Case Studies
Content Creation Outsourcing Contract, 3 Important Points to Consider
Law firm Veat received a request from Healthcare company A (hereinafter referred to as "the client") to review the content production outsourcing contract. The client requested a legal review of the content production outsourcing contract in order to strengthen communication with potential customers and increase brand trust by outsourcing content production to an external company in the form of monthly columns. The content production outsourcing contract should clearly define information protection, intellectual property issues, and liability issues in the event of contract performance or breach to minimize various legal risks that may arise during the process of outsourcing content production. Law firm Veat strictly defined the obligation to maintain confidentiality to prevent the information provided to external companies for content production from being disclosed externally, and prepared provisions to indemnify the client from disputes regarding intellectual property rights that arise when the client uses the content. Also, to guarantee the quality of the content produced by external companies, we clearly defined the client’s right to review and compensation provisions in the event of damage. 3 Key Points for Content Production Outsourcing Contract When drafting a content production outsourcing contract, you need to pay attention to 3 important points to prevent legal risks in advance. [1] Obligation of Confidentiality and Information Protection Information provided to external companies for content production is a valuable asset of the client. In the case of healthcare companies, it may contain sensitive information such as personal information, so thorough protection is necessary. Therefore, the contract should include a confidentiality provision to ensure that external companies maintain the confidentiality of all materials received and are subject to legal liability if the obligation is violated, and the obligation of confidentiality should be explicitly stated for a certain period after the contract termination to strengthen information protection. [2] Prevention of Intellectual Property Issues When outsourcing content production, a clear provision is necessary regarding who the copyright belongs to and how the right to use it will be distributed. To prevent intellectual property disputes over content produced by external companies, the contract should include a provision regarding copyright and right of use. Such a provision plays an important role in clarifying the rights and responsibilities regarding the asset, as the asset is a key role in the company's valuable assets. If you plan to distribute content to various media and platforms after content production, a clear provision regarding copyright and right of use is even more essential. [3] Review and Indemnification Provisions The content production outsourcing contract should clearly state specific procedures and periods for the client to review the content, and should include a provision to require correction if problems are found during the review process to guarantee the quality and completeness of the content. These review procedures ensure that the client maintains the accuracy and consistency of the content and is able to directly verify the quality of the external product. Also, the contract should include an indemnification provision stating that the external company is responsible for any damages that may arise if the content provided by the external company does not meet the quality standards specified in the contract to minimize potential losses during the content review process and increase the credibility of contract performance, thereby guaranteeing the quality of the content. Law firm Veat prepared a contract that adheres to the key points that should be observed when drafting a content production outsourcing contract, based on the characteristics of the content that the client intends to outsource. The client was able to smoothly fulfill the contract and prevent unnecessary legal disputes through this content production outsourcing contract. Law firm Veat has specialized expertise centered on extensive advisory experience with IT and startups, particularly in content production outsourcing contracts and intellectual property rights. We are committed to providing all necessary legal support to help our clients achieve their business goals by preventing legal issues that may arise during the content production process and providing professional legal advice related to intellectual property rights. If you need legal advice regarding content production outsourcing contracts and intellectual property rights, please feel free to contact Law firm Veat. Thank you. Law firm Veat
Preventing departing employees' confidential information leakage, protecting startup growth with specific agreements.
