South Korea’s Supreme Court has significantly raised the criminal stakes in a major semiconductor trade secrets case involving former Samsung Electronics executives accused of leaking sensitive chip technology to China.

In a ruling handed down last month, the court found that the theft, transfer and use of trade secrets must be treated as separate criminal offences, not as a single act.

The decision overturns lower court rulings that had bundled the conduct into one charge of “use” of trade secrets.

The case centres on former Samsung and supplier employees alleged to have taken proprietary semiconductor equipment designs and 18-nanometre DRAM process data before uploading them to a network-attached storage (NAS) server.

Prosecutors say the information was then used to support chip development in China, including at ChangXin Memory Technologies (CXMT).

Lower courts had convicted key defendant Kim, a former Samsung department head, of using trade secrets overseas, sentencing him to six years’ jail and a 200 million won (US$138,000) fine.

But judges acquitted the accused of separate charges tied to acquiring and sharing the same secrets internally, reasoning that those steps were incidental to eventual use.

The Supreme Court disagreed, citing the Unfair Competition Prevention and Trade Secret Protection Act, which defines acquisition, disclosure and use as independent crimes.

It ruled that handing confidential material to an accomplice constitutes unlawful disclosure, while receiving it amounts to unlawful acquisition – regardless of whether the technology is ultimately used.

The case has been remanded to the Seoul High Court, where sentences could increase. Prosecutors have also argued the leaked DRAM process qualifies as “national core technology”, subject to strict export controls.

The tougher stance on tech protection comes as Seoul scored a separate legal win tied to Samsung.

This week, a British court overturned a US$107.8 million arbitration award against Korea in an investor-state dispute brought by US hedge fund Elliott Management over the 2015 Samsung C&T–Cheil Industries merger.

The UK High Court ruled that the National Pension Service’s vote backing the merger did not amount to state action under the Korea-US FTA, though it sent aspects of the case back to an arbitral tribunal for further review.