Welcome

January 11th, 2009
Don Southerton, Editor and Chief Blogger

Don Southerton, Editor and Chief Blogger

ENTER

Our Goals

This resource shares recent developments in U.S.-Korean legal and business affairs, as well as topics such as family court, litigation, labor, and intellectual property issues.

We support the Blogger’s Code of Ethics as posted in www.cyberjournalist.net. We will abide by three main principles, “be honest and fair, minimize harm and be accountable.”

We strictly prohibit any postings that contain incorrect or misleading information.

Our Experts and Chief Blogger

Overseeing our team of experts and contributors is Bridging Culture Worldwide (BCW) CEO and President Don Southerton. Look for posting by top legal experts on Korea and international law related to Korean business.

Contribute your thoughts to this Blog…

Please note we promote open communications. In order to protect against spam and abusive remarks, all comments will be reviewed before being posted. That said, we look forward to your thoughts, contributions, and participation.

Enter

  • Share/Bookmark

Tags: , , , , , , , , , , , , ,
Posted in Announcement | No Comments »

Hyundai Motor Chairman Fined for Damages

February 8th, 2010

By Don Southerton, Korea Legal.org Editor

Korea’s industrial groups and their family management are under constant public scrutiny. For decades they have attracted both praise and attack. Hyundai and Samsung tend to get most of the attention ( note my previous few posts). This surfaced today. In defense of  the actions of Chairman Chung Mong Koo, considerable restructuring efforts were required across Korea following the 1997 IMF Crisis. Much of this was for survival.

Korea media notes:

Chung Mong-koo, chairman of Hyundai-Kia Automotive Group, and Kim Dong-jin, vice chairman of Hyundai Mobis, the carmaker’s parts manufacturer, were ordered to pay 70 billion won ($60 million) in damages and penalties to the automaker for “managerial misconduct.”


The ruling follows Chung’s conviction for breach of trust in June 2008 when he was given a three-year suspended jail term. The 71-year-old tycoon was later pardoned by President Lee Myung-bak.

The Seoul Central District Court ruled in favor of the Solidarity for Economic Reform (SER) and 14 minority shareholders, Monday, who filed a lawsuit against Chung and Kim for losses they inflicted on the company when they diverted funds from affiliates to beef up the eroded capital base of the now-defunct Hyundai Space and Aircraft after the 1997 currency crisis.

The amount is the biggest ever to have been awarded by a court in a damages suit initiated by minority shareholders against the CEO of a conglomerate.

“The court rejects claims by Chung and Kim that it was an inevitable managerial decision that overall inflicted no losses on the company,” presiding senior Judge Shin Hyun-chul said. “The court also does not accept their claim that the lawsuit was filed after a statute of limitations had expired.”

Shin concluded that Chung had ordered a capital increase for Hyundai Aerospace in order to defend his managerial control and tried to have his company cover his personal debt guarantees ― all actions that supported the plaintiffs’ argument.

A Hyundai representative said that Chung has not yet decided whether to appeal or pay the damages as ordered.

“Our legal team is checking the pros and cons before making a final decision,” he said, complaining that the amount was “too much.”

The plaintiffs lodged the lawsuit after Hyundai Motor rejected their request to its board of directors to take action against the chairman. SER cited the conviction of Chung for embezzling 70 billion won in corporate funds on top of a 45 billion won fine levied by the Fair Trade Commission for illegally subsidizing Hyundai Aerospace through affiliate Glovis, now Mobis. [ not sure this is correct, I believe it was Hyundai Precision, not Glovis--which was created in 2001.]

Under current regulation, this request must precede any legal action by minority shareholders to seek damages for losses a company sustains.

  • Share/Bookmark

Tags: , , , , , , , ,
Posted in News | No Comments »

US International Trade Commission To Investigate Samsung

February 6th, 2010

By Don Southerton, Korea Legal Editor

IP issues interest me. For one, as Korea moves from a heavy industy, labor intensive export production model to more gray matter sectors like bio tech, Green and renewable, and high tech I see more and more IP issues surfacing. On another level, vicious competition within the high tech sectors coupled with internal corporate pressure to perform add to the situation.

Seems like Samsung at the center of many controversies. It’s shear and scale had lots to do with this…

DOW JONES NEWSWIRES Feb. 4, 2010

The U.S. International Trade Commission said it has voted to embark on an investigation into allegations that Samsung Electronics Co. (005930.SE) has violated Sharp Corp.’s (6753.TO) patents used to make components in flat-screen televisions.

