recognized as a legitimate method of obtaining technical information. It cannot be said that the information was acquired illegally, and among the information that can be acquired through reverse engineering, the technology itself is simple, products implementing it are easily available on the market, and the technical information is provided by a person with knowledge and experience in the relevant technology. The position of precedent is that if it is something that can be easily acquired through reverse engineering within a few hours or days (readily ascertainable by proper means), caution should be taken in recognizing its non-public knowledge or economic usefulness.

Case law applies not only to infringement of trade secrets but also to judgment of breach of duty, as long as the information is easily obtainable through ordinary reverse engineering methods without spending considerable time, effort, and cost. Information that cannot normally be obtained except through the holder. Since it is difficult to consider that it falls under, it does not constitute a major business asset (Supreme Court decision 2018 Do4794, June 30, 2022), so it is difficult to determine whether it is a major business asset simply because reverse engineering is possible. Whether the time, effort, and cost required for reverse engineering is significant is judged differently depending on the specific facts.

In related lawsuits, the key is to prove that the information that can be acquired through reverse engineering can be easily obtained by a person with ordinary knowledge and experience with a certain amount of time, effort, and cost. (Intellectual property rights lawyer, Taerim Law Firm)

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