Recent Developments

In 2021, Versum Materials Korea (“Versum”) filed a patent invalidation action against Tri Chemical Laboratories (“Tri Chemical”) regarding a thin film formation material patent. Lee & Ko, representing Tri Chemical, the patentee, successfully defended the patent’s validity at the Intellectual Property Trial and Appeal Board (“IPTAB”) in July 2023. Although Versum subsequently filed an appeal with the IP High Court to revoke this decision, the IP High Court also upheld the patent’s validity on August 22, 2024 (prevailing on all claims), and this ruling was rendered final and conclusive on September 14, 2024.

The patent at issue directs to Cp hafnium compounds used as thin film formation materials, which are representative high-dielectric materials used to form insulating films at the ends of semiconductor DRAM capacitors or metal gates. This patent is considered so significant in the industry that it is valued at over KRW 1 trillion.

Versum argued that the patent lacked inventiveness as the patented compound was structurally similar to compounds disclosed in prior art references and could be easily derived. In response, Lee & Ko not only successfully articulated the legal principle that in the chemical field, even if compounds show structural similarities, the patent’s inventiveness cannot be readily denied if there are unpredictable and significant differences in effects. Lee & Ko also clearly demonstrated these differences by conducting and presenting comprehensive comparative experiments between the patented compound and prior art compounds.

As a result, both the IPTAB and the Patent Court determined that the patent could not be invalidated due to its unpredictable and significant effects compared to prior art compounds, successfully defending the patentee’s rights. The ruling serves as an important precedent regarding the finding of inventiveness in compound-related inventions.

This case attests to Lee & Ko’s Intellectual Property Group’s superb capabilities and expertise, as it successfully protected an enormously crucial patent from invalidation attempts through more than three years of persuasive arguments in hearings, grounded in  thorough technical review and legal analysis.
 

Lee & Ko Law secured a landslide victory (prevailing on all claims) on August 21, 2024 in a trade secret and copyright infringement lawsuit filed on June 29, 2020 on behalf of Ajinextek, a KOSDAQ-listed company that manufactures motion control chips and equipment for factory automation. The lawsuit was filed against former officers and employees who had misappropriated motion control technology-related source code files and were manufacturing and selling motion controllers using these files. The ruling was rendered final and conclusive on September 6, 2024.

In the related criminal case, (due to investigative authorities notifying the suspects before conducting the search and seizure), only seven source code files were seized from the former officers and employees, making it impossible to directly compare the source codes between the two companies. In response, Lee & Ko sought to prove trade secret and copyright infringement by analyzing the similarities between pseudocodes obtained through decompiling the core executable files of both companies’ motion control equipment software.

The Korea Copyright Commission conducted an appraisal, which showed that the quantitative similarity of pseudocodes for each executable file was relatively low at around 10%. However, Lee & Ko successfully argued and proved through detailed technical analysis that when pseudocodes were similar, their corresponding source codes were nearly identical, and that there were multiple qualitative similarities that could not exist in the first place, unless the source code had been misappropriated. As a result, the court recognized the trade secret and copyright infringement by the former officers and employees, ordering a complete ban on the use, disclosure, production and sale of source codes and executable files as well as their destruction and fully awarded the claimed damages of KRW 100 million (as part of the total claim).

This case stands as a rare example where trade secret and copyright infringement of software programs was fully recognized without direct source code comparison, achieved through more than four years of strong advocacy in hearings, based on thorough technical review and legal analysis. It exemplifies the outstanding capabilities and expertise of Lee & Ko’s Intellectual Property Group, gained from their extensive experience in handling numerous software-related trade secret and copyright infringement cases.

In a trade secret misappropriation lawsuit brought by Company A, a manufacturer of analytical devices for bone density and body composition, against its former employees and Company B founded by the former employees, Lee & Ko’s IP Practice Group successfully defended Company B and the former employees and obtained a court decision in favor of the defendants on all claims. 

Before this civil lawsuit, Company A had filed a criminal complaint against Company B and the former employees for trade secret misappropriation. During the criminal investigation, Company B’s product source code was found to contain portions that are similar to Company A’s product source code, which led to an indictment of Company B and the former employees. Company A then filed a preliminary injunction action against the defendants, seeking prohibition of trade secret misappropriation. As the defendant’s legal counsel, Lee & Ko conducted a thorough analysis of the two companies’ products, and showed that there were overall differences between the two products, from basic working principles to specific algorithms, and that the similar portions of the two products’ source codes were already disclosed in the public domain. Lee & Ko also showed that Company A failed to protect its source codes as a trade secret. As a result, Lee & Ko obtained an acquittal for Company B and the former employees in the criminal action and a court decision dismissing the preliminary injunction request in the civil lawsuit.

After this double loss, Company A additionally claimed copyright infringement of its computer software in the civil lawsuit. In response, Lee & Ko persuasively explained to the court that the source codes at issue were in fact taken from the public domain (such as dissertations) and that Company B did not use Company A’s technology in its product. The court agreed, and found in favor of the defendants on all claims, dismissing every claim raised by Company A in the complaint.

While this case started in unfavorable circumstances, with similarity found between the two companies’ source codes and the defendants having been criminally indicted, Lee & Ko’s IP Practice Group was able to reverse the tides and obtain a triple win, in the criminal case, the preliminary injunction case and finally the copyright infringement case, which nicely illustrates the prowess and expertise of Lee & Ko’s IP Practice Group.