Korean Court Rules Dark And Darker Infringed On Trade Secrets And Must Pay Nexon 8.5 Billion Won

In 2023, there seemed to be news on an almost weekly basis related to the then upcoming PvPvE dungeon-delving game Dark and Darker. Creators Ironmace were having quite the "back and forth" with Nexon both in the court of public opinion and in actual courts.

To catch you up quickly, Nexon was very upset that previous employee Ju-Hyun Choi, according to Nexon, had stored assets and materials related to a game they were working on for Nexon (named P3 at the time) on a remote server. It wasn't the use the the remote server itself that was the problem as that use was authorized for a period of time during the COVID pandemic. However, eventually Nexon instructed those remote storage servers to be shut down when they reverted to in-office work.

Nexon alleged that Choi continued to use this storage without their knowledge after the company required its use to be discontinued. Choi was also accused of moving files from that server to other remote locations that Nexon wasn't even aware of at the time. There were a few other accusations against Choi for spreading false project cancellation news to potential new hires and an issue with Choi agreeing to let Nexon search his servers when they learned of them, then rescinding that permission. Nexon estimated about 11,000 files were likely transferred including source code, art, and other assets. Choi, obviously, was fired.

Then there's Terence Seungha Park. Park left Nexon after Choi was fired and took Choi and 9 other Nexon P3 employees and founded Ironmace. They went to work on Dark and Darker and spun up the game so quickly that Nexon said it couldn't be done without stolen materials from P3. They sued Ironmace for copyright infringement and trade secret infringement in both Korea and the US. The US copyright infringement suit was quickly dismissed with the courts saying this should be settled in the Korean court.

There was all kinds of other fun news bits like the game being pulled from Steam for a while. You can catch up on all the specific details in past articles, but the above should catch you up just fine.

At the time, I expressed my totally-not-a-lawyer take on the whole situation. I felt that Ironmace was in real trouble. While I didn't think Nexon had much of a case on the copyright infringement portion, it was relatively clear that concepts, ideas, and other "trade secrets" were probably used to get Dark and Darker built exceptionally quickly. Looking at audio and video assets and comparing them individually would likely show that Ironmace didn't use assets specifically created for P3 and violate copyrights. That said, trade secrets was always going to be the better accusation to prove in court.

Nexon had a damn good case, like them or not, and I took some heat saying so at the time when Nexon laid out file name comparisons, Unreal Engine asset packs that were common between P3 and Dark and Darker to a staggering degree, and the sheer speed in which Dark and Darker was created. This didn't seem to be a team familiar with a genre making another game in that genre. This really seemed like building on already on-hand materials.

Now a Korean court has found the same.

Don't be fooled by some other headlines out there. Yes, technically a court said Dark and Darker wasn't guilty of copyright infringement. That's an easy case. Look at the assets and see which were used in both. Dark and Darker was at least smart enough to not use the exact same assets. I thought that was the weaker accusation myself. It's also tough to claim a copyright on a game (P3) that wasn't actually released or completed.

Ironmace has, however, been found guilty of trade secret infringement.

Read that sentence again.

That means the courts agreed that Ironmace made Dark and Darker using all the trade secrets the ex-Nexon employees took with them when they left the company. Trade secret infringement, in very basic legal terms since I'm not a lawyer, really just means you use or create something using trade information that was obtained without permission in an improper way. Usually the "improper" in that sentence refers to theft, fraud, or deception.

The court has ordered Ironmace to pay Nexon 8.5 billion won (a little under $6 million USD). 1 billion of that has to be paid ASAP. The other 7.5 billion will incur a 12% delay damages penalty annually until paid in full. This doesn't account for any ruling made regarding legal which looks like Ironmace could be reponsible for 80% of those fees, too.

Nexon is still expected to pursue other action in higher courts and they still have pending criminal charges against individuals. This ruling will certainly have a bit of an impact there, I'm sure. If you want an actual lawyer's take on things, here's a great summary over on Inven.

The ruling doesn't impact Ironmace's ability to continue selling Dark and Darker at this time. Krafton, who is backing the mobile version, will be reviewing this ruling closely to see if they could potentially have to remove certain things from their mobile version.

Korean press reports that Ironmace has stated that the company "respects the court's ruling" and that they "will review the details more closely after receiving the ruling, which is expected to be issued this evening." We'll see if there's any appeal.

It'll also be important to watch how this ruling impacts the future of the game itself as that is one big chunk of change to have to pay for a smaller company.