Korea's top court voids startup's idea-theft win, and an MOU turns out to be thin cover

South Korea's Supreme Court has overturned the appeals ruling that found Jinhaksa, a college admissions services company, had improperly used the education startup Tendom's idea for a college review service, and sent the case back for retrial ^[1]. For anyone running a small company that pitches an incumbent, the practical lesson is about what a signed memorandum and a regulator's corrective recommendation actually buy you when the matter reaches a court that asks who can prove what.

The court's Third Division, with Justice Lee Sook-yeon presiding, reversed the lower ruling that had partially favoured Tendom and remanded the case to the Seoul High Court, according to legal circles cited by Seoul Economic Daily on the 16th ^[2].

The sequence matters. Tendom signed an MOU with Jinhaksa in 2018 to develop a college review service called AdCampus ^[4]. Jinhaksa launched a similar service, CampusReview, in April 2019 ^[5], roughly a year after the MOU ^[3]. Tendom reported the company to the Korean Intellectual Property Office for unfair competition in 2020 ^[6], and in 2021 KIPO issued a corrective recommendation that acknowledged improper use of the idea and advised monetary compensation ^[7]. Jinhaksa did not comply. It filed suit seeking confirmation that it owed no debt, and Tendom counterclaimed for an injunction and damages ^[8][3].

The trial court sided with Jinhaksa, finding no damages arising from unfair competition or wrongful acts ^[9]. The appeals court reversed, recognised unfair competition and ordered Jinhaksa to pay 20 million won, about $14,500 ^[10].

The Supreme Court's objection was evidentiary rather than conceptual. Tendom argued that Jinhaksa had used its review data and API, but the court said the startup failed to present evidence that any of its numerous review entries had been used in Jinhaksa's service ^[11]. Jinhaksa, by contrast, submitted evidence that it had collected review data directly through four events held between April 2019 and January 2020, around the launch ^[12]. The court said Jinhaksa had run a review service for online lectures since around 2016 and one for hiring-related companies since around 2017, giving a strong basis to conclude it had its own know-how ^[13]; the hiring service predates the MOU by roughly a year ^[4]. It added that the disputed service's presentation and structure were largely similar to that 2017 service, leaving room to view it as built on Jinhaksa's own technology and data ^[14]. On that record, Tendom's evidence did not show the two services were substantially identical or similar enough to create a likelihood of confusion ^[15], and the lower court had misunderstood the legal principles on establishing unfair competition and on the burden of proof ^[16].

Two things are worth extracting for operators. First, the KIPO corrective recommendation was not self-enforcing: Jinhaksa declined it and went to court instead ^[7][8]. Second, the cost curve is brutal. About eight years have passed between the MOU and this remand ^[1], and about five since the recommendation ^[2], with a best case so far of 20 million won ^[10].

Watch the Seoul High Court retrial ^[1][2], and specifically whether Tendom can put forward entry-level evidence that its review records appeared in CampusReview, since that absence is what the Supreme Court fixed on ^[11]. Watch also whether an incumbent's pre-existing product line becomes the standard answer to idea-misappropriation claims in Korea, given how much weight the court put on Jinhaksa's 2016 and 2017 services ^[13][14].