Case Studies
Content fund contract review
Veat drafted and reviewed fund (investment partnership) formation agreements between a Korean content fund GP and overseas LPs. An investment partnership formation agreement must thoroughly understand the characteristics of the investment industry and content funds in order to be concluded on terms satisfactory to both the GP and LP. Receiving favorable investment terms is extremely important for startups. However, many startups, at the very moment investment decisions are made and investment agreements are drafted, lack experience and often proceed with contracts with investment terms that are unilaterally favorable to the investment company. Veat has conducted and successfully completed numerous investment agreements from the perspective of a startup, and sometimes from the perspective of a VC. Based on this accumulated experience in investment agreements, Veat can find the optimal investment terms that are win-win for both the investment company and the investee, and provide review results that are slightly more favorable to the client. Thank you. Law firm Veat
Review of the Legality of a Lottery-like Advertising Business Model
One of the biggest characteristics of game-related laws in Korea is the strict control over games with gambling elements. A company, developing and providing a mobile advertising platform, was developing interactive advertising content that allows consumers to directly participate and enjoy, beyond simply displayed advertisements. However, among A company's interactive advertising content, there were advertisements in the form of simple games, such as spinning a wheel, similar to spinning a wheel at a cosmetics store to provide simple prizes like sample cosmetics. It was advertising content that rewards points when spinning a wheel that appears on a PC or mobile device. It might seem like advertising content completely unrelated to games, but Law firm Veat reviewed the following in order: (1) whether the advertising content is regulated by the Game Industry Promotion Act (hereinafter referred to as the “Game Industry Law”), (2) whether the advertising content includes gambling elements regulated by the Game Industry Law, (3) whether the content is subject to game rating classification, so that applicable regulations for the wheel spinning advertising content could be identified in advance. It is unfortunate that strict legal regulations exist even in the game and advertising fields where creativity and imagination can lead to innovative content. However, startups often have to embark on a difficult journey of developing services that do not violate laws, even in such situations. Law firm Veat will faithfully fulfill the role of a helper illuminating the path for startups in the maze of complex regulations and laws. Thank you. Law firm Veat
Game Publishing Contract Review
A company, a game development specialized company, requested a contract review from Law firm Veat in order to conclude a publishing contract with a Chinese publisher. Law firm Veat, based on its experience reviewing dozens of game publishing contracts, focused on reviewing the copyright and ownership of game data, license granting conditions, profit distribution, and termination conditions, which are the areas where the interests of the game developer and game publisher are most sharply opposed. In this process, Law firm Veat emphasized that there were several contract conditions that were excessively favorable to the Chinese publishers, and that these conditions (1) are difficult to find in other game publishing contracts and (2) could bring an excessive economic burden that would make it difficult to conduct continuous game updates given the developer’s current situation. Company A conveyed Law firm Veat’s review opinions to the Chinese publisher, and the Chinese publisher judged that the claims were reasonable and readjusted the detailed contract conditions. As a result, a publishing contract that both the developer and the publisher were satisfied with was concluded, and Company A was able to lay the foundation for successful entry into the Chinese market.
"Representing cosmetics manufacturer A (defendant) in a lawsuit for the prevention of unfair competition, achieving a complete victory."
Company B (Plaintiff), which manufactures and sells cosmetics, filed a lawsuit requesting a sales ban based on violation of Article 2(1)(a)(i), (d), and (e) of the ‘Unfair Competition Prevention and Trade Secret Protection Act’ (hereinafter referred to as the ‘Unfair Competition Prevention Act’), and Trade Dress, claiming that A Company (Defendant)’s trademark, container, packaging, etc., are similar to its own trademark, etc. Law firm Veat (responsible attorneys Song Do-young, Choi Seong-ho) analyzed various aspects from immediately after consulting with A Company regarding whether (1) the trademark, container, packaging, etc., claimed by B Company possessed well-known and famous status domestically, (2) whether there was a possibility of confusion, and (3) whether applying Article 2(1)(e) of the Unfair Competition Prevention Act was appropriate in this case. Based on Law firm Veat’s accumulated know-how regarding unfair competition prevention, and considering Supreme Court and Patent Court decisions, advisory and dispute mediation cases, etc., it concluded that B Company’s trademark, etc., did not possess domestic well-known and famous status, there was no possibility of confusion, and Article 2(1)(e) should not be applied in this case. It systematically organized and presented relevant records, decisions, and academic materials to argue and prove this point. In particular, Law firm Veat analyzed Supreme Court and lower court decisions to summarize and present the criteria for judging trademark confusion, and argued and proved that the plan submitted by B Company was merely a simple plan with no specific sales amounts listed, and that sales were extremely small based on statistical data regarding the domestic cosmetics sales volume. Furthermore, B Company directly submitted photos of stores it had withdrawn from in Korea, endeavoring to argue and prove in various ways. Accordingly, the court accepted all the content argued by Law firm Veat and issued a judgment rejecting the plaintiff's claim. * Currently, B Company has filed an invalidation petition with the Korean Intellectual Property Office against A Company, and we will strive to achieve good results in the invalidation petition based on this judgment.
