Case Studies
[Consultation] Drafting a Privacy Policy and Consultation on Personal Information Collection for Bio/Healthcare Web Services
Bio/healthcare venture company A is developing a portable blood component measurement device and preparing to launch this service. A plans to provide a service where people suffering from chronic diseases can check their blood condition themselves, test results are recorded, and automatically sent to family members. In this process, A sought Veat regarding the methods for collecting and utilizing user customer information and drafting a personal information processing policy. Veat confirmed that due to the nature of the service provided by A, the personal information collected by A includes physical information and blood test values, and informed A that such information is treated differently from general personal information as sensitive information. Furthermore, Veat explained the requirements that must be met to collect sensitive information and provided advice to ensure that A’s service can legally collect and utilize physical information and blood test values. Thank you. Law firm Veat
[Consulting] Verifying the reporting procedure for granting overseas headquarters shares to employees
A company is an online advertising consulting startup headquartered in the United States with a subsidiary in Korea. A company has been providing shares of its U.S. headquarters as incentives to employees of its Korean subsidiary to enhance performance rewards and a sense of ownership in the company. In this process, A company recognized that when employees of its Korean subsidiary acquire overseas shares, they must report securities acquisition to the Bank of Korea, and inquired to Law firm Veat about the procedures for securities acquisition reporting. Law firm Veat conducted a review of relevant laws and regulations, comprehensively considering the number of company shares paid to employees of the Korean subsidiary, the price, the ratio to the total number of shares from the U.S. headquarters, etc. As a result, it was confirmed that the company’s share issuance falls under an exception that does not require separate securities acquisition reporting, and it was possible to review conditions under which such an exception would not apply. Based on Law firm Veat’s opinion, A company was able to provide shares to employees without a separate reporting procedure, and it was confirmed that monitoring is needed to determine whether the conditions under which the exception would not apply are met, and to perform the reporting procedure if necessary. Thank you. Law firm Veat
[Consultation] Review of Game Publishing Contract
Game publishing is one of the most important aspects of business for game developers. Recently, the game market is moving towards a structure where game developers and publishers are clearly distinguished, and game developers often cannot earn revenue without the activity of a publisher. Because of this, game developers inevitably become very sensitive to profit sharing, IP ownership, publishing conditions and duration when entering into publishing contracts. Law firm Veat reviewed the publishing contract for A company’s online game to be published by B company, a large domestic publisher. In this process, Veat examined whether the development and update cycles were excessively short or whether there were many publisher development requirements, and also revised the contract clauses so that both parties could clearly recognize the ownership of the source code and artwork. Furthermore, we focused on reviewing the copyright and ownership of game data, which is the area where the interests of game developers and game publishers most sharply conflict, along with license granting conditions, profit distribution, and termination conditions. Thank you. Law firm Veat Dream
[Advisory] Review of the legality of online contact lens sales
A company conceived a service to purchase contact lenses inexpensively and conveniently via the internet, as the demand for contact lenses has increased. However, unlike general over-the-counter drugs, contact lenses are subject to specific purchase methods stipulated in medical-related laws, so online purchases could have legal implications. Accordingly, A company sought Law firm Veat to inquire about the legality of their business model. Veat comprehensively reviewed medical-related laws, the Ministry of Health and Welfare’s binding interpretations, and recently released deregulation guidelines, etc., to provide opinions on the possibility of A company conducting a contact lens sales business and the legality of the business model if modified. Ultimately, A company found a compromise based on Veat’s review to be able to sell contact lenses online cheaply, and is expanding its business through this. Thank you. Law firm Veat
[Advisory] Review of the legality of acquiring own shares
Conventionally, the Commercial Code prohibited the acquisition of treasury stock based on the principle of capital adequacy, allowing it only in exceptional cases. However, there has been much criticism that, in order to maintain the principle of shareholder equality or without impairing capital adequacy, treasury stock acquisitions should be recognized. The newly revised Commercial Code now generally allows the acquisition of treasury stock and has abolished the profit cancellation system, which has the same economic effect as treasury stock acquisition. Accordingly, Company A inquired with Law firm Veat regarding whether Company A's treasury stock acquisition, which was previously prohibited, is now possible, and whether acquisition with company-owned real estate instead of cash is possible in this case. Law firm Veat, through the articles and intent of the revised Commercial Code of 2011 and related case law, informed Company A that it can purchase its own shares and provided detailed guidance on the requirements and procedures that must be followed when purchasing such shares. Also, regarding whether Company A can purchase its own shares with company-owned real estate instead of cash, it provided a review opinion on the possibility of treasury stock acquisition through real estate, accurately specifying the laws and regulations that state the relevant content. Thank you. Law firm Veat
[Consulting] Drafting Standard Stock Option Grant Agreement