Law firm Veat performed legal advisory services regarding the departure of a co-founder at the request of a game developer (hereinafter referred to as "client"). Law firm Veat prepared and provided a specific confidentiality and non-compete agreement to protect the company’s confidentiality and prevent competition during the departure of one of the co-founders. The co-founder departure agreement included confidentiality obligations and non-compete obligations to protect the client’s confidential information after departure and prevent its leakage to the outside. In particular, the non-compete clause restricted the departure of the founder from establishing a competing company or accepting employment to ensure that the founder's actions did not harm the client’s interests. In addition, a penalty clause was included to prepare for the possibility of a breach of confidentiality or non-compete obligations, thereby strengthening legal stability. Law firm Veat also revised the rights and obligations of the departing founder as a company shareholder at the client’s request and prepared a shareholders' agreement reflecting this to prevent potential legal disputes between stakeholders. This ensured that the client’s business secrets, etc., could be safely protected even after the founder’s departure, and documents such as the shareholders' agreement were prepared to prevent potential disputes between the founder and the company. Legal Checklist You Must Know When a Founder Departs - To Protect Startups Startups build important technology and business strategies and build competitiveness from an early stage. However, when co-founders or key personnel depart, there is a significant risk that the core information and know-how they possess will leak externally, so legal preparation for such situations is essential. A departure agreement that strengthens confidentiality and non-compete clauses for departing founders and a shareholders' agreement that defines the rights and obligations of departing founders as shareholders can be important legal safeguards. In particular, the shareholders' agreement clearly defines the rights and obligations between the remaining management and shareholders after the departure of a founder, prevents unnecessary legal disputes, and supports the stable growth of the company. The departure of a founder can be a situation that greatly affects a startup. Therefore, in such situations where the interests of the shareholders are sensitive, the preparation of contracts to minimize legal risks is very important. The shareholders' agreement is a necessary legal basis for the long-term growth of a company, and in the case of startups, it is important to receive legal advice from a lawyer with experience in shareholders' agreements. Law firm Veat has extensive legal advisory experience for a wide range of companies, from early-stage startups to various growth stages. In particular, it deals with sensitive issues such as the departure of key executives, shareholder agreements, and similar issues faced by companies in the IT/startup sector where technology and business intersect, and provides rapid and professional legal advice like an in-house counsel. Law firm Veat comprehensively reviews legal issues that can arise in actual business environments and provides legal advice optimized for clients, so if you need regular corporate legal advice, please contact Law firm Veat. Thank you. Law firm Veat
Global contract disputes, unilateral termination notice? Law firm Veat’s successful legal response cases.
Law firm Veat comprehensively reviewed the legality and possibility of legal response regarding the unilateral contract termination notice received from a counterparty at the request of a global bio company A (hereinafter referred to as "the client"). In particular, we meticulously analyzed international private law and relevant Korean laws related to the governing law of the contract, and provided legal advice to protect the client's rights. This case involved a situation where the client's counterparty unilaterally notified the contract termination without presenting a clear reason for termination. Law firm Veat first meticulously analyzed the English contract between the client and the foreign entity. In particular, Law firm Veat meticulously reviewed the contract period and termination conditions stipulated in the English contract between the client and the foreign entity, and based on this, analyzed whether the client could resolve the dispute in a favorable position. Also, a point that Veat particularly noted in this case was that the ‘governing law’ of the contract was set as foreign law. Since the governing law serves as the standard for contract interpretation in international contracts, Veat analyzed the legal system to be applied to the contract and the applicability of Korean laws based on international private law. In particular, according to Article 45 of the Private International Law Act, the law expressly chosen by the parties to the contract shall be primarily applied. However, according to Article 20 of the Private International Law Act, Korean mandatory provisions that must be applied regardless of the governing law in accordance with the purpose of legislation may be applied even if foreign law is the governing law. Based on this, Law firm Veat reviewed whether this mandatory provision could actually help the client's contract termination dispute. Important points to consider when drafting international contracts When unexpected disputes arise during the conclusion and performance of an international contract, especially when the counterparty notifies the contract termination without prior notice, it may be disconcerting. Let’s look at what points to check in advance. When drafting an international contract, it must adequately consider the legal differences and practices of each country so that the contract can be executed clearly and reliably. Important elements in an international contract include the governing law and jurisdiction, dispute resolution methods, contract language and interpretation, and payment terms. First, the contract should clearly specify the law to be applied in the interpretation of the contract and in the event of a dispute, and the jurisdiction. The governing law means the law to be applied to the contract, which can prevent legal conflicts that may arise during contract performance. Also, it is important to specify in advance the method for resolving disputes that may arise. International contracts often include methods