The game "Dark and Darker," released by Ironmace, a studio founded by former Nexon employees, was found to have infringed Nexon's trade secrets. Ironmace must compensate Nexon for the damages. Nexon claimed the game infringed its copyright, but the court did not recognize that.
The Supreme Court's Second Division (Presiding Justice Park Young-jae) on the 30th upheld the lower court ruling that reached this conclusion in Nexon Korea's appeal in its lawsuit seeking to ban trade secret and copyright infringement against Ironmace and Chief Executive Choi Joo-hyun, among others. Ironmace and Choi must pay 5.76464 billion won in damages to Nexon.
Choi previously worked at Nexon's New Development Headquarters as the Head of Team for "Project P3." Choi leaked game development materials and encouraged team members to change jobs, leading to dismissal from Nexon. Choi later founded Ironmace with A, who had worked as the same team's part lead, and developed and released Dark and Darker.
Nexon filed suit in 2021, saying Choi leaked unreleased game source code and data and used the diverted materials to make Dark and Darker.
In the first trial, the court ruled that Ironmace infringed Nexon's trade secrets by leaking information such as P3 components and combinations, and ordered 8.5 billion won in compensation. However, it did not recognize copyright infringement, finding no substantial similarity between Dark and Darker and Nexon's P3 game as of June 2021.
The second trial also recognized Ironmace's infringement of Nexon's trade secrets. However, the compensation was reduced to 5.76 billion won in consideration of the actual damage. As in the first trial, Nexon's copyright infringement claim was not accepted.
The appellate court said, "Comparing the 'P3 game as of June 30, 2021,' implemented as of Choi's resignation, with Dark and Darker, there is no substantial similarity due to differences not only in individual components but also in the organic combination of game elements arising from differences in genre," and rejected Nexon's copyright infringement claim.
Specifically, the appellate court found that the source code, graphic resources, and game design documents of the P3 game obtained by Choi and others were identified as trade secrets as an integrated whole organically combined for a single game. It then determined that there was trade secret misappropriation, considering the confidentiality obligations of Choi and others, the time interval up to the preparation for founding Ironmace, and the game development period.
On the copyright claim, the appellate court noted that the game genres are different. It pointed out that the P3 game is in the "battle royale genre," in which players keep fighting until one remains within a single game, and there is no concept of escaping mid-game before it ends. Also, items acquired during the game all disappear after it ends.
By contrast, Dark and Darker allows multiple players to fight each other in the game but also to escape mid-game, which it viewed as a decisive difference from P3. The game's objective is item acquisition, and if a player escapes safely without dying in the game, the items remain with the player.
The appellate court said, "Because of these genre differences, terrain and object placement, monster placement, and level design differ, and the organic combination relationships among game components must also differ."
Both Nexon and Ironmace appealed, but the Supreme Court dismissed the appeals, finding no error in the lower court's judgment.
A Supreme Court official said, "This ruling deeply analyzed components including the game genre and, based on that, determined whether there was copyright infringement between games."
The official added, "Job changes are common in the game industry, and it is not uncommon to found a startup right after leaving a company, so disputes over trade secrets are frequent," and said, "This ruling is significant in that it presents standards for identifying trade secrets, trade secret status, and determining acts of trade secret infringement in similar cases within the game industry."