Korean Supreme Court Convicts Taiwanese Company for Trade Secret Theft: Key Lessons for Global Businesses

In August of 2025, the Supreme Court of Korea’s Second Criminal Division (Case No. 2022Do8664) issued a landmark ruling against Everlight Electronics, a Taiwanese LED manufacturer, for stealing the trade secrets of Seoul Semiconductor, a Korean competitor. The Court imposed a fine of KRW 60 million under the Industrial Technology Protection Act and the Unfair Competition Prevention Act of Korea, affirming that Korean courts may exercise jurisdiction over foreign corporations when unlawful conduct occurs in Korea.

The case is particularly important for foreign capital-invested companies doing business in Korea, as well as for companies with any interaction with Korean companies or those in competition with these companies.

Taiwanese Company Convicted
of Trade Secret Theft in Korea

This case illustrates Korea’s increasingly assertive stance in protecting its industrial technologies, with profound implications for multinational corporations, compliance teams, and cross-border hiring practices. We recommend consulting with your lawyer and having them conduct a comprehensive compliance audit. Risks in all areas of law, including most notably labor, employment, industrial accident, tax, and environmental law, have substantially increased under the present administration.

Background: How the Theft Occurred

In 2016, three employees of Seoul Semiconductor left the company to join Everlight Electronics. Before their departure, they were alleged to have:

• Photographed proprietary documents,
• Copied confidential files, and
• Extracted sensitive data using USB drives.

These trade secrets were allegedly utilized to the benefit of Everlight. Everlight claimed the company had no knowledge of the employees utilizing any proprietary files or documents to the benefit of Everlight.

Korean prosecutors indicted the three employees, each of whom received suspended prison sentences (no jail sentences). Separately, Everlight Electronics was prosecuted under Korea’s dual penalty system, which allows corporations to be held liable alongside individuals.

Everlight’s Defense Arguments

Everlight challenged its liability on three grounds:

1. Jurisdiction: It argued that, as a foreign company, it could not be prosecuted in Korea because the alleged misconduct occurred overseas.
2. Procedural Defects: The company alleged flaws in the indictment.
3. Due Care: Everlight claimed it had exercised appropriate supervision and could not be held responsible for the misconduct of its employees.

Korean Court Rulings

• Trial Court/Court of First Instance: Held that jurisdiction existed because the trade secret leak originated in Korea. The court of first instance rejected Everlight’s procedural arguments and found the company negligent in supervising its employees. The company was fined KRW 50 million.
• Appellate Court: Increased the fine to KRW 60 million and expanded the definition of “industrial technology” under the Industrial Technology Protection Act of Korea to cover a wider scope of proprietary information. We shall write about this in a follow-up post.
• Supreme Court of Korea: Dismissed Everlight’s appeal, confirming that:
  • Jurisdiction lies with Korean courts when the initial misappropriation occurs in Korea, even if the use takes place abroad.
  • Corporations may be held liable for the actions of employees under the “dual penalty system.”
  • The broader interpretation of “industrial technology” is valid, strengthening protections for Korean businesses.

Why the Case Matters

1. Extraterritorial Jurisdiction
Korea will assert jurisdiction over foreign corporations if any part of a wrongful act, such as data leakage, occurs within its territory. Thus, if any data is alleged to be obtained from within Korea, the Korean courts shall have jurisdiction.

2. Corporate Criminal Liability
The dual penalty regime underscores the importance of companies maintaining robust compliance systems and conducting regular compliance audits. Employers cannot simply attribute wrongdoing to employees and escape liability.

3. Broad Scope of “Industrial Technology”
Korean courts interpret industrial technology broadly, particularly in strategic sectors such as semiconductors, biotechnology, defense, automotive, shipbuilding, and green energy.

4. Risks in Cross-Border Hiring
Hiring employees away from Korean companies carries heightened legal risks if confidential information is misappropriated (or even alleged to be misappropriated), even if it is done inadvertently.

Practical Guidance for Businesses

• Strengthen Compliance Programs: Multinationals operating in Korea or in competition with Korean companies must implement training, monitoring, and regular compliance audits.
• Conduct Onboarding Due Diligence: When hiring employees from Korean competitors, companies should confirm that no trade secrets are solicited or transferred.
• Prepare for Cross-Border Litigation: Corporations should be aware that Korean judgments are enforceable in many jurisdictions, including the U.S. and the E.U.
• Monitor Legislative Trends: Korea continues to tighten its Korean Industrial Technology Protection Act and related enforcement measures, particularly in high-tech industries.

Frequently Asked Questions (FAQ)

Q1: Can Korean courts prosecute foreign companies?
Yes. If trade secrets are leaked in Korea, Korean courts have jurisdiction even if those secrets are later exploited overseas.

Q2: What is the “dual penalty system” in Korea?
It allows both the individual employee and the employer corporation to face criminal liability for the theft of trade secrets.

Q3: How does Korea define “industrial technology”?
Broadly. It includes proprietary technical information that provides a competitive advantage, with a strong emphasis on strategic industries.

Q4: What risks arise when hiring from Korean competitors?
Without safeguards, companies risk criminal liability, civil damages, and reputational harm if new hires bring trade secrets from former employers.

Q5: How can IPG Legal help?
We advise on trade secret litigation, compliance frameworks, technology transfer disputes, and criminal defense in Korea. Our team has extensive experience assisting multinational corporations and foreign investors in managing cross-border intellectual property, employment, industrial, and environmental risks.

IPG Legal’s Perspective

The Everlight case is a clear signal: Korea is determined to defend its technological assets through vigorous enforcement of trade secret and industrial technology laws. Foreign corporations cannot assume they are beyond the reach of Korean courts simply because they are based overseas.

At IPG Legal, we regularly represent clients in trade secret disputes, industrial technology protection cases, and compliance matters. With decades of experience in cross-border litigation and regulatory risk, we are uniquely positioned to assist foreign businesses in navigating Korea’s complex and ever-changing legal environment. For tailored advice, please contact IPG Legal.

by Sean Hayes

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services.

If you would like a consultation with Sean Hayes from IPG Legal, please schedule a call at:  Schedule a Call with Attorney Sean Hayes.