such as mediation for resolution. The choice of contract language is also important. English is generally used in international contracts, but a translated version in the local language may be necessary. Some countries require contracts in their own language, so it is advisable to review these factors in advance to maintain legal validity. It is also important to clearly define the payment method according to the contract terms in an international contract. Specify payment methods, currencies, payment dates, and interest rates applicable in the event of delay to minimize unexpected exchange rate fluctuations and financial risks. Also, standardize the format to prevent confusion due to differences in date and time notation, and reflect cultural differences such as national holidays, if necessary. Law firm Veat supports the client's global business success based on years of experience and in-depth expertise accumulated in drafting and responding to international contracts. In particular, Law firm Veat has gained recognition and trust domestically and internationally through being selected as a finalist for the ALB Korea Law Award, and being recognized as a Leading lawyer by Legal Times. Veat’s legal advice, which excels in investment and M&A for startups and venture companies, serves as an important legal foundation for global business. Through the comprehensive and systematic legal support of Law firm Veat, we help clients expand their business stably overseas and succeed on the global stage. If you need English contract drafting or international contract drafting, please contact Law firm Veat. Thank you. Law firm Veat
[Law firm Veat TIP] Can idol bromide photos be considered copyrighted works?
Copyright Specialization Law firm Veat TIP(Technology Intellectual Property) team contributed to Flattum, a startup-focused media platform, regarding legal issues related to copyright protection for photographic works, such as idol bromide photos. As the K-POP craze intensifies, interest is growing as to whether various photos such as idol bromides, photo cards, and product photos can be protected as works. In this column, we specifically explained the possibility of legal protection for photographic works that exhibit individuality and creativity rather than simply reproducing photos, as well as the necessity of copyright protection for photos that meet the requirements of creativity.
Terms Regarding Prior Consent Rights and the Principle of Shareholder Equality
Today, Law firm Veat will explain the ‘prior consent right of shareholders’ that commonly appears in the investment attraction process for startups and venture companies. Law firm Veat provides criteria for judging whether a shareholder’s prior consent right can be legally permitted, helping companies to proceed with investment attraction stably. Law firm Veat startup lawyer will explain in detail what a prior consent right is. What is a shareholder’s prior consent right? ‘Prior consent right’ refers to the right to grant a company the right to obtain prior consent for major decision-making matters when entering into a new share subscription contract with a specific shareholder in order to raise funds. Generally, it is used to protect investors, but it is fundamentally not allowed to grant special rights to some shareholders according to the ‘principle of shareholder equality’ that all shareholders should be treated equally. However, such rights may be granted as an exception if certain conditions are met by law. Criteria for judging the validity of a prior consent right The Supreme Court judges that a contractual clause granting a prior consent right to a specific shareholder is valid if the following four requirements are met. 1) Payment of essential funds: The investment money paid by the shareholder must be essential funds for the survival and development of the company. 2) Necessity: It must be unavoidable to grant the company’s decision-making consent right to that shareholder for investment attraction. 3) Absence of harm to other shareholders: Even if a prior consent right is granted, other shareholders must not suffer substantial and direct damage or disadvantage. 4) Provision of benefits: It must be a case where providing the opportunity to monitor company management to some shareholders benefits the other shareholders and the company. Only when all four requirements are met can granting a prior consent right to a specific shareholder be considered consistent with the principle of shareholder equality. Principle of shareholder equality and permission of exceptions According to the principle of shareholder equality, the Supreme Court has ruled that shareholders must be treated equally based on the number of shares they own. However, exceptional permission can be granted for differentiated treatment, such as granting a prior consent right to some shareholders, when the above four special circumstances are met. The principle of shareholder equality is a principle that all shareholders must be treated equally based on the number of shares they have. However, when a company inevitably needs to grant a prior consent right for investment attraction, differential treatment such as this may be allowed as an exception if the four requirements explained above are met. That is, if the requirement for essential funds for investment attraction is met or if it does not cause substantial harm to other shareholders, differentiated rights can be granted. This is because by providing such conditions, it can provide investors with control over the company’s major decision-making process while also positively affecting the company and other shareholders. Legal consultation services of Law firm Veat Law firm Veat provides professional and in-depth consultation to minimize the various legal risks that customers may experience regarding issues related to the shareholder’s prior consent right. In particular, Veat has extensive experience in the IT and startup fields and excels in resolving legal issues that startups may face during the fundraising process. Law firm Veat has successfully provided advice on numerous investors and startups on new share subscription and shareholder contracts, and provides rapid and accurate legal services tailored to the specific characteristics and goals of its clients. If you need investment-related legal advice such as shareholder contracts, please contact investment-specialized Law firm Veat. Thank you. Law firm Veat
Venture companies' stock purchase options granted below market value, legal risks.