The latest complaint comes after the Korean electronics giant in December filed a complaint with the U.S. commission against Sharp alleging that the Japanese firm infringed on Samsung’s patents for liquid crystal display devices. It joins a growing list of disputes about patent breaches in the highly competitive electronics industry as companies strive to protect their intellectual property and cutting-edge technologies.

Patent-related legal disputes happen often in the flat-panel display industry, although in most cases they end up in cross-licensing deals.

Officials at both Samsung and Sharp said they had no immediate comment on the issue.

In a statement on its Web site, the ITC said the products involved the probe are LCD modules for products used in televisions.

The ITC is beginning the investigation after Sharp filed a complaint against Samsung on Jan. 8. In the complaint, Sharp asked that the ITC issue a cease-and-desist order on the export and sale of such products.

“By instituting this investigation, the U.S. ITC has not yet made any decision on the merits of the case,” the commission said in the statement.

The ITC’s chief administrative law judge will assign the case to one of the ITC’s six administrative law judges, who will schedule and hold a hearing.

The administrative law judge will then make an initial determination as to whether there is a violation, it said.

Samsung in November lost a patent infringement case raised by Sharp in 2008 that involved LCDs. In that case, the U.S. ITC ruled that Samsung infringed on four of Sharp’s patents for technology to improve the picture quality of LCDs and said the South Korean company should stop selling devices in the U.S. that trespassed on the patents.

Link http://online.wsj.com/article/BT-CO-20100204-722715.html?mod=WSJ_World_MIDDLEHeadlinesAsia

  • Share/Bookmark

Tags: , , , , , ,
Posted in News | No Comments »

Korean Justice and Samsung Leadership Saga

January 30th, 2010

This Economist issue looks at the Samsung’s leadership saga. For decades there has been a love-hate relationship between the government and the family leadership of Korea’s top business groups. Many have been investigated, charged, convicted, and then pardoned–several times.

All in the family Lee Kun-hee may return
Jan 28th 2010 | SEOUL | The Economist

JUSTICE in South Korea can be elastic. Industrialists who break the law have had their sentences commuted or been pardoned on the basis of their contributions to the national economy, sweeping them back to their corner offices. Lee Kun-hee, the patriarch of Samsung, appears to be on the same trajectory.

In early January Mr Lee appeared at a big American electronics show, a rare act for a notoriously private person. Upon his return to South Korea Mr Lee said he was “thinking about” returning to a formal role at Samsung, whose sales account for about a fifth of the country’s gross domestic product and which the Lee family controls through a convoluted web of shareholdings.

Mr Lee, who is 68, had resigned as Samsung’s chairman in April 2008 after being charged with breach of trust, tax evasion and securities violations. Convicted of the first two, he was ordered to pay 46 billion won ($40m) in taxes and 110 billion won in fines. A three-year prison sentence was suspended.

On December 31st South Korea’s president, Lee Myung-bak, pardoned Mr Lee, wiping his record clean. The president said the country needed his help to win its bid to host the 2018 Winter Olympics. Shareholder activist groups squawked over the pardon and were duly ignored.

Mr Lee’s possible re-ascension to the chairmanship throws a spotlight on Samsung’s corporate governance. Yet the leadership saga seems not to have hurt its performance. Last October Samsung Electronics posted record quarterly operating profits of 4.2 trillion won—better than any of Japan’s big electronics makers. It expects to report record sales for 2009 of 136 trillion won when it releases its earnings on January 29th. It is now the world’s largest maker of computer memory-chips and the second-biggest mobile-phone company after Nokia.

Last year a South Korean court declared that a sale of Samsung securities by Mr Lee to his children at below market prices was legal, clearing the way for the next generation to take control. In December his only son, Lee Jae-yong, was named chief operating officer of Samsung Electronics. He is regarded as the heir apparent. On February 12th Samsung will celebrate the birthday of its founder, Lee Byoung-chull. The family, after all, must be honoured.

  • Share/Bookmark

Tags: , , , ,
Posted in News | 1 Comment »

Korea, Gender, and Changing Society

January 26th, 2010

There has been quite a transformation in Korean gender related issues. Once a male dominated society, women fared poorly. For example, in family court, custody was granted to the father, especially in the case of sons. (The law was changed  and men no longer have automatic custody).