Startups often find it difficult to provide high salaries or other monetary compensation to founding members and key personnel. In such cases, stock options (right to purchase shares) can be a useful tool for attracting key personnel. When stock options are granted to employees, the company may not be able to provide immediate large monetary compensation, but can compensate in proportion to the company's growth, and employees can be motivated to contribute to the company's growth. These stock options affect the company's equity structure, so the Commercial Code stipulates the requirements for their issuance. However, for startups and venture companies, if certain requirements are met, they can grant stock options with more relaxed issuance requirements through the “Special Measures Act for Fostering Venture Businesses” (hereinafter referred to as the Venture Business Act). In addition, when a company grants stock options, it may set a condition that not all quantities are granted at once, but that a certain quantity is gradually granted after a certain period. Company A intended to grant vested stock options gradually over a certain period of time in order to have employees work for the company for a long time. Accordingly, Law firm Veat drafted a standard stock option grant agreement that satisfies Company A's requirements while complying with the restrictions stipulated by law. Thank you. Law firm Veat
[Consulting]Drafting Shareholder Agreement
Startups often grant a certain amount of company stock to co-founders or early members. When a company distributes its stock to early members, they can work with a sense of ownership and, if the company's value increases later, the early members can sell their shares at a high price, providing an incentive to work hard for the company. Therefore, distributing an appropriate level of company equity to a startup’s early members is a very important issue. On the other hand, when granting shares to early members, there is also a risk that they can freely dispose of the shares they receive or that they can move to another company while holding the company’s shares, which could threaten the company’s management rights. Therefore, when granting shares to early members, it is necessary to impose legal obligations on each other through a shareholder agreement to prevent risks such as the disposal of shares to third parties. Company A’s founder sought Law firm Veat in order to draft a shareholder agreement to prevent founding members from transferring their shares to outsiders without each other's permission or leaving the company. Law firm Veat drafted a shareholder agreement that includes the condition that the founding members must work for the company and that the number of shares that can be disposed of gradually increases according to the period of employment, based on the opinions of Company A’s founder, while granting shares to the founding members. In addition, it drafted a shareholder agreement containing priority purchase rights and stock return conditions, so that Company A can secure management rights stably and the co-founders can have motivation to grow the company. Thank you. Law firm Veat
[Consultation] Review of Possibility of Violation of Japanese Copyright Law and Regulations
Japanese copyright law tends to strictly protect copyright compared to Korean copyright law, especially lacking general provisions on fair use, necessitating a preliminary review of potential legal violations for businesses involving copyright. While ongoing discussions in Japan about introducing general provisions for fair use continue, they have not yet been enacted due to significant opposition. Company A offers applications based on new business models in various countries, including Korea and the US, utilizing diverse content for active operations. Recognizing the stricter regulations of Japanese copyright law, Company A inquired about the feasibility of services within Japan. Veat went beyond reviewing current Japanese copyright law provisions, predicting potential legal issues through relevant Japanese court precedents for actual service provision, and also considered practical issues related to licensing terms for pertinent content and associations like the Japanese Music Copyright Association, advising on legal considerations crucial for future service provision. Thank you. Legal Counsel Firm Veat
[Consulting] Agent for Reporting Foreign Investment
Global venture investment company A decided to invest in domestic startups through Veat. During this process, A inquired about the foreign investment notification system with Veat. Foreign investment notification is defined under the Foreign Investment Promotion Act, allowing notification for cases where foreigners invest more than 100 million won in domestic companies to acquire a certain percentage of equity or lend funds. Foreign investors who have filed a foreign investment notification benefit from guaranteed remittances abroad, national treatment, and exclusion of discriminatory application of tax exemptions, making it advantageous for large investments or ongoing investment relationships with South Korea for substantial investors. Veat represented A company to proceed with the foreign investment notification for A's investment in the domestic startup. Although A's investment typically did not meet all requirements under the Foreign Investment Promotion Act, Veat's legal review confirmed that A's investment structure qualifies for an exception under the Act, enabling the completion of the foreign investment notification. Thank you. Law firm Veat
[Litigation] Website Hijacking Case, 320 million Won Damages Victory
Law firm Veat filed civil and criminal lawsuits in a case where an employee managing a recruitment advertisement website stole the website itself by changing the website management ID and password, changing information such as the website name and account number, and successfully won all cases. Veat filed criminal charges against the employee for breach of duty, violation of the Personal Information Protection Act, and violation of the Copyright Act, leading to a guilty verdict from the court. In the civil judgment, not only was the entire amount of 220 million won (partial claim) requested from the court recognized as damages, but Veat also claimed actual losses for one month, the period during which the website was actually stolen, and approximately six months of reduced future sales, resulting in a total damages of 320 million won being recognized. Law firm Veat will continue to do its best to ensure that all losses suffered by clients who have been infringed upon in the future can be compensated. Thank you. Law firm Veat