Law firm Veat received a request from venture company A (hereinafter "the client") and reviewed the validity and subsequent actions regarding stock purchase rights (stock options) granted below market price. Law firm Veat reviewed the legal validity of the client’s stock purchase rights (stock options) being granted at a price below market price, and carefully analyzed the detailed provisions of the “Venture Business Act” (hereinafter “the Venture Business Act”) and major laws, in accordance with the characteristics of the client, a venture company. If the granting of stock purchase rights (stock options) violated laws, we also assessed the legal risks, including the impact on all stock purchase rights (stock options) and the possibility of criminal liability for the representative director. Granting stock purchase rights (stock options) below market price, Stock purchase rights (stock options) are used as a means of motivating core personnel and attracting talent in venture companies and startups, and is a system that grants the right to acquire shares of the company at a predetermined price after a certain period of time. If the regulations or requirements of the Venture Business Act and related laws are not met when granting stock purchase rights (stock options), there may be issues with their validity. The price of stock purchase rights (stock options) is, in principle, based on the market price, and may be allowed to be granted at a price lower than the market price within a certain limit due to the characteristics of a venture company, but this is only possible within legal limits.
Implementation of the Virtual Asset User Protection Act, Review of the Legality of Virtual Asset Business Operators
Law firm Veat received a request from virtual asset business operator A (hereinafter referred to as "the client") to conduct a legal review of the propriety of virtual asset business in accordance with the Virtual Asset User Protection Act and related laws. The client requested a review of whether the act of supporting transactions so that a virtual asset exchange could operate and trade specific virtual assets was illegal under domestic law. Veat reviewed the possibility that the client’s specific virtual asset violated the “Special Financial Information Reporting and Supervision Ordinance” and the “Act on the Protection of Virtual Asset Users” (hereinafter referred to as “the Virtual Asset User Protection Act”). In particular, it reviewed whether the virtual asset corresponded to a virtual asset (so-called dark coin) that could not have transmission records separated when the virtual asset was transferred to another virtual asset address, where the virtual asset business operator could not confirm transmission records, and whether it corresponded to a ‘virtual asset issued by a special relationship person’ (self-issued virtual asset) under the ‘Act on the Protection of Virtual Asset Users’ (hereinafter referred to as ‘the Virtual Asset User Protection Act’). A thorough review was conducted as to whether the act of providing transaction support for specific virtual assets was illegal. Legal Review of Virtual Asset Business Propriety Virtual asset business operators must meet certain criteria for anti-money laundering and transparent financial transactions. In particular, the record of virtual asset transactions and the ability to track them are one of the strictly required items under the Special Financial Information Reporting and Supervision Ordinance. It is essential to legally review whether the virtual asset exchange complies with the regulations in the process of providing transaction support for specific virtual assets and whether it fulfills the anti-money laundering obligations. 1. Dark Coin A dark coin refers to a virtual asset with technology that obscures or makes it impossible to identify transaction and transmission records. Due to these characteristics, there is a high possibility of being abused for money laundering or illegal transactions, so virtual asset exchanges often find it difficult to confirm transaction records. Transparent records of virtual asset transactions are directly related to the credibility and legal compliance of financial transactions, which is one of the key requirements that exchanges must fulfill. Virtual asset exchanges must constantly monitor suspicious transactions and take appropriate measures, such as notifying the financial supervisory authority when suspicious unfair trading activities are suspected. If the investigation and investigation by the financial supervisory authority determine that the suspicion is unfair trading, criminal penalties and fines may be imposed on the person who committed the unfair trading. Veat reviews whether the virtual asset subject to transaction support corresponds to a dark coin and the risk from a user protection perspective, providing legal advice so that the virtual asset business operator can operate the business stably. 