One sign of obvious change is more women in the Korea workplace. They add much and are excellent team members. Much has changed over the past few years. Still, from my perspective this Korea Times article overstates at least with regard to the major business groups the role of women. Since the major Groups are hierarchical with seniority based promotions, it will take more time for women to be in key positions within the major companies.

Korea Times notes:

The remnants of patriarchy are fast disappearing as women assume increasingly bigger roles, the phenomenon that some experts dub as the advent of a neo-matriarchal society. Examples of the strengthening of female power are everywhere including national exams, economic activities and political participation although in some areas males still remain dominant.

Historically, males have ruled in the national exams to become high-ranking officials, diplomats, prosecutors or judges in Korea due in no small part to masculine-oriented Confucianism. But things have been changing rapidly. Among the three most popular exams, successful female applicants account for about a half of the total in the administrative, diplomatic and law tests.

The female proportion is also rising in conservative financial businesses where there are no female CEOs at major banks, insurance companies, asset management firms, futures companies and government agencies. “An increasing number of the highly desirable financial jobs such as ones at the Bank of Korea or the Financial Supervisory Service are being taken by females,” said an official at the central bank. “Currently, the gender disparity is severe at senior levels. As a rising number of females fill junior level vacancies, however, the disparity is likely to weaken in the not-so-distant future. In other words, the voices of women will get louder,” he said.

The demise of patriarchy is felt not merely in the workplace but also at home where housewives make more and more important decisions, according to a survey by Statistics Korea. The state-run agency found early last year that 90.4 percent of housewives take charge of most day-to-day decisions. On topics such as moving house that were conventionally decided by men alone, 85.1 percent of women took part while a mere 14.2 percent of homes were found to stick to the traditional fashion of depending solely on the male.

Robot Business

Businesses are quickly taking note of the paradigm shift from the male-oriented society to the female-centric one. Korean robot makers said one of the biggest trends was the advent of female opportunities. “It is obvious that an increasing number of women will partake in economic activities, while they also give birth to a decreasing number of babies,” said Choi Seong-gu, an economist at the Hyundai Research Institute, who came up with a roadmap for the robotics industry this month. “The industry is ready to embrace this change. For example, the necessity of robots will rise due to the low birthrates, particularly in the household chores sector as women will be busy dealing with social activities in years to come,” he said.

  • Share/Bookmark

Tags: , , , , ,
Posted in News | 1 Comment »

Revamping Korea’s Law Education Model

January 24th, 2010

By Don Southerton, Korea Legal Editor

Over the past few years Korea has moved towards adopting an American Law School model. In part this is due to many Korean business firms (to compete in the global market) requiring their legal counsel to have been schooled abroad. In addition, the old model was structured to either prepare people for the Courts or to serve as an activist lawyer— with few practicing business and civil law. Times change. Like in the West, Korean society has become more litigious. That said, I was a little surprised Kyung Hee reached out to University of Wyoming instead of a higher profile institution.

Memorandum Fosters Opportunities Between UW Law School, Korean University

Jan. 22, 2010 — To promote academic, legal, and cultural exchanges involving students and faculty at both institutions, the University of Wyoming College of Law has entered into a memorandum of understanding (MOU) with representatives of Korea’s Kyung Hee University Law School.

As Korea revamps its approach to meet stronger legal legal education requirements, Kyung Hee University will look to the University of Wyoming and other law schools as models for its new system, says Matt Wilson, UW associate professor of law who has traveled to Seoul, Korea, to work with Kyung Hee faculty and administrators during this restructuring process.

“In entering into a cooperative relationship with Kyung Hee University Law School, the University of Wyoming College of Law stands in a prime position to contribute to the ongoing legal reforms in Korea using its experience and expertise in offering quality and interactive legal education,” Wilson says. “Through a variety of collaborative efforts we hope to open new international doors for UW College of Law students and faculty and to play an integral part in the success of Kyung Hee University Law School.”

Kyung Hee celebrated its 60th anniversary in 2009. It is concentrating its efforts on strengthening its core offerings in the fields of education, internationalization and research.

Stephen Easton, dean of the College of Law, says, “Professor Wilson’s involvement in Kyung Hee’s reorganization will provide our law students and faculty with tremendous learning and sharing opportunities. The school looks forward to this continued collaboration.”