M Company Personal Information Related Consulting
Veat completed personal information protection consulting for a large corporation M, the largest hamburger chain in Korea in June 2016. Veat reviewed the legal compliance of M's personal information protection level, considering that M collects and uses large amounts of customer information for delivery services, etc., and has had issues with personal information misuse in the past. Veat thoroughly grasped the personal information protection status and peculiarities of M through in-depth interviews with employees, on-site inspections of stores and outsourcing partners, and then, based on this, provided M with specialized personal information flowcharts, internal management plans, policies and guidelines, consent forms, and annual personal information protection plans. In particular, on-site inspections of major outsourcing partners revealed vulnerabilities that the headquarters had not previously identified and achieved immediate correction. Veat continues to provide advice on personal information protection even after completing this consulting. Thank you. Law firm Veat
"Duma, Legal Advisory from Kakao Investment"
Dunamu is a fintech startup operating a mobile securities investment application based on the messenger KakaoTalk, 'Securities Plus for Kakao'. The 'Securities Plus' app has surpassed 1 million cumulative downloads and 2 trillion KRW in cumulative trading volume since its release in February 2014. It can truly be called the best MTS (Mobile Trading System) in Korea. As Dunamu operates an MTS based on KakaoTalk, it strategically attracted investment from Kakao to deepen its relationship, and Law firm Veat provided legal counsel during the process of Dunamu establishing a strategic collaborative relationship with Kakao, allowing it to successfully conclude this investment. Recently, Dunamu has expressed its ambition to open the open market for domestic advisory firms through the Dunamu Investment Management MAP service, despite various regulations. We would appreciate your support for Dunamu’s vision to persistently pioneer new markets. Thank you. Law firm Veat
Altos Ventures, legal advisory for Hyperconnect's investment by SoftBank Ventures.
Hyperconnect is an IT (information technology) startup providing the mobile video messaging app Azar, based on WebRTC (Real Time Communication) technology. Azar, launched in November 2014, has exceeded 30 million downloads. App users are also diverse, including Southeast Asia, Latin America, the Middle East, and Turkey. I's also used it, and the ability to video chat with people around the world in real time is really attractive. There was a significant difference in position between the investor and Hyperconnect regarding specific clauses in this investment. Law firm Veat, based on experience representing multiple VCs and startups, was able to derive the optimal agreement through persuasion after accurately understanding each other's positions, and ultimately this investment was successfully concluded. Hyperconnect is continuously growing even after this investment, and I firmly believe it will grow into a company that will soon conquer the world. Please refer to the article for further details regarding this matter, and please direct inquiries to Law firm Veat. Thank you. Law firm Veat
"Legal advisory on PartyGames' acquisition of DadaSoft by Law firm Veat"
PartyGames is a mobile game company that successfully completed an IPO with its mobile game, iLoveCoffee, and while searching for new growth engines, decided to acquire DadaSoft, a company that develops web board and casual games. Law firm Veat participated from the initial stages of this acquisition, handling all legal matters including review of the acquisition structure, legal due diligence, settlement of the investee company's existing legal relationships, and drafting the Share Purchase Agreement. The acquisition was completed successfully thanks to the rapid progress. Please refer to the link for more detailed information, and we hope that PartyGames and DadaSoft will achieve greater synergy and become a global game company in 2016. Thank you. Law firm Veat
"Advice regarding dispute resolution between the major shareholder and the second-largest shareholder (CEO)."
The major shareholder, holding more than a majority of the shares, effectively controls the company and can be considered to possess it. The second-largest shareholder, trusting a verbal promise from the major shareholder guaranteeing complete management authority, purchased shares from the major shareholder and subsequently joined the company as a representative director. However, the major shareholder operated the company as they pleased, and the second-largest shareholder had no management decision-making authority, leading them to consider retirement. However, the major shareholder abused their authority, making it difficult for the second-largest shareholder to retire. Therefore, Law firm Veat, acting as an attorney for the second-largest shareholder, 1) reviewed existing contracts signed as a representative director to identify legal risks, 2) proposed solutions to minimize those risks, and 3) facilitated the second-largest shareholder’s retirement by negotiating with the major shareholder to ensure the most favorable terms for the sale of their shares. This case is a testament to Law firm Veat’s extensive experience, successfully resolving a difficult matter with ease. Thank you. Law firm Veat
Shareholder disputes, legal consultation, and equity recovery.
In the case of startups, disputes between Co-founders are quite common. In such cases, the recovery of shares is the most important issue. If there is a contract assigning share-related rights, such as a shareholder agreement between existing Co-founders, it may be possible to recover them through litigation, but if such agreements do not exist, the recovery of shares can be realistically quite difficult. Law firm Veat represented A Company in a shareholder dispute between A Company's Co-founders and, based on its abundant experience and know-how, established several strategies and, after persuading the existing Co-founders, was able to recover all of their shares. This is an example that demonstrates Law firm Veat’s experience, accurately understanding the positions of the related parties through repeated representation of similar disputes. Thank you. Law firm Veat