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READ MORE +Legal Requirements to Verify When Subcontracting Arises in Software Development Contracts
Software development projects are inherently difficult for a single company to handle from planning to development, testing, and maintenance. This often leads to a subcontracting structure where the main contractor re-entrusts some of the development work to external development companies. However, failing to thoroughly review relevant laws and regulations during this process can lead to legal risks. The most representative law is the 「Act on Fair Subcontracting (hereinafter referred to as the ‘Subcontracting Act’).” The Subcontracting Act applies not only to manufacturing but also to technical service areas such as software development, and requires the main contractor to fulfill several legal obligations if certain conditions are met. First, according to Article 13 of the Subcontracting Act, a written document containing the main conditions of the subcontracting agreement must be provided. Specifically, this should include the scope of work, delivery schedule, and price calculation criteria. Simple verbal agreements or email notifications will not satisfy the legal requirements. Article 13-4 prohibits special clauses that unfairly restrict or infringe on the interests of the subcontractor, and Article 14 explicitly prohibits setting a subcontract price significantly lower than the normal price. Such actions can lead to corrective measures by the Fair Trade Commission, as well as claims for damages and criminal penalties (fines for representatives, etc.). Meanwhile, software development contracts also include important elements such as intellectual property rights assignment, confidentiality obligations, and liability for delays. These must be designed so that they do not conflict with the obligations under the Subcontracting Act. In particular, the issue of IP assignment for development results can affect future commercialization, further development, and investment attraction, so it is desirable to clarify it at the initial stage of the contract. The software development structure that includes subcontracting agreements requires not only technical completeness but also the completeness of the legal structure, which is a factor that determines the success or failure of the project. Therefore, in practice, it is essential to accurately understand relevant laws and regulations and to draft and manage contracts that reflect them. If you are interested in more detailed information regarding this column, please refer to the official blog below. [IT Litigation] Frequently Occurring Software.. : Naver Blog Thank you. Law firm Veat
[Law firm Veat V.A.R] Global AI Regulatory Sandbox Trends and Implications
In the era of AI, the private sector is tireless in its efforts to enhance AI capabilities and strengthen competitiveness. The government also aims to be an “AI Top 3 Nation” and is committed to developing various visions and policies and securing resources to support them. However, when we look at the reality of our country, we are blocked by “regulatory barriers” from the stage of securing “learning data” needed for AI learning, and even if we develop innovative products and services based on excellent AI capabilities, we must overcome regulatory barriers such as “licenses and permits” again to release them to the market. Korea has been operating a so-called “Korean Regulatory Sandbox” since 2019 to solve the problems of the positive regulatory system, but it has been pointed out that “the current Regulatory Sandbox system alone is limited in supporting AI industry promotion”. Meanwhile, one of the key policies of the “EU AI ACT”, which has greatly influenced Korea’s Artificial Intelligence Basic Law, is that it allows member states to operate AI Regulatory Sandboxes. Major countries and international organizations, including the EU, recognize the benefits of the Regulatory Sandbox and are showing a willingness to actively utilize it in the field of artificial intelligence. This report will examine the current status of “overseas AI Regulatory Sandboxes” and explore what types of special regulations are needed to activate the collection, utilization, and utilization of “learning data”, and whether Korea should introduce an “AI Regulatory Sandbox” or expand and reform the existing ICT Regulatory Sandbox. Law firm Veat, with its experience and know-how in Regulatory Sandbox consulting and advice since 2018 and its expertise in the artificial intelligence industry, will provide professional advice and consulting to companies regarding regulatory improvement and will actively participate in government and National Assembly improvement efforts. If you have any questions regarding AI-related Regulatory Sandbox consultation and application, please contact the “Regulatory Sandbox Consulting Team (Representative Attorney Song Do-young, doyoung.song@veat.kr, 02-576-8990)”. Thank you. Law firm Veat [VEAT Regulatory Sandbox Consulting Team] Regulatory Sandbox Consulting Team Introduction: The ‘VEAT Regulatory Sandbox Consulting Team’ has been conducting government projects and corporate consulting related to Regulatory Sandboxes since the project discovery stage in 2018, for a total of 7 years. VEAT has experience reviewing over 500 cases, the largest number in Korea, through Regulatory Sandboxes for ICT, industrial convergence/financial innovation/smart cities/regional special zones/mobility. Representative Attorney Song Do-young has been awarded the ‘Prime Minister’s Commendation’ for his contribution to the activation of the Regulatory Sandbox system, serves as a member of the Financial Innovation Review Committee, and Law firm Veat has received an institutional commendation from the Ministry of Science and ICT. Members: Representative Attorney Song Do-young, Partner Attorney Baek Seung-cheol, Partner Attorney Jo Eun-byeol, Senior Attorney Jeon Yong-hwan, Senior Attorney Park So-hee, Attorney Song Ji-young, Attorney Kim Ji-soo, Attorney Lee Hye-rim, Attorney Han Hyung-joo, Attorney Lee Han-song, Researcher
E-commerce platform refund responsibility, beyond a simple connector, a legal obligation.