2. Self-Issued Virtual Asset The Virtual Asset User Protection Act is a law enacted on July 19, 2024, to protect user assets and prevent illegal transactions by virtual asset exchanges, and stipulates restrictions on virtual assets issued by ‘special relationship persons’. Based on the Virtual Asset User Protection Act, Veat reviews whether the virtual asset subject to transaction support has a risk of violating the law, and especially reviews whether the entity that issued it is in a special relationship with the exchange, i.e., whether it corresponds to a self-issued virtual asset. Laws and regulations related to virtual assets are in a stage of gradually being established in Korea, so virtual asset business operators need to conduct thorough legal reviews to determine the legal meaning of specific transaction support acts in the process of operating a virtual asset exchange and whether the business they intend to carry out is illegal. Veat has extensive experience in IT, blockchain, and legal advice related to virtual assets. Song Do-young, Representative Attorney participated in the enactment process of the Promotion Act on Asset-Linked Convergence Industry, demonstrating deep expertise in the virtual asset field, and An Il-woon, Partner Attorney serves as an IT specialist certified by the Korea Bar Association and a member of the Korea Bar Association Blockchain Special Committee, actively providing legal advice and contributing to issues related to blockchain technology and virtual assets. In addition, Song Woo-seok, Senior Foreign Attorney has experience serving as a senior legal counsel at Binance, a global virtual asset exchange, and currently serves as legal counsel for the Korea Blockchain Business Cooperative. With Veat’s differentiated expertise, we provide the optimal solution that allows our clients to simultaneously achieve their business goals and legal compliance in the rapidly changing regulatory environment in the virtual asset field. If you need legal assistance regarding virtual asset businesses, the Virtual Asset User Protection Act, or other virtual asset related matters, please feel free to contact Veat. Thank you. Veat Law Firm
Plastic Chemical Recycling Debate_Law firm Veat Gukmyeongsu Attorney
Recently, a heated debate has emerged surrounding the methods and environmental impact of plastic chemical recycling. Law firm Veat’s partner attorney, Gukmyeong-soo, who has participated in various renewable energy and environmental projects, has noted this debate and, through the Chungcheong Times Net Zero column, has provided an explanation of the types of plastic recycling methods and the environmental impact of each method, including mechanical recycling (MR), chemical recycling (CR), thermal recycling (TR), and the recycling priority according to the Promotion of Circular Economy Transition Act. The Chemical Recycling Debate of Plastic Chungcheong Times Net Zero Column _Attorney Gukmyeong-soo Currently, plastic recycling is largely divided into three methods: mechanical recycling (MR), chemical recycling (CR), and thermal recycling (TR). Mechanical recycling is a method of physically recycling waste plastic, which has low energy costs and low carbon emissions, but has concerns about property degradation and pollution. Chemical recycling is a method of reverting plastic to a raw material state through heat or catalytic reactions, which has relatively high energy and carbon emissions, but has the advantage of maintaining quality similar to new products. On the other hand, thermal recycling is a method of burning plastic as fuel to recover energy. According to the Promotion of Circular Economy Transition Act, the priority of plastic recycling is Reuse > Regeneration > Energy Recovery, which is also evaluated in an appropriate order from a carbon emission perspective. According to this priority, thermal recycling should be considered as a last resort, but there is a dominant opinion that it is difficult to definitively assert the superiority of mechanical recycling versus chemical recycling. Recently, a greenwashing controversy has erupted surrounding chemical recycling. Following the withdrawal of a domestic conglomerate from a waste plastic pyrolysis oil business, the Attorney General of California has filed a lawsuit against the US petrochemical