Supreme Court Overturns Appellate Ruling That Acknowledged Jinhaksa's Misappropriation of Startup's Performance

In a legal battle between admissions information company Jinhaksa and startup Tandem over the development of a "university review service," the appellate court's ruling recognizing Jinhaksa's unauthorized use of the startup's achievements has been overturned by the Supreme Court.

The ruling is based on the principle that the burden of proof regarding the misappropriation of another party's performance lies with the party claiming it.

The Supreme Court's Third Division (Presiding Justice Lee Sook-yeon) recently reversed part of the original appellate ruling in a lawsuit filed by Jinhaksa seeking confirmation of non-existence of debt, as well as Tandem's counter-lawsuit demanding an injunction against unfair competition and damages, and sent the case back to the Seoul High Court.

Tandem, a startup operating the university review service "AdCampus," signed a business cooperation agreement with Jinhaksa in 2018 regarding the development of a university review service.

However, the following year, Jinhaksa launched its own university review service, "Campus Review," without notifying Tandem.

Claiming that Jinhaksa had unauthorizedly used its review data and API (Application Programming Interface) to develop a similar service, Tandem reported Jinhaksa to the Korean Intellectual Property Office (KIPO) for unfair competition in 2020.

Review data consists of firsthand accounts left by current university students about their universities and departments, while an API is an interface allowing Jinhaksa's servers to directly access information stored on Tandem's servers.

In 2021, KIPO acknowledged Jinhaksa's unfair competition regarding the unauthorized use of review data and recommended the payment of usage fees.

Refusing to comply, Jinhaksa filed a lawsuit against Tandem seeking confirmation of non-existence of debt, prompting Tandem to file a counter-suit seeking an injunction against unfair competition and claims for damages.

The first trial dismissed all of Tandem's counter-claims and ruled that no debt existed for Jinhaksa.

In contrast, the second trial ruled that Jinhaksa had unauthorizedly used Tandem's review data and API, ordering Jinhaksa to pay 20 million won in damages to Tandem.

The Supreme Court once again overturned the appellate ruling.

The Supreme Court held that Tandem's review data qualified as a "performance created through substantial investment or effort" under the Unfair Competition Prevention Act.

However, the court ruled that Tandem's API did not constitute a protected performance, noting that APIs performing similar functions were already widely known in the university review service sector prior to Tandem's service, amounting merely to standard features.

The Supreme Court pointed out that Tandem failed to submit evidence showing that even a single review data point out of its vast collection was used in the service developed by Jinhaksa.

On the other hand, Jinhaksa submitted relevant evidence showing that it had independently collected review data through four promotional events and incurred prize expenses after launching its service.

The Supreme Court also noted that there was significant room to view Jinhaksa as having its own technological capabilities and know-how regarding data processing, given that it had provided review services for online courses even before collaborating with Tandem.

Reaffirming established legal principles, the Supreme Court stated that under the Unfair Competition Prevention Act, the burden of proving whether another party has unauthorizedly used one's performance rests upon the party asserting it.

(Photo: Capture from Jinhaksa website, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.