With the rapid growth of e-commerce platforms, issues of delayed refunds and non-refunds after cancellation of contract have emerged as consumer protection concerns. Recently, the Fair Trade Commission has issued corrective orders against A and B e-commerce platforms for violating the Electronic Commerce Act, clearly stating that platforms may not merely be simple intermediaries but can bear legal responsibility as payment management entities. In particular, e-commerce platform A operates a structure where it directly receives payments from consumers and settles them with tenant businesses, and has even filed for bankruptcy proceedings following large-scale refund delays. Consequently, the possibility of consumers recovering their refund amounts has become uncertain, and the Fair Trade Commission has ordered additional measures such as transparent disclosure of refund details. This case demonstrates that when a communication sales intermediary exceeds certain roles, responsibilities equivalent to those of a communication sales operator under laws may arise. Accordingly, e-commerce platforms need to re-examine the appropriateness of cancellation and refund processing systems and strengthen consumer protection systems. Law firm Veat is assisting with e-commerce platform operation service structure analysis, refund process design, terms and conditions revision, Fair Trade Commission and related organization response, and the entire spectrum of e-commerce practical matters. If you require related advice, please feel free to contact Law firm Veat. You can confirm the specific content of this column at [Law firm Veat blog] . Thank you. Law firm Veat dream
Startup-tailored legal service ‘Legal Tune’ officially launches – Platum introduction
Law firm Veat recently announced through the startup-focused media outlet 'Platum' the launch of a new legal service 'Legal Tune' for small and medium-sized enterprises and startups. Legal Tune provides customized legal support to help small and medium-sized enterprises and startups effectively and quickly resolve legal issues they often face in the early stages of business. Specifically, it provides comprehensive legal consulting including the drafting and legal compliance review of key legal forms essential for business operations, such as terms of service, privacy policies, and lease agreements. Law firm Veat, based on its extensive legal advisory experience accumulated in various platforms and IT fields, thoroughly analyzes each company’s unique business model and service characteristics to present optimal legal solutions that meet customer needs. The Legal Tune service is directly handled by experienced lawyers recognized in the data protection and IT law fields, providing high-quality legal advice based on expertise and practical experience. In particular, Law firm Veat has been selected as the leading boutique law firm for two consecutive years in the TMT league table announced by Legal Times, and Song Do-young, representative lawyer, has also been recognized for his expertise in the LEADING LAWYERS 2024 TMT section, establishing himself as a leading law firm in the technology, media, and telecommunications (TMT) field. Jo Eun-byeol, partner lawyer in charge of the Legal Tune service, has been serving as a legal advisor to the Personal Information Protection Committee, providing legal interpretation and policy advice on personal information-related matters, and Baek Seung-cheol, partner lawyer, holds certifications as an ISMS-P and PIPL certification auditor and is actively conducting personal information protection education for public and educational institutions. Jo Eun-byeol, partner lawyer, said, “Many companies are unaware of legal risks and experience unnecessary legal disputes,” and “Legal Tune aims to increase the legal stability of companies by thoroughly analyzing their business models and service characteristics and providing customized legal services.” Law firm Veat plans to continue striving to help small and medium-sized enterprises and startups effectively respond to legal issues. [Legal Tune Service] Thank you.
