Supreme Court: "Technology More Than 10 Years Old May Still Be Protected if Competitive"

Appeals Court: "No Liability After 10 Years" ... Supreme Court Overturns Ruling

The Supreme Court has ruled that it is difficult to set a uniform period, such as “10 years,” for protecting technology that has been copied from another party. The ruling suggests that even old technology may still qualify for protection if it remains competitive.

Supreme Court in Seocho-gu, Seoul. Yonhap News.

According to legal sources on Nov. 2, the Supreme Court’s Third Division, with Justice Eom Sang-pil presiding, recently overturned part of a lower court ruling and sent the case back to the Daejeon High Court in an appeal over a lawsuit filed by French transformer manufacturer Company A against domestic transformer manufacturer Company B, seeking to prohibit unfair competition and other relief.

Company A signed a contract with Company B in 2010 to supply transformers for railway vehicles. By early 2013, it had delivered 63 transformers and design drawings to Company B. The drawings stated that they could not be used without Company A’s approval.

Company B used the drawings to make and sell transformers that were almost identical to Company A’s products. It won contracts four times between 2013 and 2021. Company A filed a lawsuit seeking to stop the sales and recover approximately 3 billion won in damages.

Both the first and second trials found that Company B had used Company A’s technology without authorization. The Unfair Competition Prevention Act prohibits using, without permission, the results created by another party through substantial investment and effort in a way that infringes on that party’s interests.

The key issue was how long the technology should be protected. The appellate court held that technology protection was subject to a time limit, which it set at 10 years from early 2011, when Company A first delivered the products. It ruled that Company B was not liable for the fourth contract, signed in May 2021, because the 10-year period had expired. It set damages at approximately 800 million won, considering only the first three contracts.

The Supreme Court rejected that conclusion, finding that the appellate court was wrong to deny liability for the fourth contract. Only two months separated the completion of deliveries under the third and fourth contracts, and there was little basis to conclude that transformer technology or Company B’s technological capabilities had changed during that time.

The court stated, “It is difficult to say that the period of protection can be limited uniformly or that the protection period had already expired by the time of the fourth delivery,” and ruled that “there is a strong basis for finding that the results continued to be competitive and worthy of protection even after 10 years.”

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