company ExxonMobil, which claimed chemical recycling but actually used it as fuel. Some interpret this as an expansion of the claim that chemical recycling is so-called greenwashing. The advantage that chemical recycling can regenerate contaminated plastic into a new product state is undeniable, and the need for chemical recycling is further highlighted when mechanical recycling is difficult. As international discussions are actively taking place, the UN Plastics Treaty Intergovernmental Negotiating Committee (INC-5) to be held in Busan in November will draft an international treaty to prevent plastic pollution, and attention is being paid to how chemical recycling will be reflected. Attorney Gukmyeong-soo has provided advice related to the establishment and operation of a renewable energy development-type private equity fund with the largest private RPS business operator in Korea as an anchor investor, equity investment in a 60MW brackish farmland solar power generation company, the establishment and operation of a specialized private equity fund investing in waste recycling and resource utilization industries, and other similar projects. He has participated in various renewable energy and environmental projects, including investment in waste upcycling companies using robotic technology and investment in carbon resource companies converting greenhouse gases into hydrogen. Law firm Veat is providing professional legal advice in the environmental and recycling industry, focusing on partner attorney Gukmyeong-soo. If you need legal advice related to plastic recycling and the environmental industry, please contact Law firm Veat, and for those interested in the full text of attorney Gukmyeong-soo’s related column, please refer to the link below. [Go to] The Chemical Recycling Debate of Plastic - Chungcheong Times (cctimes.kr) Thank you. Law firm Veat
Health management AI service app, mandatory review of applicability of the Medical Device Act.
Law firm Veat received a request from Company A, an operator of a mobile application providing AI-powered health management services, to thoroughly examine whether its services would be subject to the "Medical Device Act." Law firm Veat assessed whether AI-driven health information provision could be recognized as a general non-medical health management service and whether it might be classified as a medical device subject to the Medical Device Act, and carefully analyzed the operating method of the client's service, legal regulations, and specific service functions to provide legal advice to minimize legal risks. Examining Legal Issues Related to AI Services and the Medical Device Act Under the Medical Device Act, a 'medical device' is defined as a device used for diagnosing or treating diseases and is subject to various regulations depending on its function. Services like Company A’s, which provides personalized health information through AI analysis, can greatly assist users in their daily health management. However, if such services go beyond providing simple health information and perform medical acts such as predicting or managing diseases, they may be classified as medical devices under the Medical Device Act. In such cases, medical device approval, reporting, and review must be undergone, which requires considerable time and expense. Therefore, if the service is a healthcare service, it is necessary to consider the possibility of being legally defined as a medical device. First, there is the issue of interconnection with existing medical devices. If the application uses technologies like Bluetooth or NFC to receive information from existing medical devices or transmit data remotely, it is likely to be classified as a medical device. For example, if it connects to an actual blood glucose meter, analyzes the data, and allows the user to use the results as a basis for disease diagnosis, it may be subject to the Medical Device Act. Second, there is the purpose of the service. If the service is a non-medical health management service and is used by the user for health management in daily life, it may be excluded from the scope of the Medical Device Act. For example, monitoring the user’s health status to improve their lifestyle habits may not be considered a medical device. Whether something constitutes a medical device must be reviewed comprehensively, including guidelines from the Ministry of Health and Welfare and the 「Medical Device Act」, and it is recommended to receive legal advice from Law firm Veat has numerous successful cases related to digital healthcare and AI regulations,
Digital content gambling risk, legal consultation safely!
