Korean License Agreements: 8 Musts for Succesful Licensing of Technology to a Korean Company

License Agreements in Korea are too often, simply, a spinning of license agreements used in the West. Foreign license agreements, in most cases, are not adequate for your licensing needs in Korea. The reality is Korean Law, in most cases, shall be the governing law notwithstanding the choice of law clause in your Korean license agreement if the license is utilized in Korea.

South Korea has no specific statute solely governing license agreements and the general principles of contract law are the main legal principles governing the formation and enforcement of Korean license agreements.  However, a myriad of other laws and regulations including Korean Competition Law, Korean Contract Law, and Korean Commercial Law govern the relationship between the licensee and the licensor. 

A major need to understand is the evolving laws, regulations, and enforcement actions by the Korean Fair Trade Commission related to competition/anti-trust law. A nuanced and proactive approach is necessary to help ensure you do not obtain the scornful eye of the Korean FTC or are unable to enforce your license agreement in Korea.

Tips for Success in Drafting & Enforcing
Korean License Agreements

8 Musts Before Entering into a Korean License Agreement

1.  Due Diligence
Say it three times and read my posts:  Doing Business in Korea:  Due Diligence, Agreements, Attorneys and Street Smarts

2.  Listen to my Mother
Read her Advice at: Listen to My Mother: JVs in Korea.  While the post is about JVs, the advice still holds true.

3. Protect your IP in Korea
Register your intellectual property in Korea.  Please read my short post entitled:  Don’t Just Trust Us: Trademarks in Korea.

4.  Choice of Law
It is often best to simply utilize Korea as the choice of law. In many cases, Korean Law shall, notwithstanding the choice of law clause in the agreement, be applied by a Korean Court. Thus, knowing these expectations, understanding Korean law, and having pragmatic solutions to unique aspects of Korean Law shall lead to less risk of litigation and more certainty. 

5.  Choice of Jurisdiction
Again, to save on costs, often, the best choice is to simply utilize the Seoul Central District Court as the jurisdiction for the resolution of the dispute or consider the benefits and detriments of arbitration. 

6.  Arbitration
We, always, recommend arbitration in all cases where the costs justify arbitration. Often, arbitration will lead to greater legal fees than having a dispute resolved at a Korean court. However, arbitration, as explained in numerous posts on this and other blogs is beneficial to both parties in most cases.

7.  Language 
Have the governing language of the Korean License Agreement be English, but draft the license agreement in English and Korean. Make sure that you don’t have an argument in the future that the Korean licensee didn’t understand the particulars of the agreement.

8. Confidentiality & Non-Compete Clauses
Draft a tight and enforceable Confidentiality Clause and if beneficial a Non-Compete CIause. These clauses must be drafted by someone with significant experience in drafting licensing and like agreements in Korea in order for these clauses to be enforceable in Korea. 

Doing business with Korean companies and entrepreneurs can be a profitable and enjoyable experience. A major necessity is often due diligence, common understandings, and great agreements. 

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services.

To schedule a call with Sean Hayes, please Schedule a Call Here.