"Use and Acquisition/Disclosure of Trade Secrets Constitute Separate Offenses"

Remand in Samsung Electronics Trade Secret Leak Case

The Supreme Court has ruled that the establishment of the offenses of using trade secrets and of acquiring or disclosing trade secrets must be examined separately. On January 15, the Supreme Court’s Third Division for Criminal Matters (Presiding Justice Lee Sukyeon) overturned the lower court’s ruling that had acquitted former Samsung Electronics department head Mr. Kim and others of the charge of acquiring and disclosing trade secrets in a case involving alleged violations of the Unfair Competition Prevention Act, and remanded the case to the Seoul High Court (2025Do13231).

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[Facts of the Case]

In December 2023, prosecutors indicted Mr. Kim and others on charges of unlawfully leaking process information on 18-nanometer DRAM semiconductors, which constitutes a national core technology of Samsung Electronics. The information was used in the product development of the Chinese company Changxin Memory Technologies (CXMT). Another defendant, Mr. Bang, is accused of conspiring with Mr. Kim in 2022 to leak semiconductor deposition equipment design technology belonging to Company A, a Samsung Electronics partner company.

[Lower Court Rulings]

At first instance, the court sentenced Mr. Kim to seven years in prison and a fine of 200 million won, and sentenced Mr. Bang to two years and six months in prison. However, the first-instance court acquitted the defendants on the charges of acquiring and disclosing trade secrets with respect to some of the materials. The court viewed the act of exchanging the trade secrets that each defendant had acquired as a means for co-perpetrators to use the trade secrets among themselves. It held that this could not be characterized as a disclosure of trade secrets to a third party or an acquisition of trade secrets from a third party.

On appeal, the court sentenced Mr. Kim to six years in prison and a fine of 200 million won. In doing so, it took into account that, after being dismissed from the company where he had worked, he found it difficult to secure reemployment in Korea and thus took a job at a Chinese company to support his family. Mr. Bang received the same sentence as in the first instance, two years and six months in prison. The appellate court upheld the first-instance acquittal on the charges of acquiring and disclosing trade secrets in relation to some of the materials.

[Supreme Court Ruling]

The Supreme Court held that the offenses of acquiring, using, and disclosing trade secrets can each be established independently and therefore reversed and remanded the case. It pointed out that, where parties exchange trade secrets and then proceed to the stage of attempting to use them but do not complete the act, only the attempted offense of violating Article 18 of the Unfair Competition Prevention Act is established, which allows for mitigation of punishment under the Criminal Act. By contrast, where parties merely share the trade secrets without conspiring to use them, the consummated offense of violating the same Act may be established, and mitigation may not be available. The Court noted that, in such circumstances, an imbalance arises in which those who have proceeded to the stage of attempting to use the trade secrets are punished more lightly. An attempted offense is a crime that is established when a person sets out to commit a crime but fails to achieve its purpose. A consummated offense is a crime in which the constituent elements are fully satisfied after commencement and execution of the criminal act.

Reporter Lee Sangwoo, The Legal Times

※This article is based on content supplied by Law Times.