While in Wyoming to sign the MOU, Kyung Hee representatives will meet with UW College of Law faculty, tour the campus, and travel to Cheyenne to meet with Supreme Court justices and tour the State Capi

  • Share/Bookmark

Tags: , , , , , ,
Posted in News | 1 Comment »

Kodak, Samsung, LG and Patent Infringements

January 18th, 2010

By Don Southerton, Korea Legal Editor

One common concern with doing global business is trade and patent infringement, which are complex and costly–to both defend and protect. This recent case involving Kodak, Samsung, and LG provides some insights into Korean business. First Kodak is vigilant in protecting its IP. Next, Samsung and LG eventually saw that settling the case was in their best interest and would open doors for cross-licensing technology. That said, LG settled first, while Samsung waited until the U.S International Trade Commission ruled against them.

In comparing Samsung and LG, I see shrewder brinkmanship on the part of Samsung. This is no surprise and points out the need to understand Korean business and their unique corporate cultures. (Samsung, LG, Hyundai-Kia, Lotte, Hyosung, Hanjin, SK, Doosan, etc–all differ).

A Brief Overview
Kodak Takes Action Against Samsung and LG For Patent Infringement
Kodak Asserts that Samsung and LG Camera Phones Infringe its Digital Camera Patents

ROCHESTER, N.Y., Nov. 17 2008 — Eastman Kodak Company (NYSE:EK) announced today that it has filed complaints against Samsung Electronics, LG Electronics and other related entities for infringement of Kodak patents.

The Kodak actions specifically allege that Samsung and LG camera phones infringe Kodak digital camera patents. The patents in question cover technology related to image capture, compression and data storage and a method for previewing motion images.

Kodak filed against Samsung and LG in the United States District Court for the Western District of New York, as well as in the U.S. International Trade Commission. Kodak’s District Court complaints request compensation for damages resulting from the companies’ infringement, and both the District Court and ITC actions seek injunctions prohibiting Samsung and LG from further importation and sale of products cited in the complaints. Kodak did not disclose the amount of damages it is pursuing.

Full Circle
In February 2009 both Samsung and LG flied suits at the U.S. International Trade Commission over some alleged patent infringement by Kodak.


LG Settlement
ROCHESTER, N.Y., Dec. 4, 2009 — Eastman Kodak Company (NYSE: EK) announced today that it has entered into a technology cross-license agreement with LG Electronics, Inc., which will allow each company broad access to the other’s patent portfolio.

ITC Ruling
December 18, 2009 – An administrative law judge at the U.S. International Trade Commission ruled that Samsung has infringed two camera patents developed by Kodak.

Samsung Settlement
ROCHESTER, N.Y, January 11, 2010. —Eastman Kodak Company (NYSE: EK) announced today that it has entered into a technology cross license with Samsung Electronics Co Ltd. that will allow each company access to the other’s patent portfolio.

The license agreement, which provides significant benefits to both companies, is royalty bearing to Kodak. The company received a payment from Samsung in December that has been credited toward its royalty obligation. Additional financial details were not disclosed.

In December, Samsung and Kodak agreed to negotiate a settlement over digital camera patents issues, which could include a cross-licensing deal, Kodak said Wednesday.

The companies also entered into an agreement to file joint requests for the termination of patent infringement proceedings before the U.S. International Trade Commission, and to settle their patent infringement lawsuits against each other, which are pending in U.S. District Court for the Western District of New York and in the German courts. Both the settlement of the litigation and the license agreement become effective upon approval by the International Trade Commission of the joint requests for termination. The ITC is expected to make its determination by the end of January 2010.

  • Share/Bookmark

Tags: , , , , , , , , , ,
Posted in News | No Comments »

New Korean Lawyers Victims of Economy

January 15th, 2010

By Don Southerton, Korea Legal Editor

This surprised me, but on second thought it reflects the economy. Korea corporations over the past decade have greatly expanded their legal departments, but with the recession major Korean firms see  R&D, Sales, and Marketing as driving growth–other department like Legal and General Affairs faring poorly.

Korea Times notes:

45% of Trainee Lawyers Unemployed
Nearly five out of 10 new lawyers remain unemployed, the Judicial Research and Training Institute (JRTI) said Wednesday, proving that Korea’s legal service market is indeed frozen.

Being awarded a lawyer’s license in Korea was once believed to be a surefire way to be rich and ascend societal ranks, but the belief has been shattered in recent years by the saturated domestic legal services market.

