Hello, I am Attorney Eom Sang-yoon from Cheongchul Law Firm.

Today, we will discuss whether the act of providing a finished product using technical data constitutes trade secret infringement.

[Question]

Is the act of producing and providing a finished product using the trade secret-related data itself also considered trade secret infringement?

[Answer]

Generally, a finished product is not considered a trade secret in terms of being sold and distributed. However, through reverse engineering of the finished product, it is possible to reveal non-public technical data, and if the product cannot generally be considered a product in circulation, the act of providing the finished product could still be deemed as trade secret infringement, even if the finished product itself is not a trade secret.

In this regard, the Supreme Court has ruled that even if reverse engineering of a specific product is allowed and obtaining technical information through reverse engineering is possible, such circumstances alone do not impede that technical information from being considered a trade secret (Supreme Court 96Do16605). This means that the allowance and possibility of reverse engineering do not negate the non-disclosure or confidentiality of the technical data represented by the product.

Moreover, among the lower court decisions regarding the prohibition of trade secret infringement, there have been cases where the act of providing a finished product was judged to constitute trade secret infringement. For example,

The Daejeon District Court Cheonan Branch ruled in a case where the debtor used technical information provided to produce products received by subcontracting from the creditor to manufacture similar products and supply them to another company, stating that "This product contains information about its individual parts and assembly; therefore, acquiring this product would allow for some degree of revelation of the technical information through reverse engineering, even if it is not complete, and it would at least shorten the time to develop the product. Thus, the act of the debtor providing this product to G, who was attempting to manufacture semiconductor cleaning equipment, significantly assists G in saving time and costs involved in product manufacturing, which constitutes the use or disclosure of this technical information." Thus, it was determined that the provision of a finished product containing technical information is considered trade secret infringement (Daejeon District Court Cheonan Branch 2023Kahap10016).

Additionally, the Incheon District Court Bucheon Branch ruled that "The act of the defendant producing the defendant's product, and providing drawings, etc., to component manufacturing companies to produce it, as well as the act of supplying the defendant's product and its repair parts or components to the demand-side, the Republic of Korea, constitutes an infringement of the plaintiff's trade secrets," thereby presuming that the provision of finished products could lead to trade secret infringement (Incheon District Court Bucheon Branch 2014Gahap4582, Seoul High Court 2015Na2009569).

However, the aforementioned cases were related to the leakage of trade secret materials, and it is deemed practically unlikely that providing a finished product would constitute trade secret infringement in cases where there is no premise of trade secret leakage.

Therefore, if an investigation or lawsuit regarding trade secret infringement is in progress, please consult with an expert to construct legal arguments and respond appropriately.

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