Supreme Court rules trade secret retention before law change not punishable

The Supreme Court ruled that retaining trade secrets after a demand for their return cannot be punished if the possession began before the relevant legal revision took effect, citing the constitutional prohibition on retroactive criminal statutes.

The court overturned parts of a lower court verdict involving two defendants, remanding the case to the Suwon District Court while dismissing prosecutors' appeals. The ruling was issued on April 30 in case number 2025Do21522.

At issue was whether holding onto trade secrets constituted a crime under a provision added to the Unfair Competition Prevention and Trade Secret Protection Act on January 8, 2019, and enforced starting July 9 of that year. Prior to this revision, the law penalized using or leaking secrets abroad but did not explicitly criminalize merely retaining them after an owner demanded their deletion or return. The amended law specifically defined continuing to hold secrets after such a demand as a punishable offense.

The justices clarified that applying the new penalty to acts of retention that started before the enforcement date would violate the ban on ex post facto laws enshrined in the Constitution and the Criminal Act. The court held that even if the possession continued after the law took effect, punishing the initial act of retention prior to the enforcement date remains prohibited.

The underlying case involved allegations regarding hydrogen fuel cell system stack manufacturing technology and equipment procurement specifications. The defendants were charged with violations of the Industrial Technology Leakage Prevention and Protection Act, breach of fiduciary duty, and unfair competition.