A total of 978 trainees will graduate from the institute late this month, it said, and 44.4 percent of them, or 351, have not been hired by any company here. The other 627 trainees are set to become judges, or prosecutors or lawyers belonging to law firms or companies, it said.

The ratio is higher than the two previous years of 44.1 percent in 2008 and 35.9 percent in 2007, according to the state organization that provides training for the bar exam.

“Major law firms here have significantly cut their recruiting volume this year amid the gloomy outlook,” a JRTI spokesman said. “Previously, most of those who left the institute unemployed earned a full-time job at a law firm or a private or public company within six months of graduation. Unfortunately, it’s unlikely this year.”

A senior judge expected that those ranked below the top 400 in scores would find it hard to secure a high-paying job.
  • Share/Bookmark

Tags: , , , ,
Posted in News | 1 Comment »

Korea Courts Rule Against Private Information Theft Class Action Suit

January 14th, 2010

By Don Southerton, Korea Legal Editor
With the new year, I’ll be posting recent legal developments in Korea. This ruling stood out since it involves Auction, which is owned by eBay. The case centered around hacking of personal information–an ongoing concern in Korea, in the US,  and globally.

What are your thoughts?

Korea Times notes:

Auction Exonerated From Compensation in Collective Lawsuit
By Park Si-soo
Staff Reporter

A Seoul court ruled Thursday that Auction, a Korean open market Web site owned by eBay, was not liable for any damages sought in a class action lawsuit brought by 146,000 registered users over the theft of their private information by hackers in 2008.

The Seoul Central District Court ruled in favor of the company, citing its efforts to put the best security measures available in place as extenuating circumstances.

However, the court made a non-binding suggestion that Auction compensate the affected customers voluntarily at a level that fits its responsibility as a good corporate citizen.

Auction said that it appreciated the ruling and was considering a variety of ways to give back to society.

The latest case marks a departure from previous rulings on massive leaks of private information.

Kookmin Bank and LG Electronics were ordered to pay compensation to customers whose information was exposed following hackers’ attacks on their databases.

Presiding Judge Lim Sung-geun said Auction defended its database with state-of-the-art security measures, providing the company with extenuating circumstances against the plaintiff’s claim that it had failed to uphold its duty of protecting user data from hackers.

“A company should be held liable for compensating affected users only when it is proven that it did not make the utmost efforts to prevent hacking,” the judge said.

Seo Min-seog, an Auction spokesman, said, “We respect the ruling. And we will do our best to provide the best services with the best security measures.”

Park Jin-shik, one of the lawyers representing the plaintiffs, expressed regret at the court ruling and said he will appeal.

“An unexpected ruling was made,” Park said. “The leak was apparently caused by Auction’s inadequate security system. Before the leak was reported, the company found a hacking tool implanted in its server, but it did not do its utmost to get rid of it.”

The company’s user data server suffered three hacking attacks between Jan. 4 and 8, 2008. The company and the authorities estimate that nearly 10.81 million or 60 percent of all registered users of Auction (www.auction.co.kr) had their private information including ID numbers, home addresses, phone numbers and even bank accounts exposed. Police failed to identify and catch those who penetrated the company’s firewall.

In the collective action against the company, each of the 146,000 plaintiffs demanded between one and three million won ($880-$2,650) in compensation.

During the two-year-long court battle, they tried to prove that they had sustained damage as a result of the leak, citing, for instance, increases in the numbers of what appeared to be phishing calls to their mobile phones.
  • Share/Bookmark

Tags: , , , , , , , ,
Posted in News | No Comments »

Korea Legal 2010

January 9th, 2010

By Don Southerton, Korea Legal Editor

It’s a new year. In 2010, we’ll be asking top experts to contibute to this Blog. Look for timely posting on a number of Korea-related legal and business issues.

I’ve also renamed the site to reflect it’s evolving scope.

Interested in contributing?

Please contact me at dsoutherton@bridgingculture.com

  • Share/Bookmark

Tags: , , , , , , ,
Posted in Announcement | No Comments »

2010 Korea Looking Forward Vodcast

January 7th, 2010

Welcome to this Vodcast edition of Everything Korean sponsored by Korea Expert Witness, Bridging Culture Worldwide, and Korea Business Central. This is your host Don Southerton

Questions? Please call 1-310-866-3777 or email

  • Share/Bookmark

Tags: , , , , ,
Posted in Commentary | No Comments »

« Older Entries