Supreme Court: Researcher Who Sent OLED Materials to Chinese Competitor... Breach of Duty

[Asia Economy Reporter Kim Daehyun] The Supreme Court has ruled that a senior researcher at a small and medium-sized enterprise (SME) who sent OLED materials and related files to a competing Chinese company can be punished for breach of trust in the course of business.

On the 30th, the Supreme Court's Third Division (Presiding Justice Min Yusook) announced that it overturned the lower court's ruling, which had acquitted the researcher A on some charges in the appeal trial for breach of trust and violation of the Industrial Technology Protection Act, and remanded the case to the Suwon High Court.

A, a senior researcher at company B, which develops and produces OLED materials for displays, was prosecuted for sending OLED materials and related files?core industrial technologies?to Chinese competitor company C during 2017-2018. He was also charged with evaluating the performance of C’s OLED using B’s facilities and personnel. It was investigated that C provided 6 million won as compensation for this.

The first trial ruled that "A leaked B’s industrial technology with the intention of moving to the Chinese company," and found him guilty of violating the Industrial Technology Protection Act and other charges. A was sentenced to three years in prison with a four-year probation and fined 30 million won.

However, the court acquitted him of the charge of handing over materials to company C, judging that the materials themselves did not constitute the object of breach of trust in the course of business. The evaluation of C’s materials was also acquitted, as it was "difficult to see that there was an awareness of causing damage to the company."

The second trial found him guilty even for the material evaluation part, increasing the sentence to two years in prison and a fine of 30 million won. However, it acquitted him of breach of trust charges, stating, "If the object of the crime is the property itself rather than a pecuniary benefit, breach of trust in the course of business does not apply," similarly to the first trial.

However, the Supreme Court ordered a retrial and reconsideration of the case. The court pointed out, "The materials sent by A are materials necessary for OLED production or related experiments," and "Company B would not have allowed its technology to be provided to a competitor without permission. In particular, some of these materials appear to be difficult for company C to obtain."

Furthermore, "These may correspond to trade secrets or important business assets as defined in breach of trust in the course of business," and "The lower court erred in acquitting the breach of trust charge solely because the materials sent by A were not industrial technologies as defined by the Industrial Technology Protection Act, misunderstanding the legal principles regarding the establishment of breach of trust and failing to conduct necessary investigations."