LATEST WORK
READ MORE +Legal Review of the possibility of lawsuits by overseas entities against domestic companies for copyright infringement. Law firm Veat
Law firm Veat conducted a legal review for an IT company ("client") regarding the possibility and targets of civil and criminal lawsuits related to copyright infringement that a foreign subsidiary could bring, including whether domestic entities and employees are included. The Copyright Act treats the works of foreigners differently from the works of Korean nationals, and stipulates that protection is only granted on the premise of fulfilling certain requirements. Law firm Veat provided specific legal advice to the client based on the Copyright Act, laws related to the legal capacity of foreign subsidiaries, and similar cases. Law firm Veat operates an “TIP(Technology·Intellectual Property) team” with outstanding expertise in copyright, IT technology, and intellectual property, and has been providing legal support to the client. Those interested in more detailed information regarding this case study can check the blog below. - [Copyright] Will the works of a foreign subsidiary be protected under the Copyright Act? Thank you. Law firm Veat
Legal consultation regarding the collection of usage records of third-party services by metaverse platform companies.
Law firm Veat received a request from a client operating a metaverse platform and reviewed the matter regarding the method of data usage when providing community services to the client by utilizing a third party's service.
Potassium sulfate fertilizer sales related licenses, permits and lease agreement review.
A customer operating a recycling specialized company wishes to manufacture and sell fertilizer from “potassium sulfate” generated as a by-product during the recycling process, and requested legal consultation from Law firm Veat regarding the necessary licensing procedures and legal requirements related to industrial complex occupancy contracts. Law firm Veat reviewed whether potassium sulfate falls under any type of fertilizer according to the “Fertilizer Management Act,” and provided guidance on the necessary fertilizer manufacturing registration requirements and procedures according to relevant notifications and process standards. In addition, it examined whether the fertilizer manufacturing industry is included in the permitted industries of the general industrial complex where the customer's factory is located, and the contract amendment procedures necessary for business expansion, focusing on legal and practical considerations. Furthermore, we explained practical points to note, such as the possibility of requiring prior consultation with related organizations or submission of additional documents depending on the detailed industry characteristics in some industrial complexes, and the necessity of organizing product usage, composition, and manufacturing methods in advance. This consultation is an example of a comprehensive review of potential licensing and contractual issues that may arise in the process of promoting a new business utilizing potassium sulfate, a special material, and is specialized legal advice for the environment and recycling industries. Law firm Veat has provided legal advice for various renewable energy and recycling projects based on a deep understanding of the environmental and resource circulation industries. In particular, it provides specialized legal services in the ESG and environmental fields, centered around national attorney partner, Kum-soo. Those who are curious about more detailed information regarding this case study can check the official blog. Thank you. Law firm Veat
AI medical solution company's NDA (Non-Disclosure Agreement) Korean/English drafting examples
Law firm Veat received a request from a client developing and operating brain and AI-based medical solutions, and performed drafting of Korean and English Non-Disclosure Agreements (NDAs). The client provides solutions that improve the quality of medical services through AI technology utilizing patient data, and is conducting collaborations with various external organizations, including technology reviews, joint projects, and investment negotiations. Consequently, the need for standard NDAs that can be readily used in practice while safely protecting technology and business information arose. Law firm Veat, in response to the client’s request, designed two versions of the NDA that can be advantageously utilized from the perspective of both the information provider and the recipient. The version for the information provider is structured to maximize the scope of confidential information protection, restrict the purpose of use, and specify strong remedies for violation, including return/destruction of information after contract termination. Conversely, the version for the information recipient clearly limits the scope of confidential information, adjusts for flexible use within the purpose, and rationally designs the scope of liability. Furthermore, considering the client’s global collaboration environment, an English contract was also provided along with it, completing a practical contract tailored to actual usage environments, not merely a translated version. Law firm Veat supports clients in minimizing unnecessary legal risks during collaboration through tailored contract design that reflects the business structure and information protection strategy of technology-based companies. Those who are interested in more detailed information regarding this case study, please refer to the official blog below. Law firm Veat : Naver Blog Thank you. From Law firm Veat