Toptec execs have jail verdicts upheld over China leaks

Toptec's facilities in Asan [TOPTEC]

Korea’s Supreme Court has upheld the three-year jail term of the ex-CEO of Toptec, finding him guilty of leaking confidential technology from Samsung Display’s edge panel to China.

Two other ex-executives at Toptec were also sentenced to two-year jail terms and had them upheld on Thursday while the company and another related entity were each slapped with a 100 million won fine ($78,391).

Toptec, a Kosdaq-listed panel equipment manufacturer, worked with Samsung Display in 2014 to mass produce what it called “edge panel.” During the process, the company had confidential information shared with it, including the test product and a blueprint.

In 2018, the accused was prosecuted for allegedly setting up his own company in Korea and using it to indirectly spill trade secrets to Chinese firms. The ex-CEO also faced charges of exporting 3D lamination equipment based on the blueprint shared by Samsung Display.

The 3D lamination technology is considered key in producing the edge panel which is flexible and can be used for the curved edges of Samsung Electronics’ Galaxy smartphone series.

It took six years, 38 engineers and 150 billion won of research funds for Samsung Display to develop the edge technology.

A lower court in 2021 ruled in favor of the accused, saying that Toptec had the right to use the information because the patented information was already disclosed or known in the business field while Toptec had also contributed to its development.

However, earlier this year the appellate court overruled the verdict, saying that it had misjudged the relevant facts and legal principles.

“The technology, in this case, cannot be seen as a disclosed one as the Industry Ministry specifically categorized it as ‘advanced technology’,” the court said.

“Although the trade secrets are shared, spilling the data to a third party without the consent from the partner can be seen as an infringement of trade secrets.”

It continued by saying that “Samsung Display and Toptec even signed a confidential agreement to not spill the trade secret to a third party... It is a severe infringement on Samsung Display’s effort to protect its technology.”

The Supreme Court on Thursday upheld most of the verdict from the appellate court except for the charge of violating the law on protecting the industry technology, saying that the accused technology was widely known in the industry at the time and was not protected by the state.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]