Supreme Court Overturns Appeals Court Ruling Finding Jinhaksa Misappropriated Startup's Performance

The Supreme Court has overturned an appellate court ruling that found Jinhaksa, an admissions information company, guilty of unauthorized use of performance by the startup Tandem in a legal battle over the development of a college review service.

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

The Supreme Court's Third Division (presiding Justice Lee Sook-yeon) recently reversed part of the lower court ruling in a negative declaratory suit filed by Jinhaksa and a countersuit filed by Tandem seeking an injunction against unfair competition and damages, sending the case back to the Seoul High Court.

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

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

In 2020, Tandem reported Jinhaksa to the Korean Intellectual Property Office for unfair competition, claiming that Jinhaksa had unauthorizedly used its review data and application programming interface (API) to develop a similar service.

Review data consists of personal accounts left by current college students about their universities and departments, while an API is an interface that allows information stored on Tandem's servers to be queried directly from Jinhaksa's servers.

In 2021, the Korean Intellectual Property Office recognized Jinhaksa's unauthorized use of review data as an act of unfair competition and recommended the payment of royalties.

Failing to comply, Jinhaksa filed a lawsuit against Tandem to confirm the non-existence of debt, prompting Tandem to file a countersuit seeking damages and an injunction against unfair competition.

The first trial dismissed all of Tandem's counterclaims and ruled that Jinhaksa had no debt.

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 overturned the appellate court's decision once again.

The Supreme Court acknowledged that Tandem's review data falls under the category of "achievements created through substantial investment or effort" under the Unfair Competition Prevention Act.

However, it ruled that Tandem's API was already widely known in the college review service sector prior to Tandem's service and merely constituted elements typically found in APIs performing similar functions, thus failing to qualify as a protected achievement.

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

On the other hand, Jinhaksa submitted relevant evidence showing that it collected review data directly through four events following the launch of its service and incurred expenses for prize giveaways.

The Supreme Court noted that there is a strong possibility Jinhaksa possessed its own know-how regarding technology and data processing methods, given that it had already provided review services for online lectures and other subjects 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 misappropriated achievements 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.