Supreme Court Confirms Guilt of Company and Employees for Leaking Samsung Galaxy 'Edge Panel' Technology to China

The Supreme Court has confirmed the guilt of Toptec Co., Ltd. and its executives, who were indicted on charges of leaking Samsung Display's (hereinafter Samsung) 'Edge Panel' technology, which implements the curved corners of mobile phone screens, to China.

On the 13th, the 2nd Division of the Supreme Court (Presiding Justice Min Yu-sook) upheld the original ruling that sentenced former Toptec CEO A to three years in prison for violating the Unfair Competition Prevention Act, including the disclosure of trade secrets, under charges of violating the Industrial Technology Protection Act and the Unfair Competition Prevention Act. Additionally, two other Toptec executives, including B, were sentenced to two years in prison.

Supreme Court in Seocho-dong, Seoul.

The remaining executives who received suspended sentences or fines were also confirmed guilty. Under the joint penalty provision, two companies including Toptec, which were jointly indicted, were each fined 100 million won.

A and eight others were indicted on charges of leaking trade secret materials such as flexible OLED edge panel 3D lamination-related equipment specifications and panel drawings received from Samsung in April 2018 to company B, which they established, and then transferring some of these to two Chinese companies. They were also charged with manufacturing 24 3D lamination devices at company B using drawings received from Samsung between May and August of the same year, exporting 16 of these devices to Chinese companies, and attempting to export 8 more.

In the first trial, the court ruled that "the information identified as trade secrets in the indictment had been disclosed through patents or was known in the same industry, and a significant portion was developed or proposed by Toptec," and that "even if Toptec independently used the information to manufacture and sell equipment, it cannot be considered illegal," thus acquitting all defendants.

However, the appellate court overturned this decision, stating, "Contrary to the lower court's judgment, the technology in this case qualifies as 'advanced technology' as announced by the Ministry of Trade, Industry and Energy, and cannot be considered publicly disclosed information," and "the defendants had an obligation to maintain trade secrets by contract or tacit agreement, but illegally disclosed them to Chinese companies."

Nevertheless, the court maintained the first trial's acquittal on charges of violating the Industrial Technology Protection Act, citing insufficient evidence submitted by the prosecution to prove that the technology qualifies as advanced technology under the Act. It also acquitted the defendants of breach of trust charges related to causing damage to Toptec due to the technology leak, stating that intent was difficult to confirm, consistent with the first trial.

The 3D lamination technology leaked to China is a smartphone display designed with curved edges, and Samsung is known to have invested six years, 38 engineers, and 150 billion won in research and development of this technology.

After achieving sales of 1 trillion won in 2017, A and others anticipated a sharp decline in sales due to Samsung's reduction in equipment investment and, while considering future business strategies, decided to export equipment to Chinese display companies that were failing in panel mass production or producing low-quality products. They actively conducted export sales, including holding technical meetings with Chinese engineers.

Meanwhile, procedural flaws in the prosecution's search and seizure process to secure evidence were also raised during the trial. However, the court acknowledged that although some procedural violations occurred during the extensive seizure of electronic information, it was difficult to view the investigation as intentionally illegal or excessive, infringing on the rights of those searched or circumventing the warrant principle. Therefore, the court recognized the evidentiary validity of the collected evidence.

This content was produced with the assistance of AI translation services.