Law firm Veat’s Metaverse platform client A requested a review regarding whether the specific content being conducted by the company (hereinafter “the Content”) falls under the “Act on the Regulation and Punishment of Gambling” (hereinafter “the Gambling Regulation Act”) and whether the company is considered an entity engaging in gambling as a business. A legal review was required to examine the content, in addition to the Gambling Regulation Act, through in-depth analysis centered on related case law. Review of the Content's Gambling Nature ◾ What does “Gambling Business” mean as defined by the Gambling Regulation Act? Gambling Regulation Act Article 2 (Definitions) ① As used in this Act, the terms shall have the meanings as follows. 2. “Gambling Business” means a business falling under any of the following subparagraphs. a. Lottery Issuance Business: A business that gathers money and property from multiple people and gives property benefits to winners through a drawing method, including electronic forms using a certificate (including a device with information processing capabilities such as a computer program) and causing losses to other participants. b. Prize Business: A business that collects money and property from applicants in exchange for the condition of giving benefits when answering a specific survey or prediction is correct, and gives property benefits to the correct answerers or winners and causes losses to other participants. c. Other Gambling Business: A business that is conducted for profit using rotating panels, drawings, prizes (incentives), etc., that may induce gambling sentiment, as stipulated by Presidential Decree. Article 29 (Punishment) ① Any person falling under any of the following cases shall be sentenced to imprisonment for five years or less or a fine of no more than 50 million won. 1. A person engaging in gambling as a business using gambling machines or gambling devices with gambling nature other than gambling business. Law firm Veat first reviewed whether the Content falls under the “Gambling Business” as defined in the Gambling Regulation Act. The Gambling Regulation Act explicitly states that not only lottery issuance and prize businesses but also businesses conducted for profit using rotating panels, drawings, prizes, etc., that may induce gambling sentiment, as stipulated by Presidential Decree, are considered gambling businesses. Furthermore, even if it does not fall under the Gambling Business described above, one can still be punished under Article 29(1) of the Gambling Regulation Act if engaging in gambling as a business by using gambling machines or gambling devices with gambling nature. Accordingly, Law firm Veat comprehensively analyzed whether the Content requested by the client falls under the Gambling Business according to the Gambling Regulation Act, and whether it falls under gambling involving gambling machines or gambling devices with gambling nature. ◾ What is the Supreme Court’s position on gambling devices? Reference to Supreme Court Decision 2006. 11. 23, Case No. 2006do2761 Whether a particular machine or device “induces gambling sentiment” shall be determined not only by the inherent purpose or nature of the machine or device but also by considering the purpose of use, the method and form of use, the scale and nature of property benefits or losses that arise as a result of use, whether it is determined by chance, whether it pays money or exchangeable prizes, and the degree and size and whether it actually exchanges prizes for cash. The Supreme Court states that in determining whether a machine or device “induces gambling sentiment” (i.e., “gambling device”), it is necessary to consider not only the inherent purpose or nature of the machine or device but also specific criteria such as the purpose of use, the method and form of use. Law firm Veat, based on the Supreme Court’s case law and a thorough research and review of similar cases, reviewed whether the Content requested by the client falls under the gambling devices prohibited in Article 29(1) of the Gambling Regulation Act. ◾ Possibility of being subject to the Game Industry Promotion Act should also be reviewed! Furthermore, if the Content’s outcome results in users receiving property benefits or exchangeable assets such as on-chain coins or NFTs, which are not simply in-game assets, then not only the Gambling Regulation Act, but also the “Game Industry Promotion Act” may apply. Law firm Veat advised the client that additional review of related laws, including the Game Industry Promotion Act, may be necessary regarding the legality of the client’s Content and provided advice on improving the Content’s operating method. Legal advisory of Law firm Veat, possessing expertise in IT areas and related regulations Law firm Veat possesses specialized legal expertise in IT, startups, and the content industry, as well as abundant advisory experience. This advisory case is a result of the firm’s deep understanding of the IT field and years of regulatory response experience. Law firm Veat provides in-depth analysis of legal issues arising in the rapidly changing digital industry and optimal legal advice based on regulatory laws and precedents. In particular, the firm thoroughly reviews regulatory risks that frequently occur in the content industry, including gambling nature, and supports clients in operating their businesses stably and in compliance with the law. Thank you. Law firm Veat